SpaceX, Musk & the AI Gold Rush: What You Should Know Before Investing

Photo from https://www.spacex.com/

Written by Kimmy Wan

SpaceX is no longer just a rocket company.

Founded by Elon Musk in 2002, it built the most-used rocket in the world and created Starlink, a satellite network delivering internet service to homes, businesses, and remote areas across the world. For most of its history, SpaceX remained private, allowing employees and early investors to sell shares only through occasional tender offers.

That changed this month, 2026.

SpaceX went public at $135 per share under the ticker SPCX, raising $75 billion in what became the largest IPO in U.S. history. Shares initially surged above $225, then quickly pulled back toward the mid-$160s by late June. It has been volatile from day one.

For many investors, this is not simply a SpaceX story. It is an Elon Musk story, an AI story, a Starlink story, and a bet on whether the next generation of technology can justify today’s trillion-dollar valuation.

What You Are Really Buying

SpaceX has several very different businesses under one roof.

Starlink is the company’s cash-generating engine, producing recurring subscription revenue from satellite internet customers. Its launch business remains strategically important, but it requires continued investment in rockets, launches, and Starship development. The company also carries a growing AI component, which is a very expensive bet.

That combination is why investors need to look beyond the headline. A company can have meaningful revenue growth and a powerful long-term vision, yet still be a difficult investment if the valuation assumes years of success before those profits actually come in.

The question is not whether SpaceX is impressive. It clearly is.

The real question is whether the price already assumes too much success.

A Personal Memory From Facebook's IPO

I remember working in Menlo Park during the height of the Silicon Valley tech boom. Facebook was everywhere. I met early employees, mostly engineers and programmers, who were about to receive publicly tradable Facebook shares as the company prepared to go public in 2012. They had the same questions many SpaceX investors are asking right now.

Should they buy more? Should they sell shares to buy a house? Could Facebook really become as big as everyone expected because people were not paying for subscriptions?

At that time, Facebook was still a relatively new idea. People loved Mark Zuckerberg, believed in his vision, and felt certain social media would change the world, not all that different from how people feel about Elon Musk today. Facebook priced its IPO around $40 a share in May 2012. Within months, the stock had fallen below $20, down almost 50%.

When the stock dropped, a lot of those same employees came back with a different question: "Should I sell now? And what would the taxes look like? "

My answer was never a simple yes or no. I asked them to go back to the actual reason they wanted to sell in the first place. Did they need the money for a house or a car? Was too much of their net worth tied up in the same company that paid their salary? Had something real changed about the company or their belief in its future? Or were they just reacting emotionally because the price had fallen?

That distinction mattered most. If someone genuinely needed the money or just to diversify out of a concentrated position, selling some shares was completely reasonable. But if they didn't need the cash, still worked there, understood the risks going in, and still believed in the long-term business, then a short-term price drop on its own wasn't really a reason to panic.

Facebook eventually became Meta, one of the largest companies in the world. But that outcome was nowhere near guaranteed back in 2012. The investors who held on needed two things at once: financial flexibility, meaning they genuinely didn't need that money soon, and emotional discipline, meaning they could stomach watching half their paper wealth disappear without flinching. That's the part people forget when they look back at a success story. Being right about a company eventually doesn't mean the path there is easy.

That same split, financial readiness versus emotional reaction, is exactly what SpaceX investors are living through right now, watching the stock swing from $135 to $225 and back down to $163 within weeks of listing.

It's worth putting SpaceX's debut next to other famous IPOs for more perspective. Meta's story, as I just described, played out over roughly a year before recovery, then went on to become one of the most successful public companies ever built. SpaceX's path so far, a sharp rise followed by a sharp pullback, echoes that early Meta pattern, though nobody can say yet whether it ends the same way.

Not every story goes that direction, though.

WeWork tried to go public in 2019 and the deal fell apart before it even priced, once investors got a real look at its shaky finances and governance problems; it eventually listed through a different route in 2021 and went bankrupt two years after that. Uber sits somewhere in the middle: it priced at $45 in 2019, spent over a year trading below that, and eventually grew into a solid, profitable company. Amazon eventually became one of history's great companies, but after the dot-com crash its stock fell more than 90% before it recovered.

The Real Risk Is Not the Stock Price

All of this points to a bigger lesson, one that matters more than any single company's story: investors get into trouble when they buy based on excitement instead of checking whether the investment actually fits their own situation. Two things worth considering:

First, risk tolerance, which breaks into two separate questions.

One is about money: how much can you actually afford to lose without messing up your life?

The other is about emotions: how calm can you genuinely stay when the price tanks?

Most people overestimate the second one until they've actually lived through a real drop, the way those Facebook employees did in 2012. A good gut-check is asking yourself, before you buy anything, what you'd actually do if the stock fell 50% in a month: sell in a panic, hold steady, or buy more?

Second is time horizon, meaning how soon you'll actually need the money. If you need it within a couple years, a single volatile stock is a bad idea; there's just not enough time to recover from a bad stretch. If you won't touch the money for a decade or more, you can ride out swings like SpaceX's 32% drop from its peak without it wrecking your plan, as long as the long-term reasoning still holds up.

This all matters even more right now because of the AI boom. The opportunity is real. AI-related companies have driven a massive share of stock market gains in the past few years. But that same excitement is exactly what makes it risky too. When a story gets so eye-catching, prices can disconnect from what a company is actually earning today, which is basically what's happening with SpaceX trading at something like 90+ times its 2025 revenue. What if it turns out to be a bubble? The same way "internet" stocks did back in 1999 and 2000. When a huge slice of the market piles into one theme, it gets crowded, meaning everyone is buying into the same concept, so a small disappointment can trigger a massive swing in price.

Then there is the fear of missing out. The more a trend dominates headlines, the harder it is to stay patient. My experience told me that in many cases, when the strongest investors feel they miss out, it is because the prices are already stretched. And even being right about the big picture doesn't guarantee you come out ahead. Investors who couldn't survive that drop, financially or emotionally, even though the long-term story turned out to be true.

So where does that leave someone looking at Musk's empire more broadly, or the AI trade in general? This goes back to that question I kept asking those Facebook employees in 2012: do you actually need this money soon, and has anything really changed about why you believed in this in the first place? Answer that honestly, before the next 50% swing forces you to answer it under pressure.

The investors who get hurt worst in moments like this are rarely wrong about the technology.  They are wrong about how much of their money they place on one idea, how soon they may need the money, and how much volatility they can truly handle.

My conclusion

SpaceX and the AI rush may create enormous wealth over the next decade.

But even a great company can be the wrong investment if it does not fit your financial plan.

The goal is not to chase every great opportunity.

It is to participate after evaluating your risk tolerance, time horizon, and financial flexibility, as you can.

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