The Case for and Against Buying SpaceX Right Now

The ability to calculate wisely in the midst of strong emotions -- fear, greed, excitement, worry -- is one of the hallmark habits of a seasoned investor. To look for the real company beneath the public face, the core of its operations beneath promises, the essential nature of the business -- this kind of clear-eyed analysis, more than anything else, is what's needed in a market as richly valued as it is in 2026.

This is as true for small companies and start-ups as it is for members of the trillion-dollar club, like the newly minted Space Exploration Technologies (NASDAQ: SPCX). Now that the most highly anticipated IPO since Facebook (now Meta Platforms) is over, let's look closely at SpaceX's pros and cons.

Image source: Getty Images.

The bull case: Rockets, AI, and the internet beamed from space

SpaceX is essentially three businesses: space technology, connectivity, and artificial intelligence (AI). This trinity of tech does not have equal parts, however, and it appears that the most profitable one is connectivity.

In 2025, the connectivity segment (driven mostly by Starlink) generated over $11 billion in revenue -- roughly three-fifths of SpaceX's total -- and left the company with over $4 billion in operating income. Starlink currently has over 10 million subscribers across more than 160 countries, a number it claims will grow to 25 million by the end of 2026.

The other two businesses -- space and AI -- together generated just over $7 billion of revenue, underscoring the dominance of connectivity. Here's another figure that stresses it: Between 2023 and 2025, total revenue grew at a compound annual growth rate (CAGR) of 34%. But connectivity? That segment grew at a whopping 71% CAGR.

Connectivity's near-term total addressable market (TAM) -- according to figures from SpaceX's IPO roadshow -- is $1.6 trillion, which was roughly the company's opening valuation. Together with space and AI, SpaceX claims it can address an enormous $6 trillion market opportunity, about three times more than its current valuation.

The bear case: A remarkable company with a sky-high valuation

The bull case for SpaceX is its potential to become deeply embedded in infrastructure, with all three businesses working together to make it the defining company of the century.

The bear case, however, centers on the company's valuation. We are now entering SpaceX's first full week on the market, and the stock is already trading at a steep price. At its current market capitalization of $2.1 trillion, SpaceX trades at 109 times sales and 61 times book value. For comparison, Nvidia, the biggest winner in the AI era thus far and the world's most valuable company at $5 trillion, trades at about 20 times sales and 25 times book.

Another illuminating comparison: Nvidia's fiscal 2026 revenue (roughly $216 billion) was over 11 times more than SpaceX's 2025 revenue (about $19 billion).

That said, Elon Musk claims SpaceX could generate $1 trillion in revenue by 2030, a staggering leap from today's figures. But if we're going off what's on paper, this trillion-dollar company is simply too pricey right now to call it a compelling buy. Patient investors may be better off waiting for this space stock to come back down to Earth before buying.

Steven Porrello has positions in Nvidia. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.