Some early analyst estimates have rolled in, and it’s official: SpaceX is more expensive than any stock in the S&P 500 when looking out to next year.
The company isn’t profitable, rendering price-to-earnings comparisons useless. But SpaceX shares trade at an eye-popping 39.2 times projected sales for 2027, based on Wednesday’s closing price as well as the consensus of estimates from four analysts who have so far issued financial models. For comparison, Tesla’s stock trades at 12.6 times estimates for the same period, and that in and of itself is widely considered to be an expensive valuation.
SpaceX isn’t in the S&P 500 and, unlike with other indexes, the company won’t get to bypass the benchmark index’s existing waiting periods or profitability requirements. But SpaceX’s stock is pricier than any of the current index components on a 2027 price-to-sales basis, according to Dow Jones Market Data.
The second most expensive stock by that metric is Palantir Technologies, which was trading at 28 times sales as of Wednesday’s close, according to Dow Jones Market Data. In the past, some analysts have said it was tough tojustifyPalantir’s valuation, although that’s arguably become easier over time as the stock has declined this year.
SpaceX shares fell about 5% on Wednesday and slipped 3.6% on Thursday. But the shares are still up 37% from their IPO price, as investors react to the fear of missing out and put more stock in CEO Elon Musk’s vision than they do in conventional valuation methods.
The company’s public debut is sparking some bubble talk, along with debate over whether SpaceX has parallels to Netscape, whose 1995 initial public offering ushered in a new era for internet companies — only for the browser operator to later find itself displaced.
“Netscape’s 1995 IPO became the Internet launch point that spurred investors to dream bigger,” Evercore ISI’s Julian Emanuel wrote in a June 14 note to clients, writing that SpaceX could launch “‘Dream Big FOMO’ and the next leg of the bull market.”
“FOMO” mentality has driven unprecedented market action surrounding SpaceX, which officially went public last Friday. Billions of dollars have flowed into exchange-traded funds designed to offer exposure to the stock, while retail investors have been dumping their cash into SpaceX, sucking attention away from major names like Nvidia and the rest of the “Magnificent Seven”.
When Netscape went public, a company that had never turned a profit suddenly became a $2.9 billion entity. It “validated the imagination,” Maury Blackman, managing director of Pierpoint Ventures, wrote in a June 12 blog post ahead of SpaceX’s IPO.
“It will tell every CEO, every board, every institutional investor, every government, and every ambitious young engineer that the direction has been set,” Blackman wrote of SpaceX’s IPO. “That the question is no longer whether humanity will become a multi-planetary species, but how fast, and who will build the infrastructure that makes it possible.”
Netscape’s IPO, of course, also marked the beginning of the dot-com bubble that eventually burst. Emanuel said that the artificial-intelligence rally could have several months’ of room to run, highlighting the possibility that “animal spirits” are converted into “full-on FOMO.”
“A bubble is a normal occurrence in a technology revolution,” said Jim Thorne, chief strategist at Wellington-Altus. “We are going to over-apply, spend too much capital. We are going to overbuild.”
The “profound question,” Thorne told MarketWatch, is not whether the market is in a bubble, but what the aftermath will look like.
There are a few differences between Netscape and SpaceX. For one, while both were initially valued at hefty multiples, SpaceX has a much bigger business and a strong foothold in several industries.
The company holds the keys to outer space for many companies and for the U.S. government, dominating the rocket-launch industry with few rivals capable of challenging it. SpaceX also has a growing advantage in the AI sector, as well as in satellite communications.
That’s why some analysts are willing to bet that SpaceX shares will rocket higher. Oppenheimer analysts on Thursday raised their price target for the stock to $250 per share from $190 per share. That implies a roughly 39% increase from current trading levels and an 11% bump from the stock’s peak price.
“We believe that SpaceX will use its expertise in engineering, manufacturing and space technologies to grow to the largest
communications, cloud/AI company in the world,” Oppenheimer’s Timothy Horan said in a note to clients.
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