Why SpaceX Embodies Today’s Biggest Investing Risks
The aerospace giant stands out as both a sell and a cautionary tale for investors.
On the Oct. 5, 2026, episode of The Morning Filter podcast, hosts Susan Dziubinski and Morningstar Chief US Market Strategist Dave Sekera discuss why he thinks SpaceX SPCX stock is a sell. Here is an excerpt from the show.
Why SpaceX Stock Is a Sell
Susan Dziubinski: All right, time for our stock picks portion of the program. Because it’s a new month, Dave has brought us three stocks to sell and three stocks to buy in October. We’ll start with Dave sells this week, and the first stock to sell is SpaceX. Morningstar awards SpaceX a narrow
David Sekera: It is based on valuation, but there is more to it as well. And I’m already prepared for the amount of hate mail I’m going to get for talking about SpaceX being a sell. But when I think about the investing environment today that we talked about at the beginning of the podcast, this one in my mind is kind of emblematic of everything that you really want to be avoiding in today’s environment.
Now, I talked about how you want to steer clear of those stocks that are going to be economically sensitive. I will admit this one is not economically sensitive per se, but when you look at the valuation and especially what the market is incorporating and where it’s trading today, the market’s incorporating the value of a lot of businesses that aren’t actually even up and running yet. Some of those businesses, which we just don’t think, using today’s technology, are anywhere near being economically viable. If any of those don’t end up coming to fruition, that’s a big hit in where that stock is compared with where it’s trading today.
Very long duration stock. I mean, the value of the stock is based on free cash flow that’s going to be far, far out into the future, past even our five-year forward forecasts, valuation just based on huge growth expectations for pretty much every part of their business. As far as free cash flow goes, I mean, according to our estimates, we think they’re going to be free cash flow negative through at least 2029, if maybe not even through 2030. So, that tells me they’re going to have to raise a lot of debt in order to be able to build the business the way they want to build the business, and may even have to raise new equity at the same point in time.
Their cost of capital—it’s just going to be increasingly more and more difficult to be able to raise that capital, and the capital they raise is just going to be increasingly more expensive as well. Plus, you still have that huge technical overhang of equity from the IPO that’s currently locked up. We have different lockup periods that are expiring over the next couple of months. There’s just going to be a lot more equity supply coming on the market.
Then lastly, one thing I don’t think people talk enough about with SpaceX and Tesla TSLA as well: You do still have a huge amount of key-man risk here. God forbid anything were to happen to Elon Musk; I think that would be a huge hit to the stock. Or if he just decides there’s something else out there he wants to spend his time on, other businesses he wants to start, other industries he wants to try and disrupt, and he’s not paying as much attention here, I think that key man risk is probably not necessarily correctly valued in this situation as well.
Subscribe to The Morning Filter on Apple Podcasts, or wherever you get your podcasts, and keep up with the latest research from hosts Susan Dziubinski and David Sekera on Morningstar.com.
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The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
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