Investors are excited about SpaceX’s upcoming IPO, but history shows that many blockbuster listings fail to outperform the broader market over time.
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| Analysts say SpaceX’s massive valuation reflects investor optimism around AI and space technology, but past IPO trends suggest caution for retail buyers chasing early momentum. Image: CH |
Tech Desk — May 26, 2026:
The upcoming IPO of SpaceX is already shaping up to be one of the biggest financial stories of the year. Investors are rushing to talk about the company’s growth potential, its dominance in satellite technology, and Elon Musk’s ability to turn ambitious ideas into massive businesses.
But beneath the excitement, Wall Street history tells a more complicated story.
A Reuters analysis of the 50 largest IPOs over the past five years found that most failed to outperform the S&P 500 after going public. In simple terms, investors often would have made more money by buying a basic index fund instead of chasing high-profile stock market debuts.
That is a striking reminder at a time when hype around technology companies is once again reaching extreme levels.
SpaceX is reportedly targeting a valuation of around $1.75 trillion. That would place it among the most valuable companies in the world before it even begins trading publicly. The valuation reflects enormous confidence in the company’s future, especially in areas like reusable rockets, satellite internet, and commercial space expansion.
Still, massive expectations can become a problem.
The company reportedly lost nearly $5 billion last year, while its projected price-to-sales ratio would sit close to 100. For comparison, even AI giant Nvidia trades at a much lower multiple.
Investors are essentially betting that SpaceX will dominate industries that are still developing. That may happen, but history shows that future growth stories do not always translate into strong stock performance.
The IPO market is full of examples.
Rivian Automotive briefly became one of America’s most valuable automakers after its IPO in 2021. Investors believed it could become a major rival in the electric vehicle race. Today, its shares remain far below their debut levels as losses and cash burn continue to weigh on confidence.
Didi Global also entered public markets with enormous momentum before regulatory pressure in China forced the company into crisis. Its stock collapsed after delisting from the New York Stock Exchange.
Even successful technology firms have struggled to maintain their early momentum.
Design software company Figma surged during its market debut, but concerns about generative AI disrupting its business later pushed shares sharply lower.
At the same time, some companies tied to artificial intelligence have delivered exceptional returns.
Chip firms like Astera Labs and Arm Holdings became standout winners as investors poured money into AI infrastructure plays. Their success reflects how strongly markets currently believe in the long-term AI boom.
That optimism is one reason analysts expect future IPOs from companies like OpenAI and Anthropic to attract enormous demand.
SpaceX appears ready to benefit from that same wave of enthusiasm.
One notable difference is that Elon Musk plans to make shares available to retail investors through platforms like Robinhood and SoFi. That could give ordinary traders access to IPO pricing instead of forcing them to buy after first-day price surges.
That matters because many investors historically lose money chasing IPO momentum after trading opens. Early excitement often pushes prices sharply higher before reality catches up.
The deeper issue is how modern startup investing has changed.
Companies now stay private much longer than they did a decade ago. By the time retail investors can buy shares, early venture capital firms and institutional investors have often already captured the biggest gains.
That leaves public investors paying premium prices for future expectations rather than current profits.
SpaceX may still become one of the defining companies of this generation. Its influence on aerospace, communications, and global technology is already enormous.
But the Reuters analysis suggests that even revolutionary companies are not automatically great stock investments at every price.
For investors watching the countdown toward launch day, that may be the most important lesson of all.