SpaceX (SPCX US) $US160.95

On the first day SpaceX shares jumped as much as +31% above their initial offer US$135 price, before ending the day up +19% at US$160.95. By the close, SpaceX ranked as the sixth-largest listed company globally, eclipsing Tesla’s ~US$1.5 trillion valuation. Yet Tesla still holds the edge when it comes to IPO-day performance, with the stock rallying more than 40% on its debut in 2010. However, with SpaceX now publicly available, the company and its broad coverage, from artificial intelligence to space travel, have afforded Musk disciples an arguably more attractive alternative at a time when Tesla is being weighed down by struggling car sales.

We know subscribers are keen for our view on SpaceX and this can be best split in two halves:

• Short-term the stock should be well supported as Fund Managers and ETFs will be forced to accumulate the stock.
• From a valuation perspective it’s very hard and MM is unlikely to buy the stock in 2026.

While Tesla has been relegated to the stalls by SpaceX, at least for now, investors shouldn’t forget how much volatility comes with these sorts of investments. Over the last 5-years, Tesla has experienced corrections of 32%, 54%, 56%, and 75%, i.e. it’s not been for the fainthearted.

• We believe demand for the stock should keep it at a healthy premium to its IPO price in the short term, but earnings will be required in the years ahead.