Key Points
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SpaceX joined the Nasdaq-100 on July 7, forcing index funds to buy a stock with a tiny public float.
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The company is valued at nearly $2 trillion despite posting a large annual loss.
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Starlink is scaling fast, but SpaceX is burning cash to fund its xAI and Starship ambitions.
- 10 stocks we like better than Space Exploration Technologies ›
Getting added to the Nasdaq-100 is usually a good day for a stock. Funds that track the benchmark have to own it. And for SpaceX (NASDAQ: SPCX), that meant billions of dollars of forced buying into a company whose public float is only a few percent of its shares.
On paper, that is a lot of demand chasing very little stock.
Yet a day after joining the index on July 7, SpaceX trades about 35% below its high of $225.64, changing hands for less than $147 as of this writing. That is below where the stock started when the company went public in June, in the largest U.S. initial public offering on record. It slipped about 6% in the session right after inclusion, giving back nearly all of its post-IPO gains.
So is the drawdown a chance to buy one of the most talked-about companies in the world at a discount? Or is the slide telling investors something?
A classic sell-the-news move
In short, this looks like a classic sell-the-news event. Sure, some buying was required because of the index inclusion. But that doesn’t prevent investors from selling. And, ultimately, Wall Street seems convinced that shares aren’t quite worth the premium they were commanding leading up to the event — and especially not worth the all-time high they hit shortly after the IPO.
This sell-the-news dynamic following an index inclusion has happened before. Palantir peaked right around its own Nasdaq-100 addition in late 2024, then fell about 25% over the following weeks.
In addition, joining an index can broaden a stock’s ownership over time, but it does nothing to change what the underlying business is worth.
And that, of course, is the harder question here.
At the time of this writing, SpaceX carries a market capitalization of about $1.9 trillion, making a shortlist of companies that have ever commanded a value this high. And SpaceX has reached this valuation while still losing money. In 2025, the company generated about $18.7 billion in revenue, up about 33%, so investors are paying around 100 times sales.
What the $1.9 trillion price demands
Sure, there’s a real business beneath the company’s $1.9 trillion market value.
Starlink, SpaceX’s satellite internet service, crossed 10 million active customers earlier this year and brought in more than $11 billion in revenue in 2025, about 61% of the company’s total. This is the part of the story I find most impressive: a large, fast-growing subscription business, and the main reason SpaceX can command a price in the trillions at all.
But growth alone isn’t the whole story.
SpaceX is deeply unprofitable, reporting a net loss of $4.9 billion in 2025 and $4.3 billion in the first quarter of 2026. A big piece of that traces to xAI, the artificial intelligence (AI) start-up SpaceX absorbed earlier this year. Its AI segment generated $3.2 billion in 2025 revenue but burns far more, and management has floated even bolder plans, including putting AI data centers in orbit. Add the cost of scaling Starship, and free cash flow is deeply negative.
So the price is asking a lot. It assumes Starlink keeps compounding, that Starship’s launch cadence ramps on schedule, and that the money flooding into xAI eventually earns a return rather than quietly consuming Starlink’s profits.
Any one of those slipping could leave the stock exposed. At about 100 times sales, there is little room for the ordinary stumbles that come with building rockets and AI models at once.
To be fair, this is a singular company. Its assets are hard to copy: a reusable rocket fleet, a satellite network already circling the planet, and a founder who has repeatedly pulled off what looked impossible. For investors who believe SpaceX will own space-based connectivity and compute for decades, a 33% pullback may look like an opening.
I’m not there yet. The drawdown makes the stock cheaper than it was a week ago, but cheaper and cheap are not the same thing. With the company still losing billions, I think its near-$2 trillion market capitalization leaves no cushion at all. I would rather watch SpaceX show that Starlink’s profits can outrun its spending before paying up — even after a sharp one-day drop.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
