SpaceX Just Joined the Nasdaq-100. Is It Time to Buy?

Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, just joined the Nasdaq-100 index. That's a big deal because now every investment vehicle that tracks the index has to own shares of SpaceX. This creates a bit of a buying spree, as these indexes have to buy the stock, which can send share prices skyrocketing in some instances.

However, that hasn't been the case as SpaceX's stock declined over the past few days. But can that turn around? Let's take a look.

Image source: The Motley Fool.

The catalyst is over

Because of how these indexes are structured, if SpaceX joins the Nasdaq-100, the next day, every investment vehicle that tracks this index must own shares. So, it's a one-time catalyst. Now that it has occurred and the stock barely budged, SpaceX is back to being its own catalyst.

One red flag is that it's now trading below its $150-per-share debut price, which could be a great buying opportunity or cautionary tale. On the caution side, it could indicate that significant hype has now died off, and further decline could be coming. If you're more bullish, then you might see this as a prime buying opportunity for one of the hottest stocks on the market.

So, where am I on SpaceX?

I think there are far better investment choices than SpaceX. Investors will learn a lot more about SpaceX when it reports quarterly earnings, because all investors now have to go off of its 2025 results. It generated $18.7 billion in revenue during 2025, growing at a 33% pace. At a $1.95 trillion market cap, the stock is valued at a very high 104 times sales. Most of the time, companies valued at 104 times earnings are considered expensive, but since SpaceX isn't profitable, it doesn't even have earnings to value the stock with.

Sky-high expectations are already baked into SpaceX's stock price, and it doesn't look like a compelling investment option. The company will need to grow at a strong pace for several years to reach the valuation it's priced at now, and until I see positive confirmation that it will, I'm shifting my focus to other stocks.

Another catalyst that hasn't occurred yet, but is coming, is increased selling pressure. After the lockup period is over, inside investors will be allowed to sell shares, which could trigger a massive sell-off as selling pressure outweighs demand. The lockup period is tiered over the next year, and until a year has gone by, I think there could be increased volatility in the stock as supply and demand sort themselves out.

SpaceX is already a massive company, and I think investors can afford to stay patient and wait for more information on its business state and for the lockup period to end before taking a position in SpaceX.

Keithen Drury 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.