Key Points
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SpaceX set a record in June by raising $85.7 billion through its initial public offering, surpassing Saudi Aramco’s previous record.
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The company’s intangible assets and brand value represent its primary investment catalysts and risks.
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Historical data indicates tech-based IPOs often experience significant declines after their debut.
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Two weeks ago, Elon Musk’s Space Exploration Technologies (SpaceX)(NASDAQ: SPCX) cemented its name in the record books. Including the overallotment option exercised by underwriters, SpaceX raised $85.7 billion from its initial public offering (IPO), nearly tripling the $29.4 billion raised by overseas oil titan Saudi Aramco in December 2019.
But investing on Wall Street isn’t about where a stock has been — it’s about where it’ll head next. Although historical precedent can’t guarantee what’s to come, history does tend to rhyme. Using history as a guide, here’s my prediction for SpaceX’s share price by the end of 2027.
Image source: Getty Images.
SpaceX’s intangibles are its biggest catalysts and question marks
Arguably, the leading catalyst for SpaceX is retail investor euphoria, which is incredibly difficult to quantify. Retail investors have flocked to this record-breaking IPO for a variety of reasons:
- SpaceX is at the forefront of two of the largest addressable opportunities, artificial intelligence (AI) and the space economy.
- CEO Elon Musk has a track record for generating outsize investment returns at Tesla.
- SpaceX’s sales growth should be parabolic over the next few years.
To be clear, this means only the S&P 500 will exclude SpaceX shortly after its IPO.
FTSE Russell adds eligible megacap IPOs after the close of the 5th trading day.
Nasdaq adds them about 15 trading days after listing.
The S&P 500 kept its rules, so SpaceX waits the full…
— Hedgeye (@Hedgeye) June 4, 2026
Additionally, the company should receive an early boost from recently amended index inclusion rules. Prior to SpaceX’s debut, Nasdaq Global Indexes reshaped the criteria for Nasdaq-100 inclusion. The low float requirement was shelved, and the time to inclusion for megacap companies was slashed from around three months to just 15 trading sessions.
The U.S. Russell Equity Indexes followed suit with amended fast-track inclusion criteria, as well.
Fast entry into the Nasdaq-100, Russell 1000and Russell 3000 can provide tens of billions of dollars in buying demand from index funds.
Image source: Getty Images.
Caveat emptorretail investors
While SpaceX isn’t without catalysts, history strongly suggests shares will head substantially lower.
To begin with, large-scale IPOs tend to struggle mightily in their first year as public companies. According to research published by Truist Financialthe average year-one drawdown for the 30 most-hyped, tech-driven IPOs since May 2012 is 55%! What this figure tells investors is that the initial euphoria following a company’s debut fades quickly.
Moral of the story-do NOT chase hot IPOs
Year-1 average drawdown = 55%
Year-1 median drawdown = 54Table: Truist pic.twitter.com/xt864JD4Xh
— Puru Saxena (@saxena_puru) June 3, 2026
SpaceX’s valuation is also completely unjustified. Based on what history tells us, no company at the forefront of a game-changing technology has ever sustained a price-to-sales (P/S) ratio above 30 for an extended period. As of the closing bell on June 24, SpaceX is valued at a P/S ratio of 109!
The company’s staggered lockup schedule is another cause for concern. Instead of a 180-day lockup period where insiders can’t sell their shares, SpaceX settled on an accelerated unlock schedule with several time- and performance-based markers. Insiders will be able to cash out at retail investors’ expense, leaving them holding the bag for an expensive, unproven, and unprofitable business.
All of these historical factors suggest that SpaceX’s year-one max drawdown will be larger than the average pullback of 55%.
While I’m inclined to believe retail investors’ allegiance to Musk can support an outsize premium for SpaceX, its egregious valuation and the upcoming lockup period are red flags that can’t be ignored. I expect SpaceX to hover around or just below the $1 trillion market cap mark by the end of 2027, placing its share price in the neighborhood of $75.
