Is SpaceX Stock Headed Higher After a Strong Start on Day One?

SpaceX (NASDAQ: SPCX) stock began trading on Friday, and despite a high valuation out of the gate, it finished its first day up more than 19%, closing at a price of just under $161. Demand for the IPO was strong, as retail investors are bullish on the company, which is run by Elon Musk.

It has been one of the most highly anticipated new offerings, potentially ever. The momentum may very well continue in the days and weeks ahead, but it's also likely to be a volatile investment.

Is it a good idea to buy SpaceX stock right now, or should you hold off given the risks?

Image source: Getty Images.

It's an enticing opportunity, but it could be a bumpy road ahead

In SpaceX's S-1 filing, it estimates its total addressable market to be $28.5 trillion. Between space, connectivity, and artificial intelligence (AI), it has some significant growth opportunities, and that potential is why investors may not necessarily balk at its high valuation; the belief is that the stock can still produce a great return in the long run.

But there's still risk here. While the opportunity may be enticing, that doesn't mean it'll be easy for SpaceX to rapidly grow its sales or generate significant profits. In its most recent quarter, for instance, which covered the first three months of 2026, its revenue rose by 15% to $4.7 billion. It's decent growth, but not exactly earth-shattering. Meanwhile, its net loss of $4.3 billion was eight times the $528 million loss it incurred in the prior-year period. As the business expands heavily into its different ventures, its costs may increase dramatically, making it difficult for SpaceX to get out of the red anytime soon.

Why SpaceX stock may not be suitable for most investors

SpaceX stock has a high valuation, with a market cap of $2.1 trillion that easily puts it among the most valuable companies in the world. It's surprising given its unimpressive financials. The stock may still rise higher, but that'll be indicative of the excitement around the business rather than solid, fundamental reasons to invest in the company.

For most investors, the safest option is to remain on the sidelines with SpaceX stock, because while it may be the hot new investment today, its high price tag could make it vulnerable to a steep sell-off and correction in the near future. This is only suitable for investors with a high tolerance for risk and uncertainty. There are plenty of other growth stocks that could make for better options today.

David Jagielski, CPA 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.