This text was written one week before SpaceX’s IPO, which is scheduled to take place on June 12, 2026, at $135 per share.
Facts About Profitability
Although SpaceX’s revenue is growing steadily, the company as a whole is generating a net loss. In 2025, the company increased its revenue by 33% to $18.67 billion, but ended the year with a net loss of $4.94 billion. In the first quarter of 2026, the company reported a net loss of $4.28 billion.
Starlink satellite internet is currently the main driver of revenue and is the only division reporting an operating profit.
Rocket launches are profitable contracts from NASA, but they come with high costs. The development of the Starship rocket for flights to the Moon and Mars is a money pit. Personally, I believe that existing investors (who owned shares before the IPO) have lost patience with this division and no longer want to finance these costly experiments. Musk therefore had no choice but to ask retail investors for money. Many articles mention that the IPO will be an opportunity for large investors to (at least partially) offload this stock.
The xAI artificial intelligence division requires massive investments in data centers and hardware, which is dragging SpaceX’s overall financial performance into the red.
What to do?
I compared my thoughts on the short-term price trends of SpaceX and the AI market as a whole with AI Gemini. It’s quite possible that stockbrokers did the same and may act according to the same scenario.
Phase 1: Before the SpaceX IPO
Investors sell shares of AI suppliers and proxy space companies to raise funds to buy SpaceX.
Phase 2: The IPO Itself and the First Few Days
A buying frenzy will ensue around SpaceX and, more broadly, around AI and proxy space companies.
Phase 3: Rebalancing the NASDAQ-100 Index
Passive ETF funds must mechanically sell off a portion of every company in the index to make room for SpaceX. This will trigger a short-term technical decline in the stocks in this index—namely, AI supplier stocks, but especially the stocks with the largest weightings in the index (Nvidia, Apple, Google, Meta, Broadcom, Micron, Microsoft, Palantir, AMD, Intel, Arm, Amazon, and Tesla). This is the biggest gamble of the entire IPO—buying low and selling high during the rebalancing, which will take place 15 trading days after the IPO, i.e., on July 3.
Phase 4: SpaceX Correction
Once the initial wave of hype subsides, SpaceX will begin to correct downward, dragging the entire NASDAQ-100 index down with it. This will be followed by a sharp rise, particularly among AI suppliers, as SpaceX will have vast amounts of cash and will want to spend it with them—reserving their capacity before the IPOs of Anthropic and OpenAI, which will compete with each other for the resources and capacity of AI suppliers. Incidentally, one of SpaceX’s major long-term suppliers is the European chipmaker STMicroelectronics N.V.; Musk has also praised the collaboration with Intel. AI suppliers could be the winners of the entire IPO story.
Personally, I’ll buy SpaceX purely as a 14-day bet, and after the correction, I’ll focus on AI suppliers: Micron, SanDisk, Western Digital, Nvidia, Vertiv, Lumen, Madison Air, AMD, Inchor, Dell, Marvell, as well as power generation and construction companies like Macom, Comfort Systems, Applied Digital, Bloom Energy, GE Vernova, Siemens Energy, Mastec, Sterling Infrastructure, Quanta Service, Emcor, nVent Electric, Forgent Power Solutions, and Powell Industries.
Risks
Do you really want to invest in a loss-making company that wants to fly to Mars? Maybe you do, but the fund’s portfolio managers don’t have time to wait 15 years for that to happen.
Another 50-50 bet is buying funds like Destiny Tech100 Inc., which already have significant exposure to SpaceX, so the IPO will be a profit for them. Logically, it makes sense to buy before the IPO, when investors can acquire a stake in SpaceX at a price lower than the IPO price; on the other hand, it makes sense to sell before the IPO and buy SpaceX shares directly.
Another general risk for AI is an increase in U.S. interest rates due to inflation caused by high oil prices. I believe that any rate hike will occur sometime after the IPO, not before. If rates do rise, the AI sector will drop significantly (at least temporarily), and investors may rotate capital into defense companies, which are ignored in both the US and the EU despite having billion-dollar contracts.
This raises the question: whether or not the scenario described above plays out, will the SpaceX IPO scenario repeat itself in the case of Anthropic and OpenAI IPOs? I don’t think so—the market will react differently.
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Disclaimer
The user Marek_Trnka holds no position in NasdaqGS:SPCX. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.