Is SpaceX Stock a Buy After Plummeting 28%?

SpaceX, the company formerly known as Space Exploration Technologies, made history as the largest IPO ever, reaching a valuation of $1.8 trillion at its debut. Since then, the stock has experienced a significant decline, falling 28% from its peak of $225 per share. Despite this, the stock has since recovered to $144, still trailing roughly 30% below its high. It's crucial to note that IPO stocks are notoriously volatile.

SpaceX primarily generates revenue from three main businesses: rocket launch services, Starlink's connectivity segment, and its super intelligence (AI) division, a result of recent acquisitions. In the third quarter of 2026, the company reported a substantial $14.6 billion in revenue, a 161% year-over-year increase. The AI segment contributed $6.7 billion to revenue, largely driven by the Cursor acquisition and growth from Grok and Grok Bot.

Starlink's revenue rose by 69% to $5.25 billion, with a significant 89% increase in subscribers over the past year.

Notably, SpaceX conducted a revenue-generating Starship mission in Q3, signaling progress in their development efforts. Despite these accomplishments, skepticism surrounds SpaceX stock's valuation. Annualizing Q3 revenue suggests a potential $100 billion revenue in 2027, resulting in a 20 times revenue valuation. While Elon Musk, SpaceX's CEO, has made bold predictions about the company's future revenue potential, this ambitious growth trajectory is not without its skeptics.

Analysts' price targets for SpaceX range widely, from $118 to $800 per share, reflecting the diverse range of expected outcomes. However, the consensus among investors is that SpaceX stock is a buy. This recommendation is based on Musk's track record of creating shareholder value, particularly with Tesla. Yet, potential risks remain. Diversifying one's portfolio can help mitigate risk associated with such high-risk, high-reward investments.