SpaceX is the world’s largest space launch provider, accounting for roughly half of all orbital launches worldwide last year. It also owns the <a t have one of those, you can check out our roundup of the best online brokers for stock trading.) You can also invest in SpaceX through a variety of ETFs and mutual funds — including certain index funds.
SpaceX’s IPO investors were able to buy shares for $135 each. In the days after the IPO, investors generally had to pay much more than that — sometimes as much as $225 per share. But for much of July, shares were much cheaper.
At least one of the SpaceX IPO brokers, SoFi, charges an additional fee on sales of IPO shares in the first few months of trading. (SoFi charges $50 on an investor’s first sale of IPO shares within 120 days of an IPO, and then $5 on subsequent sales.)
We originally wrote about the brokers offering SpaceX IPO shares back in April in NerdWallet’s investing newsletter, the
Avoiding SpaceX in a Nasdaq or Russell allocation
Suppose you want a Nasdaq index or a broad-market Russell index in your portfolio, but you don’t want it to include exposure to SpaceX. There isa way to have your cake and eat it too in this situation, although it’s a bit complicated and may involve some minimum balance hurdles.
Direct indexing is an investment strategy that involves “reconstructing” an index fund by buying fractional shares of all of its constituent stocks in the same weighting as the index.
It was originally developed as a tax-optimization strategy. Direct indexing makes it possible to harvest tax-deductible losses from specific stocks within an index that have negative year-to-date returns, even when the index as a whole is up. But as NerdWallet strategist Bella Avila noted in a recent article, it also makes it possible to hold an index-like investment minus specific stocks that you want to avoid, such as SpaceX.
There’s a section of our best brokers for tax-loss harvesting roundup that lists brokers that offer direct indexing services with a minimum balance under $100,000.
What’s the final verdict on SpaceX stock?
Some of SpaceX stock’s biggest tailwinds
There’s no question that SpaceX is a leader in the emerging space industry. It’s the largest space launch provider in the world, and its subsidiary Starlink is the largest satellite internet provider in the world, both by comfortable margins.
There’s also no question that investors were excited about its IPO — reports from IPO week showed that there was about $250 billion worth of investor demand for only $75 billion worth of IPO shares, and the price of SpaceX shares surged more than 19% on its first trading day.
Since its IPO, SpaceX has gotten a vote of confidence from its own employees. Its first post-IPO lockup period for employee shareholders expired on Aug. 6, releasing hundreds of millions of shares worth hundreds of billions of dollars onto the market. But the lockup expiration didn’t cause a big dip in the stock’s price, and in fact, the stock rallied in the following days as retail investors snapped up the newly-available shares at higher prices. (If you’re looking to learn more about post-IPO lockup periods from an employee perspective, our team wrote about that topic here.)
Some of SpaceX stock’s biggest headwinds
Having said all that, SpaceX shares have been volatile since IPO day. There are a few statistics in its prospectus and recent financial results that might give investors pause:
The company isn’t consistently profitable yet.SpaceX released its second-quarter earnings report — its first earnings report as a publicly-traded company — on Aug. 4. The report showed that SpaceX lost $0.09 per share over the quarter ended June 30, and lost $1.12 per share over the six months before that date. The company’s losses per share seem to be shrinking over time, but still — it’s wild to value a not-yet-profitable company at nearly $2 trillion.
It expects to make most of its money in AI, not space. That might be a risky bet.SpaceX’s prospectus lists a total addressable market (the theoretical maximum amount of revenue SpaceX could take in from a 100% market share for its products) of $28.5 trillion, but only $2 trillion of that is space stuff like launch services and Starlink. The rest — $26.5 trillion — is AI stuff. Its AI subsidiary, xAI, has struggled to win market share from its competitors. Its chatbot Grok trails ChatGPT and Google Gemini in terms of popularity by a significant margin.
What do financial advisors think?
Frank Paré, a California-based certified financial planner, noted that Tesla, Musk’s other publicly-traded company, took nearly 20 years to become profitable — but that wasn’t always an issue for investors.
“During that time, the stock was off the charts,” he said.
Douglas Boneparth, a New York-based certified financial planner, weighed the pros against the cons in an email interview.
The main pro: A solid space <a ll give them examples of prior IPOs that longer-term didn't do so great – like Figma last year that's down over 80%,” Owens said.
All three advisors concurred thatinvestors should keep their SpaceX allocation to 5% or less of their overall portfolio to manage risk.
That might be difficult if you’re heavily invested in Nasdaq index funds, because at its current market cap, SpaceX already makes up nearly 5% of the Nasdaq 100 index. If it recovers its late-June highs, it will make up well over 5% of the index.
So investors with simple portfolios that have a heavy Nasdaq allotment may want to consider direct indexing (if that option is available) or holding a different index fund.
Other ways to invest in the space industry
SpaceX is now the largest publicly-traded space exploration company, but it’s not the only space stock. In fact, there are a variety of well-established companies in the space industry. Below is a list of the top-performing space stocks that have been trading for at least 1 year and have a market cap of at least $1 billion, ranked by 1-year returns.
The best-performing space stock by one-year return is Iridium Communications Inc (IRDM), which is up 148.56%.
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