Space Exploration Technologies‘ (NASDAQ: SPCX) shares are going to crash. That’s what some were saying before the SpaceX IPO. The small supply of shares released to the stock market would keep the share price artificially high. When the ‘share unlocks’ came out – the days when employees were allowed to sell the shares they owned – the SpaceX share price would sink like a stone.
Well, on the 24 September, the largest batch so far of regular investor shares was released. A massive tranche of 328m shares became available to be sold on the market. Guess what happened?
In short, not much at all. The SpaceX share price was at $148 at the start of the day’s trade, and also at the end. Nor was there any meaningful change in the days before and after.
Good news
Why? Well, the trading volume was largely unchanged, so the likeliest reason is that employees chose not to sell their shares in meaningful amounts.
The number of shares released is now three times the original float at IPO. So it seems like the chance of a SpaceX crash for this reason is small.
That’s one piece of good news, and the fact that company insiders want to hang on to the stock they own might be a good sign too. So where could they go from here?
One eye-catching prediction came from the analysts at Raymond James, who put an $800 price target on the stock. That would mean the share price goes up another five times and the market value hits a staggering $10trn! Too good to be true?
Artifical intelligence
Maybe not. We’re very much in new territory when it comes to the space economy. Should the launch of Starship make delivering payload into space orders of magnitude cheaper, then it isn’t crazy to think SpaceX could have a lot of growth ahead of it.
Then there’s artificial intelligence (AI) in the equation. While the space part of the business grabs most of the headlines – understandable for a company with ‘space’ in the name – it’s AI that’s set to play a bigger role, in the short term at least. The SpaceXAI division (formerly xAI) is already generating billions in sales. Some reports expect revenue to grow to $300bn or more by 2031.
If the AI revolution does change our society the way many are claiming, then SpaceX could be one of the best pure AI plays out there. Bear in mind that many other AI hyperscalers such as Meta or Alphabet are huge tech firms in their own right, with AI only a smallish part of the business.
Of course, if the AI revolution turns out to be a bit of a damp squib, then the eye-watering amounts being spent could make SpaceX a risky investment too.
Overall, I think SpaceX is worth considering. And the lack of impact from recent share unlocks bodes well for the future of the share price.
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John Fieldsend owns shares in SpaceX.
This story originally appeared on Motley Fool
