SpaceX Is the 5th Most Valuable Public Company in the World. Can It Overtake Nvidia, Alphabet, Apple, or Microsoft?

In the three trading days from its June 12 initial public offering (IPO) to June 16, Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, became the world's fifth-most-valuable company, surpassing heavyweights such as Amazon and Taiwan Semiconductor Manufacturing.

There has been a lot of momentum behind SpaceX's stock since its IPO, but can it continue and surpass Nvidia, Alphabet, Apple, and Microsoft? One is much more likely to happen than the other three, but that doesn't make it a no-brainer investment right now.

Image source: The Motley Fool.

How much SpaceX's valuation would need to grow

SpaceX's run-up in the short time since its IPO has been par for the course for many blockbuster IPOs. Nvidia jumped 63% in its first trading day; Microsoft jumped up 33%; Apple jumped up 31%; and Alphabet jumped up 18%. So far, SpaceX is up nearly 35% since its IPO, with a market cap of $2.73 trillion.

Here are the market caps of the four mentioned tech heavyweights:

• Nvidia: $5.05 trillion
• Alphabet: $4.54 trillion
• Apple: $4.38 trillion
• Microsoft: $2.92 trillion

I don't think SpaceX catching Nvidia, Alphabet, or Apple is reasonable, but I wouldn't be surprised if it passes Microsoft. The $4 trillion mark seems a bit out of reach for SpaceX right now, but it's knocking on the door of $3 trillion.

Should you invest in SpaceX and ride the wave?

Even if SpaceX were to surpass Microsoft, I don't see it being sustained in the long term. Right now, SpaceX is riding the IPO wave, but eventually insiders (like investors and employees) will be able to sell their shares, which will likely push the stock down as supply increases.

Past happenings don't guarantee future happenings, but historically, most large IPOs decline in the months following their IPOs. Only time will tell whether SpaceX follows that trend, but I believe the stock's high price makes it more vulnerable to a large pullback.

There are many things to like about SpaceX's business -- including aerospace progress, Starlink growth, and the amount of artificial intelligence (AI) computing power it has -- but that doesn't always mean the stock will perform well. Don't let fear of missing out (FOMO) and its current growth be the reason you invest.

If you're interested in investing, I would recommend dollar-cost averaging into a position to help protect you against the high volatility the stock is likely to experience in the coming weeks and months. Or, I'd wait until the current hype fades a bit and you get a better idea of how the stock is valued.

For now, I'd still rather invest in Nvidia, Alphabet, Apple, or Microsoft.

Stefon Walters has positions in Apple, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.