Recently, all the news about SpaceX has been good. Almost all investment banks have come out with buy ratings. Morgan Stanley is calling for $300, Goldman Sachs, UBS, and Royal Bank of Canada are also buyers. Today, it was officially added to the Nasdaq 100 index. Just looking at this setup, you’d think it’s a no-brainer to go long on this stock.

But after all these years, the more I see a scenario where "everyone is bullish," the more I first ask: why is the money actually flooding in?
SpaceX’s recent upward movement isn’t because it suddenly became profitable; it’s because passive funds are being forced to buy. Being added to the Nasdaq 100 means all funds tracking that index must allocate to it. Just this one event is estimated to generate over $4 billion in passive buying pressure, regardless of whether it’s expensive or not—funds have to buy. Plus, the underwriting banks that just brought it public are naturally promoting their own newly issued shares; talking it up is part of their job. More critically, this time only 3% to 4% of the float was released. With such a small float, even a little passive buying can push the price up. Simply put, the current price is driven by liquidity, not by performance.
Looking back at the company itself, I really can’t make sense of its profitability. It’s losing over $4 billion per quarter and burning cash aggressively. For years to come, it will have to rely on continuous fundraising to plug the cash flow gap. If you expect this business to turn profitable anytime soon, that’s basically unrealistic. The valuation is also ridiculously high—a market cap of over $2 trillion. Some institutional models calculate its fair value at less than half of that. This kind of stock—does it have long-term vision? Yes. Is its current profitability clear? No.
And the real danger lies ahead. Right now the float is tight because most shares are still locked up—that’s exactly why it’s easy to pump. Once the lock-up expires, a large number of shares will hit the market in a sell-off. On top of that, short interest has already piled up. The higher it’s pushed now, the harder it may fall later. The same thin float that lifts you up can also bury you.
So my view is: you can make money on the short-term index inclusion wave. Follow the passive buying to go long, capture the sentiment and liquidity-driven gains. But you must understand that you’re making money on liquidity, not on the company getting better. Don’t mistake forced buying for a fundamental turnaround. For the long term, I’d rather wait until the lock-up expires, the hype dies down, and the price falls to a level I feel comfortable with—say, not far from its IPO price of $135—then enter, hold, and slowly wait for the business to actually deliver results.
This week, the market is being forced to stuff money into this stock. That’s a different matter from whether this company is worth the price.