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Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, has taken investors on a roller-coaster ride since its initial public offering (IPO) in June. The stock immediately shot up to more than $225 after going public at $150. Then a harsh sell-off nearly took the stock below $100 per share. However, it has rebounded more than 37% from its August lows and is now priced right around its $150 IPO price. So, if you ignored the IPO and just stayed patient, the stock is still priced at almost the same level and ready to be analyzed and maybe purchased.
If you’ve got $5,000 sitting around, now could be the time to buy the stock. Why? Its artificial intelligence (AI) growth is off the charts.
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A new investing thesis has emerged with SpaceX
SpaceX splits its company into three segments: Space, Connectivity, and artificial intelligence (AI), which the company calls Super Intelligence. When SpaceX went public in June, most investor excitement centered on its Connectivity division, which primarily consists of the Starlink satellite internet service. Although this was producing strong growth, I didn’t really buy this investment thesis because it’s just internet service. Eventually, it will run out of clients to sell to and become a low-growth business unit. While the Space unit is exciting, it hasn’t done much lately and wasn’t as impressive financially as many thought. Lastly, AI was a new segment for SpaceX, as it acquired xAI shortly before going public. AI is obviously all the rage in the investment world, but investors didn’t really buy that AI was a huge theme for SpaceX (including me). As a result, I’ve largely ignored the stock because it didn’t have a compelling investment case.
But I was wrong.
AI is actually the reason to invest in SpaceX. SpaceX’s acquisition of Cursor, an AI-first code editor, combined with rising Grok subscriptions and its AI agent platform, Grok Bots, has led to simply incredible growth for SpaceX. During the third quarter (Q3), SpaceX delivered 830% revenue growth — from $813 million last year to $7.56 billion this year.
That far outpaces the 69% Connectivity growth (still impressive) and the mere 6% Space growth. SpaceX is becoming more of an AI investment than a space one, which is why many (including me) are becoming more bullish on the stock. In fact, I wouldn’t be surprised if a $5,000 investment now is worth more than $10,000 by 2028, especially if you trust Elon Musk’s outlook.
