Friday the 13th is unlucky for some, but will it be for SpaceX (NASDAQ: SPCX) stock? That’s because the American ‘space economy’ company is putting its technology through its paces with another important launch.
This time, it’s aiming to achieve a ‘double stage catch’, using the Mechazilla arms to pluck a falling rocket from the sky. Could a fortuitous day put the afterburners on the share price?
Before getting into the details, I should mention that 13 November is merely one possible day for the launch. Much like cricket Test matches or Formula 1 races, the weather can cause postponements and delays when it comes to space launches.
What’s the launch all about?
Whenever the launch is achieved, it’s going to be a significant one. That’s because the aim is to catch both stages – the rockets in the first and the spaceship in the second – for the very first time. Until now, the spaceship’s been landing in the ocean. This is a key milestone in allowing these types of rockets to be cheap and reusable.
While for now the rockets are used for mostly sending Starlink satellites into orbit, the possibilities opened up by rapidly reusable rockets are jaw-dropping. We might be only years away from travel between London and Tokyo taking 45 minutes. We may even see a ‘small step for [a] man’ on the red planet too.
What could be the impact on the SpaceX share price? Well, previous launches have coincided with shifts up and down, but rarely anything overly dramatic. This is partly because sending stuff into space is not a quick process, and also partly because the finances of the firm are, in the medium-term at least, not expected to come from space…
A buy?
As an investment into a business, it must be said that SpaceX is something of a strange one. Why? Because the bulk of the revenue generated over the next few years isn’t coming from its Starlink internet service or government contracts to put things into orbit. Instead, it’s an artificial intelligence (AI) play.
This has a number of consequences. First, it likely plays a role in the company’s staggering $1.8trn valuation. Such a high market value is justified – based on the IPO prospectus, at least – by surging sales expected from its AI division SpaceXAI.
Second, it does make SpaceX look a riskier proposition in the event of an AI stock market crash. We’re still far from a crash, but the recent market jitters – and a veritable bloodbath after the US midterms – suggest there could be a rocky few years in the company’s future.
Lastly, and most relevantly, the impact of AI sidelines the ‘space’ part of SpaceX. Even if the upcoming launch and subsequent launches are all roaring successes, the potential sales from this side of the business are still dwarfed (in the short-to-medium term) by AI. But hey-ho, that seems to be a lot of things these days.
With all that said, I’ll still be keeping a close eye on the latest developments in human space travel. I think the stock’s worth considering too for investors who are aware of what they’re getting themselves into.
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John Fieldsend owns shares in SpaceX.
This story originally appeared on Motley Fool
