If you’ve followed my work for any length of time, you know I’ve been bullish on SpaceX (SPCX) long before it became a public company. I’ve repeatedly said that Elon Musk has built one of the most important companies of our generation, and nothing that has happened since last week’s IPO changes that view.
In fact, if anything, the successful debut reinforces my conviction.
SpaceX sits at the intersection of several of the most powerful trends in the world today: artificial intelligence, communications, defense, national security, and the commercialization of space.
When I look out 5 to 10 years, I can absolutely envision a scenario where SpaceX becomes a $10 trillion company.
Why I'm Not Chasing the Stock Today
History teaches us that some of the most anticipated IPOs eventually give investors a better entry point. The excitement surrounding a newly public company often pushes shares well beyond what fundamentals can justify in the short term. That doesn’t mean the company is bad. It simply means expectations can get ahead of reality.
My guess is that investors will eventually get an opportunity to buy SpaceX at a lower price than where it trades today. But that’s not what has my attention.
What interests me is what happened to the rest of the space sector after the IPO.
While investors rushed to buy SpaceX, many of the other publicly traded space companies were either ignored or sold off. Capital flowed toward the headline and away from the companies that are helping build the broader space economy.
I think that is a mistake.
The future of space will not belong to a single company, no matter how dominant SpaceX becomes. The industry will require satellite operators, communications providers, launch companies, defense contractors, infrastructure providers, manufacturers, and critical materials suppliers.
Just as the internet created hundreds of winners beyond Microsoft, and artificial intelligence is creating winners beyond Nvidia, the space economy will create opportunities far beyond SpaceX.
The Valuation Gap That Has My Attention
Today, SpaceX is worth more than two trillion dollars. Meanwhile, many of the companies benefiting from the same long-term trends are worth only a few billion dollars. Some of them have growing revenues, strong backlogs, government contracts, and technologies that are becoming increasingly important to the future of the industry. Yet collectively, much of the public space sector is worth only a fraction of what investors currently assign to SpaceX alone.
That’s where I believe the better risk-reward opportunity exists today.
To be clear, I’m not bearish on SpaceX. Quite the opposite. I believe its success will help accelerate investment throughout the entire sector. The bigger SpaceX becomes, the more attention investors, governments, and corporations will pay to the opportunities being created around it. In many ways, SpaceX may become the rising tide that lifts the entire industry.
Where I'm Looking While Everyone Watches SpaceX
Tonight at 5:00 p.m. ET, I’ll be discussing why I believe we’re still in the early stages of one of the most important investment themes of the next decade. I’ll also share several opportunities that I believe investors are overlooking as they focus exclusively on the largest IPO in history.
While everyone is watching SpaceX, I’m more interested in what comes next.
To your future success,
Matt McCall
Founder, NXT Wave Research
