Cathie Wood Just Bought More SpaceX Stock. Here's Why I Wouldn't Copy Her
2026-07-24 04:15
•Prosper Junior Bakiny •The Motley Fool
••••• ••••• Axe Capital view
Why I’m Staying Clear of SpaceX Stock Despite Cathie Wood’s Bet
SpaceX’s sky-high valuation doesn’t yet match its modest revenue growth, making it a risky buy for now.
Cathie Wood’s Ark Fund is doubling down on SpaceX, and while the company’s space feats and Starlink growth sound impressive, the price-to-sales ratio near 80 is hard to justify. SpaceX reported $4.7 billion in revenue for Q1 2026, growing at 15% year-over-year, which is solid but nowhere near enough to back such a lofty valuation. Add the heavy spending on AI and Starship development, and you get a classic case of expectations pricing in too much future success. For South African investors, this is less about picking a local stock and more about watching USD/ZAR volatility—tech hype in the US can strengthen the dollar, which hurts the rand. Until there’s a more reasonable entry point or clear proof Starlink and AI projects scale faster than expected, I’d sit on the sidelines. The view might be wrong if SpaceX suddenly nails a massive revenue surge or locks in long-term, lucrative government contracts. this is just my opinion and not financial advice
Avoid SpaceX stock for now and monitor USD/ZAR closely for tech-driven dollar strength. Consider more grounded JSE names with stable cash flows instead.
- SPCX
- USD/ZAR
- SpaceX achieving higher-than-expected revenue growth
- Strengthening of the US dollar impacting rand volatility
6/10
While Cathie Wood's Ark Investment Management continues buying SpaceX stock, the author argues against following her lead. Despite SpaceX's impressive achievements in space travel and promising developments in Starlink and AI computing, the stock's valuation is unjustifiably high at a price-to-sales ratio of 78.09. With only $4.7 billion in Q1 2026 revenue growing at 15% year-over-year and heavy capital expenditures in AI, the stock would need to drop significantly before becoming attractive.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Prosper Junior Bakiny
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: SPCX, GOOG, GOOGL, GOOGM, GOOGN
Sentiment: Negative - Despite acknowledging SpaceX's revolutionary achievements and growth potential in Starlink and AI, the author rates the stock negatively due to excessive valuation. The P/S ratio of 78.09 is far too high relative to current revenue of $4.7B growing only 15% YoY, suggesting the market has already priced in future success and the stock faces downside risk. Mentioned only as a customer of SpaceX's AI computing capacity deal. No investment recommendation or sentiment is expressed about Alphabet itself; it is referenced solely as context for SpaceX's business opportunities.
Keywords: SpaceX valuation, Starship development, Starlink subscribers, AI computing capacity, price-to-sales ratio, investment thesis
Insights:
- SPCX: Negative: Despite acknowledging SpaceX's revolutionary achievements and growth potential in Starlink and AI, the author rates the stock negatively due to excessive valuation. The P/S ratio of 78.09 is far too high relative to current revenue of $4.7B growing only 15% YoY, suggesting the market has already priced in future success and the stock faces downside risk.
- GOOG: Neutral: Mentioned only as a customer of SpaceX's AI computing capacity deal. No investment recommendation or sentiment is expressed about Alphabet itself; it is referenced solely as context for SpaceX's business opportunities.
- GOOGL: Neutral: Mentioned only as a customer of SpaceX's AI computing capacity deal. No investment recommendation or sentiment is expressed about Alphabet itself; it is referenced solely as context for SpaceX's business opportunities.