By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
Panelists agree that SpaceX's inclusion in the Nasdaq-100 is more of a narrative kicker than a fundamentals upgrade, with muted short-term upside and the real test being SpaceX's ability to execute on AI infrastructure and reach profitability. They also acknowledge the massive cash burn and the risk of execution slips on orbital data centers targeted for 2028.
Risk: Massive cash burn and the risk of execution slips on orbital data centers
Opportunity: Potential capture of the massive, inelastic defense and intelligence budget that requires off-grid, orbital processing
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
On July 7, Space Exploration Technologies (NASDAQ: SPCX) was added to the Nasdaq-100, which comprises 100 of the largest nonfinancial companies listed on the Nasdaq.
Initially, some expected its inclusion in the index to be a short-term catalyst that would send the stock higher; exchange-traded funds (ETFs) that track the Nasdaq-100 needed to buy it. For example, SpaceX now makes up 1.1% of the portfolio weight of the Invesco QQQ Trust, which was the second-most traded ETF by trading volume as of March 31. However, that has not been the case. From July 7 to July 17, shares of SpaceX dropped 17%.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Historic patterns suggest that an early decline after inclusion in the index was likely. But those patterns suggest something different about where SpaceX could be headed over the next several months.
Over the past two years, of the 21 stocks that were added to the Nasdaq-100, only six climbed in their first week in the index, according to Dow Jones Market Data data shared by Bloomberg. The average decline for stocks after that first week was 3.8%, but SpaceX fared worse than that with an 8.9% drop from July 7 to July 14.
Given a little more time, however, the stats start looking positive. One month after inclusion, the average stock had a 3.6% gain, and after three months, the average stock had a 6.3% gain.
That said, what happened to other recent additions to the Nasdaq-100 won't necessarily happen to SpaceX. Moreover, those average increases of 3.6% and 6.3%, respectively, are relatively minuscule. What SpaceX wants to accomplish, and any meaningful returns it could generate for shareholders, will happen further down the road.
SpaceX is known for its rocket launches and satellite deployments, but it has projected that $26.5 trillion of the $28.5 trillion total addressable market it could pursue is in artificial intelligence (AI).
Part of that opportunity lies in building out AI cloud computing infrastructure, which SpaceX is doing on the ground and eventually plans to do in orbit. SpaceX signed deals to rent out some of its compute capacity to Alphabet and start-up Anthropic, a pair of deals that could generate roughly $26 billion in combined annual revenue.
It also has a computing capacity deal with Reflection AI, a builder of open AI models, worth $150 million per month or $6.3 billion in total if the deal runs through 2029. Additionally, according to a July 17 report from The Wall Street Journal, SpaceX is in talks with the Department of Defense for computing capacity in a deal that could be worth several billion dollars.
That all could start adding up to meaningful revenue for SpaceX, which only generated $18.6 billion in sales in 2025. But those revenue sources above don't include SpaceX's potential to generate more sales and build out the future of AI infrastructure through satellite-based data centers; Musk says his company could deploy AI satellites as soon as 2028.
Some analysts are very bullish on SpaceX, with John Godyn of Citigroup placing a long-term price target (no specific time frame) of $900 per share on it. From the July 17 closing price of just under $124, that would be a gain of more than 625%.
The infrastructure needed to be a leader in AI has cost SpaceX billions of dollars each year and will continue to do so. In terms of its 2025 capital expenditures, AI was easily the company's most costly segment.
| Space Capital Expenditures | Connectivity Capital Expenditures | AI Capital Expenditures | |---|---|---| | $3.8 billion | $4.1 billion | $12.7 billion |
Also, in just the first three months of 2026, SpaceX's total capital expenditures already reached $10.1 billion. Its losses are also climbing; SpaceX reported a $4.9 billion net loss for all of 2025 but has already racked up a $4.2 billion net loss after just the first quarter of 2026.
In addition to financial costs, SpaceX also faces a high bar to boosting its stock price, as it's already one of the world's most valuable companies by market cap. The expectations for the company are sky-high, and those are baked into its premium stock price, so it doesn't have much wiggle room if its quarterly results underwhelm.
What's most important with SpaceX isn't how it will perform in the next few months. Rather, what's most important is how much of that $26.5 trillion total addressable market in AI it can capture, how it will handle the challenges of building space-based data centers, and how long it will take for the company to reach profitability.
Before you buy stock in Space Exploration Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $370,332! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,272,280!
Now, it’s worth noting Stock Advisor’s total average return is 904% — a market-crushing outperformance compared to 208% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
**Stock Advisor returns as of July 22, 2026. *
Citigroup is an advertising partner of Motley Fool Money. Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Historical post-addition returns offer little signal for SPCX given its unique AI-compute pivot, but massive capex, accelerating losses, and execution risks on unproven orbital infrastructure justify caution at current premium valuations."
The article's historical Nasdaq-100 addition data (only 6/21 stocks rose in week 1, avg +3.6% at 1mo, +6.3% at 3mo) correctly tempers short-term hype around SPCX's July 7 inclusion and its immediate 17% drop. However, it glosses over that index additions often suffer mechanical ETF rebalancing selling pressure. SPCX's pivot to AI compute (deals with GOOGL, Anthropic, Reflection AI potentially >$30B annualized) on top of its $18.6B 2025 revenue is a genuine differentiator versus past additions, yet its $12.7B AI capex in 2025, $4.2B Q1-2026 loss, and already sky-high valuation leave little margin for execution slips on orbital data centers targeted for 2028.
SpaceX's $26.5T AI TAM is wildly aspirational marketing; satellite-based data centers face insurmountable latency, power, and thermal challenges that could delay revenue past 2030 while losses balloon, making the 625% upside to Citigroup's $900 PT a classic over-optimistic analyst call that ignores how few 'platform' pivots from hardware companies have ever succeeded at this scale.
"SpaceX's transition from a launch provider to an AI compute utility is the only metric that matters for long-term valuation, rendering short-term index-inclusion volatility irrelevant."
The article conflates index inclusion mechanics with a fundamental thesis on SpaceX (SPCX). The 17% post-inclusion drop is a classic 'sell the news' event driven by institutional rebalancing, not a failure of the business. However, the article ignores the primary risk: the massive cash burn. With $4.2 billion in losses in Q1 2026 alone, SpaceX is essentially a venture-stage bet operating at a multi-billion dollar scale. While the $26.5 trillion TAM is pure marketing hyperbole, the pivot to AI infrastructure is the real story. If they can monetize compute capacity before the capital expenditure cycle crushes their balance sheet, the $900 price target isn't just optimism—it's a bet on them becoming the utility layer for the space economy.
The strongest case against this is that SpaceX is burning cash at a rate that necessitates massive equity dilution or debt, which would neutralize the upside for current shareholders regardless of revenue growth.
"SpaceX's valuation assumes profitable scale in unproven orbital AI infrastructure while the company is currently burning cash at an accelerating rate with no clear path to positive FCF."
The article conflates two separate narratives: (1) index inclusion mechanics, which show modest near-term upside (3.6% at 1mo, 6.3% at 3mo), and (2) SpaceX's long-term AI infrastructure TAM, which is speculative. The real problem: SpaceX burned $4.2B in Q1 2026 alone while generating only $18.6B annual revenue. At current valuations (~$124/share implies ~$600B+ market cap), the company is priced for flawless execution of unproven satellite data center economics by 2028. The $900 Citi target assumes SpaceX captures meaningful AI infrastructure share while reaching profitability—neither is guaranteed. Index inclusion is noise; the actual risk is whether capex intensity ($10.1B in 3 months) ever converts to positive free cash flow.
If SpaceX's AI satellite infrastructure launches on schedule and captures even 5-10% of incremental enterprise AI capex (which is growing 40%+ annually), the $26.5T TAM math works and current losses are just investment phase—making $124 a bargain for a 5-10 year hold.
"Near-term upside from Nasdaq-100 inclusion depends on a proven path to profitability in AI infrastructure, not just hype from AI addressable market assumptions."
SpaceX joining the Nasdaq-100 looks more like a narrative kicker than a fundamentals upgrade. The immediate price action has been negative, and the historical track record for new entrants shows muted short-term upside. The real test is whether AI-infrastructure revenue materializes from multi-year compute deals and DoD contracts, against ongoing massive capital expenditure and losses (2025 sales $18.6B, net loss $4.9B; $10.1B capex in 1Q26). Satellite-based data centers face regulatory, spectrum, launch, and financing risks. In short, Nasdaq-100 inclusion may help sentiment, but execution on AI infra and profitability timing will drive true upside, not the index badge.
Strongest counter: index inclusion can attract long-duration funds and, if SpaceX lands scalable DoD/AI contracts, could trigger a meaningful re-rating that outpaces the current bear case.
"Satellite data centers are structurally incompatible with AI compute economics due to latency, not merely delayed."
Claude's concession that 5-10% of incremental AI capex could validate the $26.5T TAM ignores orbital physics: round-trip latency exceeds 500ms even in LEO, rendering satellite data centers unusable for training or inference workloads that dominate hyperscaler spend. This isn't execution risk—it's a category error. Losses will compound through 2030 with zero path to the utility-layer role Gemini posits.
"SpaceX's valuation will be driven by government-subsidized, sovereign AI infrastructure rather than commercial hyperscaler competition."
Grok correctly identifies the physics barrier, but everyone is ignoring the geopolitical moat. SpaceX isn't just selling compute; they are selling sovereign, hardened, and censorship-resistant infrastructure. The $26.5T TAM isn't about competing with AWS for standard training workloads; it's about capturing the massive, inelastic defense and intelligence budget that requires off-grid, orbital processing. If the DoD subsidizes the infrastructure, the 'insurmountable' latency and power costs become irrelevant to the P&L, rendering the cash-burn thesis secondary to strategic necessity.
"DoD subsidy thesis only works if defense budget allocation to orbital compute remains stable through 2028—a binary political bet, not an execution bet."
Gemini's DoD subsidy angle is the first credible path to profitability I've heard, but it's also the most fragile. Defense budgets face congressional scrutiny; orbital infrastructure contracts require 5-7 year approval cycles. SpaceX betting $12.7B capex on a geopolitical moat assumes zero policy reversal or competitor entry (Blue Origin, Amazon Kuiper). If DoD pivots to terrestrial hardened clouds or reduces space allocation post-2026, the utility thesis collapses and cash burn accelerates. That's not physics—it's political risk nobody quantified.
"DoD subsidies alone can't guarantee profitability; policy risk and a decade-long capex cycle leave SpaceX valuation vulnerable to reversal."
Claude's DoD subsidy angle is the strongest counter to the burn-rate thesis, but it's also the most brittle: 5–7 year procurement cycles, congressional risk, and potential policy reversals could erode demand just as capex accelerates. Even if DoD contracts materialize, SpaceX still faces enormous unit economics, regulatory drag, and competitor risk from terrestrial/hardened clouds. The market seems baked for blissful scaling that policy risk could shatter.
Panelists agree that SpaceX's inclusion in the Nasdaq-100 is more of a narrative kicker than a fundamentals upgrade, with muted short-term upside and the real test being SpaceX's ability to execute on AI infrastructure and reach profitability. They also acknowledge the massive cash burn and the risk of execution slips on orbital data centers targeted for 2028.
Potential capture of the massive, inelastic defense and intelligence budget that requires off-grid, orbital processing
Massive cash burn and the risk of execution slips on orbital data centers