I Like SpaceX, But I'm Not Buying the Stock for One Simple Reason

I like Space Exploration Technologies (NASDAQ: SPCX), otherwise known as SpaceX. It's one of the most extraordinary companies I've ever come across.

Starlink, its satellite internet service, is becoming a global business. SpaceX's artificial intelligence operations are growing at an extraordinary pace. Falcon 9 has already transformed the economics of launching satellites. And Starship -- the next-generation rocket -- could eventually make it dramatically cheaper to get payloads into orbit.

The company has an ambitious founder, an enormous balance sheet, and a track record of turning seemingly impossible ideas into real businesses. So why am I not buying SpaceX stock despite all these reasons?

Image source: Getty Images.

SpaceX is an incredible business

Let's get one thing out of the way. This isn't a bear case on SpaceX. The company is executing at a level few businesses can match.

Revenue reached approximately $7.8 billion in the second quarter of 2026, up 92% from a year earlier. Starlink generated $4.3 billion of revenue and roughly $1.7 billion of operating income. Its subscriber base reached approximately 12 million. Meanwhile, AI-related revenue surged 247% to approximately $2.6 billion.

Those aren't numbers you see from an ordinary aerospace company. They show that SpaceX is already building multiple large businesses simultaneously. And the opportunity ahead could be much larger across these segments.

In short, I think SpaceX is a great company well-positioned for long-term growth.

But the market already knows the story

Here's the problem with investing in a great company: Everyone else can see it, too. At $153 per share (as of writing), SpaceX has a market capitalization of around $2 trillion. Comparatively, annualized revenue ($7.8 billion x 4) stands at $31.2 billion, and the company is still unprofitable.

At that price, investors aren't simply buying today's business. They're buying a huge portion of tomorrow's success. They're assuming Starlink will continue to grow and that AI will become a major, highly profitable business. They're assigning substantial value to Starship before its economics have been proven at commercial scale. Or investors are exuberant and willing to pay any price for the stock.

And that makes investing in SpaceX rather difficult. Imagine SpaceX executes well and becomes an extraordinary business over the next decade. Starlink keeps compounding. AI becomes a major profit center. And Starship works.

Yet, the stock could still disappoint. Why? Because if investors have already paid for much of that success today, it leaves little room for future price appreciation. That's the difference between a great company and a great investment.

What would make me change my mind?

Simple. I'm waiting for the stock price to become more attractive relative to the opportunity. That could happen in several ways. SpaceX could continue to grow rapidly while its valuation remains relatively flat, allowing the business to outpace the stock price.

Or the market could become worried about the company's enormous capital spending -- $18.4 billion in a single quarter -- prompting investors to question the return on capital. It could also happen if execution encounters speed bumps, such as Starship experiencing meaningful delays or Starlink growth temporarily slowing.

Any of these events could create a better entry point without destroying the long-term thesis. That's the kind of opportunity I'm looking for. Because the best time to buy a great business isn't necessarily when everyone agrees it's great -- it's when the market temporarily becomes less certain about how great it can become.

The downside is that the waiting may cause me to miss some upside. And that is the uncomfortable truth about investing: Sometimes the right decision is to let an opportunity pass, especially if it doesn't offer the right risk-reward ratio.

What does it mean for investors?

There's no doubt that SpaceX is one of the most interesting companies on the planet, doing things that almost no other companies are doing. But still, investing is not about buying the best companies. It's about buying the right company at the right price. In other words, valuation matters.

In short, I like SpaceX. I believe in its long-term opportunity, and I wouldn't be surprised if it becomes one of the greatest companies of the next decade. I'm just not willing to pay today's price for that outcome. I'd rather wait for the market to give me a better entry point.

Lawrence Nga has 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.