Should You Buy SpaceX Stock? The FOMO Trap Explained

Matt: SpaceX is now a public company, and it didn't take long for investors to start asking the same question: Should I buy the stock?

On this week's Matt on the Money, we're looking at why this IPO is getting so much attention, even four weeks in, and how to think about a high-profile stock without letting FOMO, or fear of missing out, drive your financial decisions.

Joining us live is Dan Bennett with Lakewater Advisory. Dan, great to have you with us.

Dan: Good to be back.

Matt: What is the current status of SpaceX stock? Has it cooled off a little bit?

Dan: Yeah. Early on there was a lot of hype, especially before the IPO. Once the stock became public, that excitement continued and the stock was pushed up quite a bit. Since then, it's come back down to earth a little.

Matt: But is it still above where it opened?

Dan: No. It's just below now.

Matt: Just below. Okay. You mentioned that when SpaceX went public about four weeks ago, your phone started blowing up. What were clients asking you?

Dan: There were really a few different things coming together.

Number one, a lot of people are interested in Elon Musk and what he's doing, along with his companies, whether they like him or not.

Number two, the valuation of the company was incredibly high. Before the IPO it was valued at roughly $2 trillion, and it's still around that level now.

Number three was how quickly the stock entered the NASDAQ and became part of major market indexes.

That's something we'll talk more about in the next hour, especially what it means for 401(k) investors.

Matt: We had a graphic comparing SpaceX with some of the largest public companies in the world. What should viewers take away from that comparison?

Dan: As soon as it became public, SpaceX immediately became the sixth-largest company in the world based on market value, with roughly a $2 trillion valuation.

Nvidia was number one at around $5 trillion.

It's pretty incredible, especially when you compare that valuation to the company's revenues.

In 2025, SpaceX generated about $18 billion in revenue, and expectations for this year are around $30 billion.

Those are large numbers, but investors naturally ask what they actually mean.

Compare that with a company like Amazon, which has roughly a $2.5 trillion valuation and generates around $750 billion in annual revenue.

So when investors look at $30 billion in revenue versus a $2 trillion valuation, they're asking whether buying the stock at today's price truly makes sense.

Matt: That's a great question. How do you separate personally liking a company, believing in its future, or supporting its mission from deciding whether the stock actually belongs in your portfolio?

Dan: You can absolutely like a company, love its products, and still believe the stock is overpriced.

When you're buying a stock, you're buying its future earnings. That's where the fundamentals matter.

A good example is Disney. Almost everyone loves Disney. The parks are great, the movies are great, and the overall experience is fantastic.

Yet over the past ten years, the stock has produced annualized returns of around 1%.

Matt: For someone who's tempted to buy simply because everyone is talking about SpaceX, what question should they ask themselves before making that move?

Dan: The first question is whether it belongs in your portfolio.

Everyone's situation is different. A stock like SpaceX can have a place in a portfolio, but it shouldn't become your entire portfolio.

As a general guideline, no individual company should make up more than about 5% to 6% of your total investments.

If you want to take a small position and see how it performs, that's perfectly reasonable, as long as you're comfortable with the possibility of losses.

Matt: All that volatility.

Dan: Exactly. All the volatility.

Matt: One of the biggest takeaways here is to keep individual stocks in perspective. The more concentrated you become in a single company, the less diversified your portfolio becomes, which can make you more vulnerable to market swings.

Dan: Some people are comfortable with that level of risk, and many people are not.

Matt: That's really helpful context because this isn't simply about chasing a hot IPO. It's about making sure your overall financial plan remains stable and you're not taking on more risk than you're comfortable with.

Dan Bennett from Lakewater Advisory, thank you for joining us. Dan will be back next hour to discuss how SpaceX's addition to major market indexes could affect 401(k) investors, not just those buying the stock directly.

We'll be back with more after the break.