A stock can post strong gains following an earnings release but still leave investors wishing they could have waited.
SPCX) stock showed why in October.
After reporting explosive third-quarter earnings on October 20, 2026, the stock rose nearly 8% the next day to $159.31. But by Friday, November 6, the stock had fallen back to $134.27, down 16% from its post-earnings rebound.
Additionally, the stock is 16.6% lower than SpaceX’s closing price of $160.95 on June 12 when it first went public. Of course, anyone chasing the excitement of profits has already faced painful paper losses.
Jim Cramer knows this temptation. He was impressed by SpaceX’s rapidly expanding artificial intelligence business and said he hoped to acquire a stake through a charitable trust. But on Friday’s episode of “Mad Money,” he explained why he didn’t buy them.
A lot will depend on whether investors are paying the right price for the future, especially with the stock still facing multiple uncertainties.
Jim Cramer explains why he won’t buy SpaceX stock
Jim Cramer wants to own SpaceX stock, but he just doesn’t want to buy it yet.
On November 6, the Mad Money host said the company’s stellar earnings piqued his interest in increasing his stake in the CNBC Investment Club Charitable Trust. But growth alone won’t solve his concerns.
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SpaceX expects fourth-quarter capital expenditures of $35 billion to $40 billion, nearly double Wall Street’s forecast of $20.1 billion. Building an artificial intelligence data center requires a large upfront investment that will pay off later.
“The company’s projected costs are astronomical
SpaceX also announced a financing commitment of approximately $40 billion on October 26, under which entities managed by Apollo will purchase Nvidia chips and lease them to the company.
Cramer worries that additional financing could lead to higher borrowing costs or the issuance of new shares, diluting existing investors. SpaceX’s debt-to-equity ratio, which measures debt relative to shareholder equity, is just 0.22, below the aerospace and defense industry median of 0.315, according to GuruFocus.
In addition, there is another complication. According to TechCrunch, SpaceX and Tesla have formed a special committee to explore a possible merger. No deal has been reached yet, and Cramer worries that merger uncertainty and political scrutiny could derail expansion plans.
But neither spending nor mergers are his biggest obstacles.
Cramer estimates that currently only about one-third of SpaceX’s shares are freely traded. The expiration of staggered lock-up periods by mid-2027 could allow more shareholders to sell shares, increasing potential supply even as the business continues to grow.
“I think supply may overwhelm demand in the short term
As a result, Cramer expects a better entry price eventually.
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SpaceX’s explosive artificial intelligence growth explains why Cramer wanted to join
Strong customer and earnings numbers from SpaceX underscore the bullish outlook.
The company reported third-quarter sales of $14.6 billion, a 161% year-over-year increase. Adjusted EBITDA soared 306% to $8.8 billion, and diluted earnings came to $0.35 per share. That’s huge growth for a company whose stock price has lagged.
In particular, SpaceX’s superintelligence division is leasing artificial intelligence computing power and generated sales of $7.56 billion and adjusted EBITDA of $4.95 billion. Artificial intelligence accounts for 52% of total sales and has replaced rocket launches as the financial engine of the story.
Cramer said Google pays about $920 million a month for the use of computing power, while Anthropic’s monthly contract commitments are expected to reach $3.1 billion by December.
Starlink has added another business, with 13.6 million consumer users as of the end of September, and connection revenue increased by 69%. Wireless expansion and Starship launch provide greater possibilities.
Still, Cramer noted that shares currently trade at about 16 times projected 2028 earnings. However, this will only be attractive if SpaceX can deliver on the predictions behind it.
What could convince Cramer to finally buy SpaceX stock?
Looking ahead, given the current state of the AI industry, SpaceX’s next challenge will largely depend on execution.
Specifically, the lock-up period for the stock is expected to last until mid-2027. More stocks will be eligible for sale, but not necessarily for sale, and perhaps what matters is whether demand will absorb any selling without another sharp decline.
Then there’s the expansion of artificial intelligence. SpaceX operated 1.7 gigawatts of computing power in September. Elon Musk hopes to achieve 3 GW by the end of the year and 13 GW by the end of 2027. These lofty goals need to be compared with goals related to construction progress, borrowing costs and actual cash returns.
Other tests are coming soon.
Flight 15 of the Starship program may show progress toward more frequent launches. Starlink needs to expand its 13.6 million users and convert wireless ambitions into paying customers. Additionally, any proposed Tesla merger will need clear terms, particularly how existing shareholders will be valued.
Both outcomes are reasonable. If SpaceX delivers product and the market absorbs the new float, waiting could mean missing out on gains. If spending exceeds returns or sales accelerate, Cramer may gain a better entry point.
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