Demand for Space Exploration Technologies Corp. (NASDAQ:SPCX) shares is surging among retail investors, but this analyst is cautioning against SpaceX’s rally, pointing towards the commercial space flight giant possibly becoming a “meme stock.”
Retail Demand Shoots Up
In a post on the social media platform X on Tuesday, The Kobeissi Letter said that since Monday, retail investors have bought as much SpaceX as “every other US single stock combined in the entire prior week.”
Retail investors bought over $93 million worth of the commercial space flight company’s stock, the post said, which accounted for “~73% of all retail single-stock purchases during the day.”
“Retail appetite for risk shows no signs of slowing,” the post said, pointing towards SpaceX retail turnover exceeding $7 million during the first 10 minutes on Monday.
SpaceX A Meme Stock?
Charlie Billelo, an executive at investment firm Creative Planning, cautioned against SpaceX’s rise while acknowledging that he has received criticism for his “cautionary” approach to SPCX. “Last time I saw this was in 2021 when I was warning about the meme stock/SPAC/ARKK manias,” he said.
‘History doesn’t repeat itself, but it often rhymes,” Bilello said, quoting an earlier post by him that showcased SpaceX surpassing Microsoft Corp‘s (NASDAQ:MSFT) and Amazon.com Inc.‘s (NASDAQ:AMZN) market capitalization.
A meme stock is a stock that gains popularity among retail investors (ordinary Americans in this case) through social media hype. GameStop Corp (NYSE:GME) is a prominent example of a meme stock.
Elon Musk’s Trillion-Dollar Run
SpaceX’s rally also resulted in Elon Musk surpassing the combined net worths of other tech billionaires like former Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) CEO Larry Page, as well as Sergey Brin, Amazon.com Inc. (NASDAQ:AMZN) founder Jeff Bezos and Oracle Corp. (NYSE:ORCL) CEO Larry Ellison.
However, not everyone has been bullish on SpaceX, with Keith Snyder, an analyst at CFRA, initiating coverage on SPCX with a Sell rating and a $115 price target, implying roughly 46% downside from current levels.
Price Action: SpaceX shares were up 2.06% to $205.95 during the after-hours session on Tuesday.
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