Should You Buy SpaceX Stock in October?

For most of its history, Space Exploration Technologies (NASDAQ: SPCX) was synonymous with rockets. That description is starting to look outdated. Following its initial public offering (IPO) in June, SpaceX gives investors exposure to several markets at once: commercial space launches, government contracts, Starlink, artificial intelligence (AI) infrastructure, and perhaps even space-based computing.

With SpaceX expected to report its next quarterly earnings in early November, investors have a decision to make: Is October a good time to buy SpaceX stock, or has excitement surrounding the company gotten ahead of itself?

Image source: The Motley Fool.

AI is becoming a meaningful contributor for SpaceX

SpaceX's expansion into AI infrastructure might be the most underappreciated part of the story. Around the time of its IPO, the company signed compute agreements with Anthropic and Google. Since its public debut, SpaceX has expanded its AI customer list.

Reflection AI is spending roughly $150 million per month to rent a cluster of Nvidia GB300 chips at SpaceX's Colossus 2 data center. The deal value could be worth up to $6.3 billion over the entire life of the contract. During SpaceX's Q2 earnings call, management disclosed the company signed a six-month cloud services agreement worth $6.7 billion and noted that capacity will ramp throughout October. Most recently, SpaceX CFO Bret Johnsen shared with investors another hosting agreement worth approximately $1.11 billion per month, or $13.3 billion annually.

Taken together, SpaceX is forecasting its combined businesses could reach a $100 billion annualized revenue run rate by December. This is important because this growth underscores how the company is diversifying beyond its roots in launch services. SpaceX is proving it can build AI infrastructure at hyperscale speed, sell compute capacity to some of the world's fastest-growing technology companies, operate a high-margin connectivity provider in Starlink, and potentially use its own rockets to launch computing infrastructure into orbit.

A trifecta of launch milestones

The last several days were a good showcase of SpaceX's other competitive advantage: launch cadence. On Sept. 28, Starship reached orbit for the first time and successfully deployed 26 Starlink V3 satellites. Although the mission ended earlier than originally planned following an engine issue, successfully putting an operational payload into orbit represents an unprecedented step toward making Starship commercially useful.

A trifecta of launch sequences subsequently occurred on Oct. 1. SpaceX launched Crew-13 to the International Space Station (ISS) for NASA, further validating Falcon 9 and Dragon as capable human-spaceflight infrastructure.

A few hours later, the company carried 130 payloads into orbit as part of the Transporter-18 mission. Of note, one was Google's prototype satellite for Project Suncatcher, an experiment testing whether its custom silicon, called Tensor Processing Units (TPUs), could support AI computing in space. This mission is particularly interesting given Google's existing relationship with SpaceX on terrestrial AI compute.

Finally, SpaceX's Falcon Heavy was part of a classified launch, called NROL-97. Participating in a mission for the National Reconnaissance Office mission expands SpaceX's role beyond commercial deployments into national security launches.

Should you buy SpaceX stock before earnings?

I'll admit that SpaceX's business looks stronger now than it did a few months ago. But that doesn't automatically make SpaceX stock a screaming buy in October. The company is already valued at roughly $2 trillion, meaning investors aren't exactly discovering a new growth story. Moreover, SpaceX still carries hefty losses as it invests aggressively in AI infrastructure and Starship.

With earnings just a few weeks away, SpaceX really needs to demonstrate that its compute contracts are translating into revenue and improving economics -- not merely generating buzzy headlines. With this in mind, I wouldn't view October as a month to chase SpaceX's momentum simply because Starship reached orbit or several launches went well.

For long-term investors, the bigger thesis remains compelling. SpaceX increasingly sits at the intersection of AI, satellite internet, government infrastructure, and commercial spaceflight. Investors who want exposure to the company are best off using dollar-cost averaging --building a position gradually at different price points over time rather than making earnings day an all-or-nothing bet.

Adam Spatacco has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.