Don’t Buy the SpaceX IPO. Do This Instead...VIEW IN BROWSER
For the past few weeks, I had not planned to spend much time talking about the SpaceX IPO. Left to my own devices, I’d rather talk about AI factories, memory shortages, order backlogs, earnings revisions and the companies quietly supplying the next great tech boom. But over the past few days, my readers have kept asking me the same question: “Louis, what do you think about the SpaceX IPO?” And then, my daughter Crystal finally cornered me. She wanted to talk about it on Navellier Market Buzz, our YouTube channel. So, I gave her my honest answer: No, I’m not buying the SpaceX IPO. Not because I dislike the company. Quite the opposite, actually. SpaceX is a remarkable business. Starlink has changed the world. And Elon Musk has proven again and again that he can turn impossible ideas into real, profitable enterprises. But IPOs are a different animal, folks. And when Wall Street starts banging the drum on a deal this big, I think individual investors need to slow down and ask a very simple question: Who is really getting rich here? In today’s Market 360, I’m going to answer that question. I’ll tell you why I’m steering clear of the SpaceX IPO for now… why Wall Street’s excitement may have more to do with fees than fundamentals… and how investors can still profit from Elon Musk’s next great breakthrough without buying SpaceX at all. Why I’m Not Chasing SpaceXSpaceX may soon become the biggest IPO in stock market history. According to recent reports, the company could go public at a valuation of around $1.75 trillion and raise roughly $75 billion. That’s enough to get every banker on Wall Street salivating. And that’s the first thing investors need to remember: Wall Street makes money by taking companies public. The underwriters get paid. The lawyers get paid. The bankers get paid. The early backers get their liquidity event. And everybody involved has a strong incentive to make the story sound as exciting as possible. Again, that does not mean SpaceX is a bad company. I think it’s phenomenal. But a great company is not always a great stock at any price. And by the time a hot IPO reaches the public market, insiders, early backers and private investors have often already had the first bite of the apple. That’s why I don’t chase IPOs. So, when my daughter asked me about SpaceX, I told her the same thing I’ve told my subscribers for years: I cannot calculate risk on IPOs. A stock must trade publicly before my Stock Grader system (subscription required) can properly analyze it. I need to see the financials. I need quarterly earnings. I need analyst revisions. I need institutional buying data. Most importantly, I need to run it through my eight-factor fundamental model. Ideally, I want to see about a year’s worth of data. Could SpaceX pop on day one? Sure. Could it go higher over time? Absolutely. I would never bet against Elon Musk. That has been a losing game for a lot of people. But that does not mean I need to chase the IPO. The typical pattern with hot IPOs is that they gap higher, then back and fill. There is often a better window later. If SpaceX comes public, trades for a while, pulls back and starts producing the kind of numbers my Stock Grader system likes, I’ll take a look. Until then, I’m not investing. I’m guessing. And I don’t guess with my money.
The Better Way to Play the BoomNow, does that mean investors should ignore the SpaceX IPO? No. In fact, I think the SpaceX IPO could create a lot of opportunities. But the real key is profiting from the excitement IPOs generate, not necessarily from the IPO itself. During the California Gold Rush, the folks who made the most reliable fortunes weren’t always the miners digging in the dirt. It was often the suppliers – the people selling picks, shovels and jeans. That’s the way I prefer to play big booms. Let everyone else chase the obvious name. I want to own the companies supplying the boom. That’s exactly how I look at SpaceX. While everyone else is asking, “How do I buy SpaceX shares?” I’m asking a different question: Who sells SpaceX the mission-critical materials, parts and infrastructure it needs to keep growing? After SpaceX goes public, I think you’re going to see those space-related names really take off. And fortunately, we already hold a couple of interesting suppliers in our Growth Investor Buy List. For example, I like Howmet Aerospace, Inc. (HWM), which is an expert in metals, titanium and other advanced materials used in aerospace, defense and space. We added HWM to Growth Investor back in June 2024. We’re currently up by more than 230%. But I think we’re just getting started... 
I also like Carpenter Technology Corporation (CRS), another company tied to titanium, specialty metals and high-performance materials. We loaded up on CRS in November 2024. As of this writing, we’re up 143%. The point is, you don’t always need to buy the rocket company. Sometimes, you’re better off buying the companies that help build the rocket. This is the same lesson investors should have learned from Tesla, Inc. (TSLA). When Tesla took off, everyone wanted to own it. And yes, Tesla made a lot of people rich. But the electric vehicle boom was much bigger than Tesla. It created massive demand for lithium, semiconductors, charging infrastructure, battery components and other key suppliers. Take Albemarle Corporation (ALB) for example. It’s one of the world’s major lithium producers. And in order to have electric vehicle batteries, you need a lot of lithium. When the EV boom really took off, ALB soared right along with it. From early 2020 to its late-2022 peak, the stock climbed more than 500% – the same performance as Tesla during that period. 
Elon’s Bigger OpportunityThere’s another reason I’m not spending all my time focused on the SpaceX IPO. I believe Elon Musk’s next great breakthrough may be much bigger than rockets. It’s happening in artificial intelligence. We all know Elon has big plans for things like space, autonomous EVs, robotics... But to make it all happen, he’s going to need the kind of AI infrastructure most companies can only dream of. We’re talking about enormous AI factories, massive GPU clusters, data centers, and everything else needed to push AI into its next stage. And all of it will be on an unprecedented scale. This is where I believe the real opportunity is. Not Tesla. Not SpaceX. The companies supplying Elon’s next AI boom. That’s where my system is finding some of the best opportunities in the market today. In fact, I recently put together a special presentation showing you three ways to play Elon’s next great breakthrough. And I believe all three are better opportunities than chasing SpaceX on IPO day because they are already public. They already have financials. They already have earnings data. And most importantly, they already have strong ratings in my system. Look, if SpaceX goes public and eventually earns its way into my system, I’ll take a look. But I’m not chasing it on day one. I’d rather profit from the excitement the IPO creates… while focusing on the companies quietly supplying the next great tech boom. Click here to watch my full presentation now – and learn how you can, too. Sincerely, |
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