Space Exploration Technologies (SPCX +15.83%) has been trading publicly for just a few weeks now, and many investors are already trying to figure out the best approach to investing in the stock.
While the company has impressive rocket technology, a booming satellite internet business, and a burgeoning artificial intelligence business, it's probably best not to buy the stock right now. Here's why and what you should do if you already own shares of SpaceX.
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Why you shouldn't buy SpaceX stock right now
I understand the appeal of buying shares in a newly public company at the forefront of advanced rocket technology and artificial intelligence (AI). But there are a couple of good reasons not to buy SpaceX right now, including the astronomically high premium for its shares and massive spending.
SpaceX's capital expenditures reached $20.7 billion last year, and it's on pace to exceed that amount this year. The company had already $10 billion in capex spending in Q1 2026.
Some of the company's biggest expenses come from its AI investments, as SpaceX builds more AI data centers to run its Grok chatbot and to rent out its data center capacity to other companies.
AI spending is understandably under much more scrutiny by investors lately, as they question whether high costs will eventually turn into profits. For SpaceX, profitability isn't expected any time soon, raising the risk that it will invest heavily in AI without seeing a near-term return.
And then there's the cost of SpaceX shares. The company's stock currently has a price-to-sales ratio of 111, compared to the tech sector average of just 9.
An expensive share price, heavy spending, and no profits aren't exactly a great combination for a great long-term investment.
NASDAQ: SPCX
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If you already own SpaceX, holding your shares may be smarter than selling
If you already own SpaceX shares, it's probably best not to sell them yet. Its stock had an opening price of $150 on its IPO day, reached $225 in the first few days, and is around $169 per share as of this writing.
SpaceX's stock volatility likely means that you could lose money if you sell your shares right now. It's also not recommended to buy and sell stocks so quickly. That's more like day trading than investing.
Long-term investors should plan to buy and hold shares for at least five years, allowing the company to execute on its long-term plans and giving shareholders time to ride out rough patches. Of course, there are a handful of good reasons to sell a stock, including if your investment thesis has changed or if you need the money for something more pressing.
Still, if you've bought SpaceX, you may want to hold on to your shares and see whether the company can deliver on some of its grand goals, like building data centers in space. But if you haven't hit the buy button yet, it's best to wait to see how the company manages its spending and losses before committing to holding onto SpaceX stock for the next several years.
