SpaceX Could Weather a Recession. But Its Stock Might Not. Here's Why.
2026-10-25 15:45
•Lawrence Nga •The Motley Fool
••••• • Axe Cap view
SpaceX’s Strong Business Doesn’t Guarantee Stock Strength
SpaceX’s solid fundamentals clash with its lofty valuation, risking share price falls despite operational growth.
SpaceX benefits from steady Starlink revenue, a bulging cash reserve, and a strategic foothold in AI infrastructure. That should help it weather a downturn better than most. Yet, the stock trades at an eye-watering 64 times sales, a multiple that leaves little room for error. If the global recession reduces risk appetite, even a growing SpaceX can see its share price punished. South African investors should watch USD/ZAR closely as a proxy; a weaker rand could magnify dollar-based losses for local holders. While SpaceX’s fundamentals are solid, the market’s love affair with growth stocks may fade fast, especially with expensive AI bets that might not deliver. Buy purely on business strength? Yes. Hold if already invested? Maybe trim. Wait on new exposure until valuations come back to earth. this is just our opinion and not financial advice
Trim SpaceX-related exposure where possible, especially on valuation grounds. Watch USD/ZAR for entry points if a significant correction happens. Focus on companies with more reasonable local valuations and clear dividend streams.
- SPCX
- USD/ZAR
- Prolonged global recession reducing risk appetite for growth stocks
- AI-related capital expenditure failing to produce expected gains
6/10
While SpaceX's business fundamentals are strong with recurring Starlink revenue, rapid AI growth, and substantial cash reserves, the article warns that the stock could still decline during a recession due to its extremely high valuation (64x price-to-sales ratio). Even if the company performs well operationally, investor sentiment shifts and reduced appetite for growth stocks could cause share prices to fall significantly.
Our take is based on reporting first published by The Motley Fool.