SpaceX Stock Climbed 23% in Its First Week of Trading. Here's Where the Stock Price Will Be 1 Year From Now, According to History.

Space Exploration Technologies (NASDAQ: SPCX) offered investors a historic moment this month. The company, more often known as SpaceX, completed the world's biggest initial public offering and made it a key event for retail investors, earmarking about 20% of the shares for them -- individuals like you and me.

So, of course, all eyes were on this exciting operation. SpaceX priced its offering at $135, opened at $150, and went on to gain 23% in its first week of trading. This includes Friday, June 12, through Thursday, June 18. The stock market was closed on Friday, June 19, for the Juneteenth holiday.

Now, however, investors are wondering whether this positive short-term momentum will transform into longer-term gains. Here's where SpaceX stock will be one year from now, according to history.

Image source: Getty Images.

The potential of game-changing technology

Before looking back at historical trends, though, let's consider why SpaceX has drawn the interest of investors. Amid the artificial intelligence (AI) boom, investors have seen the potential of game-changing technology to supercharge earnings growth and stock performance. For example, Nvidia's strength in AI chips turned it into a growth machine, bringing in more than $200 billion in revenue in the latest fiscal year -- and at high levels of profitability. As this story unfolded, the stock soared in the triple digits. This makes investors eager to get in on the stock market's next promising growth stories.

Enter SpaceX. The company boasts three dynamic programs: rocket launches, satellite-based connectivity, and AI. SpaceX isn't a completely new kid on the block. The company has been around since 2002, working on its space technology, and this may be about to bear important fruit. SpaceX has been working on reusable rocket technology, and it aims to launch reusable rocket Starship with payloads to orbit as of later this year. The idea is to greatly reduce costs for customers such as NASA and to use the rockets for SpaceX's other business units.

For example, SpaceX rockets may launch materials into orbit for the connectivity business and might be a key player in the AI business' plan to put data centers in space. The ability to transport -- through reusable rockets -- its own materials could offer SpaceX enormous cost savings and efficiency.

Investing in growth

But to make this happen and to accomplish other goals, the company must invest billions of dollars annually. The AI business has required particularly high spending, with capex there topping $12 billion last year and bringing SpaceX to a net loss. So, investors in SpaceX must be willing to accept the idea that spending may keep the company from reaching profitability -- and it's unclear how long this trend will continue.

Meanwhile, SpaceX itself pointed out in its prospectus that some of its goals are linked to technology that hasn't yet been proven -- that means there's a risk SpaceX won't reach these particular goals.

So, while SpaceX offers exciting possibilities, the company also comes with risk. If it doesn't reach certain goals, earnings and stock performance may greatly suffer. Of course, if SpaceX meets at least a few key goals, though, rewards could be tremendous. And that's what many investors are counting on as they buy shares early in the growth story.

A look back in time

Now, let's consider what history has to say about the stock's performance a year from now. SpaceX's first-day performance, a gain of almost 20%, was in line with the average IPO return from 1990 through 2025. That average IPO gain was a little over 21%, according to research by professor Jay Ritter of the University of Florida.

If we look at the performance of 10 of the biggest IPOs from 1999 through 2023, including names like Alibaba, Meta Platforms, and Rivian, the message is clear. Eight of the 10 saw their stock prices fall in the 12 months following their operations. And the average decline was 12%.

So, if SpaceX follows that pattern and loses 12% from the closing price on its first day of trading, the stock price could settle at about $140 a year from now. That's only $5 more than the IPO price.

It's impossible to predict stock market movement with complete certainty, of course. But this look back in time offers us an idea of what's generally happened in the months following a huge IPO -- and it suggests that, if you can handle some risk and are interested in buying SpaceX, you might have plenty of opportunities to do so on the dip.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool recommends Alibaba Group. The Motley Fool has a disclosure policy.