SpaceX Stock Soared on Day One. Is the Stock a Buy at $2 Trillion?

Space Exploration Technologies (NASDAQ: SPCX) stock recorded its first trade as a public company at $150 a share -- $15 above the official IPO price that many investors never actually got a chance to pay. Closing above $160 on that first day, only a lucky few actually managed to buy at the IPO price and book the "official" 19% profit on Day One.

And that's fine.

If you didn't get a chance to buy until Day Two, there was still another 20% profit waiting for you.

And even on Day Three, another 10%!

Image source: Getty Images.

SpaceX takes a U-turn

It wasn't until Day Four, in fact, on Wednesday, that SpaceX finally stopped going up and began coming back down. Selling continued into Thursday, took the holiday weekend off -- then plummeted 16% when markets reopened on Monday.

As I type this, SpaceX shares have come almost full circle, closing below $155 per share on Monday. Elon Musk's famed space-and-artificial intelligence stock, which was worth more than $2.7 trillion just a few days ago, is now valued at barely $2 trillion.

And again, that's OK.

SpaceX versus the alternatives

It's OK for any number of reasons, but let me cover just three.

First, if you think SpaceX is the best way to invest in the stock market, well, today you can buy SpaceX stock for almost the best price you've ever had a chance to buy it -- just 3% over the open price. And really, if you buy Elon Musk's argument that SpaceX has a $28.5 trillion total addressable market -- but is doing less than $20 billion in sales today, you're still basically getting in on the ground floor at today's share price of $154 and change.

Second, if you think SpaceX is a lousy way to invest in the stock market -- because it's obviously overpriced, for example -- then you've dodged a bullet.

Third and finally, if you're not quite sure what to make of SpaceX and want to wait and see how things shake out before buying, well, that's fine, too. Maybe you like the idea of investing in space, and recognize that SpaceX is far and away the world's leading space company, but are hesitant to pay 125 times sales for a "space stock" that's spending all its money on artificial intelligence.

In that case, you might want to invest in Rocket Lab (NASDAQ: RKLB) instead. The No. 2 rocket launcher in the U.S., Rocket Lab, looks much closer to breakeven than SpaceX right now; it isn't splitting its attention between AI and space, and at 88 times sales, its stock is 30% cheaper than SpaceX.

Or perhaps you like the idea that SpaceX is investing in artificial intelligence, and you're fully convinced that AI is the future? That doesn't necessarily mean you must own SpaceX stock to participate in that future. You could buy the company that sells SpaceX its AI chips instead -- Nvidia (NASDAQ: NVDA), which trades at only 20 times sales and is already profitable.

Ultimately, the question isn't whether SpaceX is a buy at $2 trillion. The real question is whether it's the best stock for you, at any price.

Rich Smith has positions in Rocket Lab. The Motley Fool has positions in and recommends Nvidia and Rocket Lab. The Motley Fool has a disclosure policy.