Adria Cimino, The Motley Fool Fri, October 16, 2026 at 5:30 AM EDT 5 min read SPCX -2.33% AAPL -0.28% NVDA -1.84% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Space Exploration Technologies (NASDAQ:SPCX) completed its initial public offering about four months ago, and so far, the stock has offered investors ups and downs -- after rising right out of the gate and climbing 50% to a peak in just a few days, the stock today trades only about 15% above its IPO price of $135. And at certain moments, it fell below that level.
SpaceX has been a closely watched player for a number of reasons. First, its IPO was the biggest ever, raising more than $85 billion after the exercise of an overallotment option, and the company entered the market with a trillion-dollar valuation. That's exceptional, since it took other trillion-dollar companies, from Apple to Nvidia, years on the market to reach that level. The company also specializes in technologies seen as game-changing, suggesting the revenue opportunity ahead could be big. Finally, the presence of chief Elon Musk, known for his focus on innovation, has drawn investor attention.
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Still, SpaceX faces a fair share of risk, and that could weigh on the minds of some shareholders and potential investors. Where will the stock be after one year on the market? History offers us a clear idea.
First, though, let's take a look at SpaceX's business, the possibilities, and the risk. SpaceX operates three growth-oriented businesses: space, satellite-based connectivity, and artificial intelligence (AI). Right now, its biggest revenue driver is the connectivity business, called Starlink, and the biggest drag on earnings is the AI unit. There, capital spending has well exceeded the company's total revenue. In the recent quarter, AI capex climbed to $15 billion, while the entire company generated about $7 billion in revenue.
This level of spending is to be expected in order to build out the technology needed to accomplish future goals. So it's part of the risk of owning SpaceX stock this early in its story. Meanwhile, Starlink is delivering significant growth, with subscribers doubling and that unit's revenue climbing 65%. The AI business is also growing, with Anthropic and Alphabet's Google signing deals with SpaceX to access compute.
Investors also might like the idea that SpaceX's progress in its space unit may significantly benefit its other businesses; the company's Starship, developed as a fully reusable rocket, recently completed its 14th flight, delivering 26 Starlink satellites into orbit. One of SpaceX's goals includes developing data centers in space, and Starship clearly could be useful here too.
So, SpaceX offers exciting possibilities, has made significant accomplishments, and is delivering growth. But the company also must invest heavily to potentially reach its long-term goals, and it's important to keep in mind that SpaceX may take longer than expected to reach certain goals or may not attain them at all. All of this means that SpaceX could deliver explosive growth to investors if it's successful, but if it disappoints, the stock could seriously stumble.
These two scenarios may have driven the stock's ups and downs in recent months, as investors weigh the pros and cons of owning SpaceX shares.
Now, let's consider where SpaceX stock may be one year from its IPO, so that would be in June of 2027. To do so, I looked at 10 of the biggest U.S. IPOs, from Meta Platforms to Uber Technologies, spanning 1999 through 2023. One year after their market debuts, eight out of 10 had delivered a decline, and seven of those were in the double digits. The average drop was 12%.
All of this suggests that, if SpaceX follows historical patterns, the stock may deliver a double-digit decrease in its first full year of trading.
Does this mean you should avoid the stock? SpaceX isn't the best buy for every investor. It carries a decent amount of risk, and we don't yet have great visibility on earnings patterns since the company recently went public -- and only public companies must file reports. Most investors should wait a few more quarters to gain such visibility before diving in.
That said, I wouldn't avoid the stock just because history suggests it may fall in the coming months. What's most important is long-term performance, so aggressive investors aiming to buy SpaceX should focus more heavily on the company's and the stock price's long-term potential.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Apple, Meta Platforms, and Nvidia. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.
SpaceX Has Climbed 15% From Its IPO Price. Here's Where History Says It Will Be After 1 Year. was originally published by The Motley Fool
