The Motley Fool weighs whether monthly SpaceX investing could build a million-dollar retirement

SpaceX’s debut and early trading

The Motley Fool reports that Space Exploration Technologies entered the market in June with a large initial public offering. It says the company raised $85 billion after an overallotment option was exercised, making the offering the biggest ever. The article also says SpaceX debuted with a market value above $2 trillion, which put it alongside companies such as Amazon and Nvidia, though those firms took years to reach similar valuations.

The article says investor interest was driven by SpaceX’s mix of businesses and by Elon Musk’s role at the company. Demand exceeded supply in the IPO, and the stock rose sharply in its first few days of trading. Since then, however, the article says the stock has fallen about 12% so far this year.

The businesses behind the company

The Motley Fool says SpaceX has three businesses that have attracted growth-oriented investors: space, Starlink satellite-based connectivity, and artificial intelligence, which the company calls super intelligence, or SI. The article says these units may support one another. As an example, it says the company’s reusable rockets can launch equipment for the other businesses, and that Starship recently carried satellites into space for Starlink.

According to the article, using its own capabilities can help SpaceX reduce costs and maintain more control over expansion. The Motley Fool says that kind of setup helps explain why the IPO drew so much attention from growth investors.

Growth, risks, and spending

The article says SpaceX is showing strong growth. In the third quarter, revenue in its space business rose 6%, connectivity revenue rose 69%, and SI revenue rose 829%. Total revenue climbed 161% to $14 billion, according to the article.

The Motley Fool also says SpaceX has set ambitious goals, including fully reusable rockets intended to lower launch costs and the creation of data centers in space. At the same time, the article says investors have concerns about the risks. It quotes the company’s prospectus as saying some goals depend on technologies that have not been fully developed and that certain initiatives “may not achieve commercial viability.” The article says this could hurt earnings and stock performance if that happens.

Monthly investing and retirement returns

The Motley Fool then asks whether investing $500 a month in SpaceX could help someone retire a millionaire. It says this kind of regular investing works best when an asset has clearer visibility and more predictable returns. As an example, the article cites an S&P 500 index fund and says the index has produced an average annual return of 10% over time.

The article says SpaceX is more complicated because of its combination of rapid growth and substantial risk. The Motley Fool says it expects volatility in the years ahead, at least until some of the risks ease. In that setting, the article says building a large position through regular purchases could be risky. It adds that aggressive investors in a diversified portfolio might still try it, and that if SpaceX achieves its goals, the strategy could help them retire with millions.

A lower-risk alternative

The Motley Fool says there may be a simpler and less risky way to pursue millionaire-level retirement wealth: investing in a broad range of quality stocks across industries and, potentially, adding money monthly to an S&P 500 index fund while holding it for the long term.