The recent inclusion of Elon Musk’s SpaceX into the Nasdaq 100 has placed the rocket company, directly or indirectly, into the investment portfolios of millions worldwide. This development, however, has done little to sway seasoned critics like Jeremy Grantham, co-founder of investment giant GMO, who remains deeply skeptical of the company’s ambitious long-term vision. Grantham, a self-described “permabear” known for his cautious market outlook, has publicly dismissed SpaceX’s stated goal to “build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars.”
Grantham did not mince words during a recent appearance on Morningstar’s The Long View podcast, suggesting that future generations will look back at SpaceX’s prospectus with amusement. He characterized the company’s initial public offering as “the craziest IPO in the history of man,” predicting that in fifty years, people will be “laughing at it.” This perspective stands in stark contrast to the generally positive sentiment from a segment of Wall Street analysts, even as the company’s initial market performance has been somewhat subdued.
Since its launch, SpaceX has seen its share price hover around $150, a modest increase from its $135 target price and a 7% decline over the past month. Despite this, some major financial institutions maintain optimistic price targets. Morgan Stanley reportedly projects a target of $300, while Goldman Sachs analysts Eric Sheridan and his team estimate a more conservative $205. J.P. Morgan, for instance, set a target of $225, acknowledging that Elon Musk’s ambitious goal of reaching $1 trillion in revenue by 2031 is achievable, but contingent on “strong execution across an ambitious timeline.”
Analysts at J.P. Morgan, including Doug Anmuth, Seth Seifman, Sebastiano Petti, and Richard Choe, also highlighted potential governance concerns related to Musk’s singular influence. They noted that “there’s only one Elon,” pointing out his “outsized influence and control (82% voting power)” as central to SpaceX’s culture and strategy. While acknowledging his leadership as a “defining driver of the company’s success,” they also raised questions about the concentration of control and the inherent leadership-transition risk it presents.
Grantham expressed bewilderment at the bullish recommendations from Wall Street banks, suggesting that the “reality will come out” eventually. He mused that if SpaceX somehow avoids collapse, it would require “massive developments on AI that our entire lives are totally different,” leading to a potentially “strange” and “rather horrific” future where humanity might be “bossed around by our automaton friends.” He believes either outcome—collapse or a radically transformed world—would be historically significant.
The investor also pointed to Nasdaq’s recent fast-track rules for older companies joining its indexes as a factor influencing SpaceX’s current valuation. These rules, designed to better reflect the market by including large private companies that stay private for extended periods, effectively mandate that index-tracking funds purchase newly included stocks. Grantham argued that this creates an artificial demand: “What that means is there’ll be a lot of people who have to buy it for any index that is Nasdaq-y. So there’ll be much more demand than there are sellers.” He concluded that this supply and demand dynamic makes it “hard to imagine the price won’t go up, and perhaps it will go up a lot,” regardless of underlying fundamentals.
