Investing

SpaceX Stock: The Destiny Tech100 ETF Could Surge 100% Over the Next Year

Chris MacDonald

Published: November 20, 2024 9:29 am

Donald Trump’s recent election victory has sparked a stock market surge, with most major risk assets rising as investors look to take advantage of what can only be described as a wave of euphoria hitting the tape. From crypto to tech giants and private companies, valuations are rising. For investors in specific companies such as Elon Musk’s endeavors, these gains have been even more incredible. 

Thus, it should be no surprise to investors to see a fund like Destiny Tech100 (NYSE:DXYZ), a closed-end ETF investing in the top privately-held tech companies (including SpaceX) soar. This fund is up nearly 300% over the past month, leading many speculators to try their hand at riding this massive wave of interest in SpaceX and other ventures by buying into this fund. 

Of course, with such incredible gains comes sky-high risk, and this is one ETF that’s far from diversified with the typical low-volatility metrics that are typically assigned to most exchange traded funds. Let’s dive into why this ETF has soared in the fashion it has, and why another double-up from here could certainly be in order over the next year.

Key Points About This Article:

• The Destiny Tech100 ETF is among the most volatile ETFs I’ve come across, but it’s also been among the biggest gainers over the past month, for good reason.
• Let’s dive into what drove this rally, and why there’s a clear bullish thesis behind why this ETF could double from here over the next year.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

This ETF Is Gaining Traction Via the Election

Given the fact that high-growth private tech companies like SpaceX and OpenAI are the top holdings in the Destiny Tech100 ETF, it should be no surprise that this ETF has skyrocketed in recent weeks. 

The re-election of Donald Trump has placed Elon Musk as a key potential player in at least advising the president. One can argue that Musk’s presence on the campaign trail is one of the key reasons why Trump won his re-election bid. Whether there’s going to be some tit-for-tat or not really isn’t the question, it’s how much. And given the sheer size of the government contracts SpaceX has secured, this relationship is clearly beneficial for Musk’s private company (and his other publicly-traded offerings as well).

Nothing has officially been announced since the election win, but I wouldn’t be surprised to see increased news flow come on the horizon. The market certainly expects to see some announcements forthcoming. And given the fact that SpaceX is privately-held, shares are hard to come by, and marks are typically only taken during financing rounds, this is an inherently difficult position to value. Thus, this ETF is likely to remain volatile for some time, so as long as the momentum is clearly to the upside, I see no reason why DXYZ can’t double again from here.

What Makes This ETF a Compelling Buy?

DXYZ is a stock to consider in the next couple of months, primarily due to its strategic investments in high-growth technology companies, and its favorable positioning in the evolving landscape of the space industry.

SpaceX is a holding most investors want to get their hands on. The sheer amount of demand for shares of this stock has led to a massive gap between what most finance experts believe the shares are worth and what they implicitly trade at via this ETF and other funds that hold shares.

The fund is structured as a closed-end management investment company that focuses on private technology firms. With notable holdings including SpaceX, OpenAI, and Epic Games. Recently, investors gain entrance to a rather exclusive club by becoming owners of the DXYZ ETF. Indeed, there’s a certain cachet to being an investor in such a fund, and there’s a reason for this premium.

Of course, I think there’s always room to look at any investment through a skeptical lens. I don’t think this ETF can trade at these levels forever. But for investors looking for a double-up opportunity, there are few investments I can put out there with the potential for such gains over a short period of time as this fund. It’s just an investment I think those considering putting capital toward need to be very careful with managing (in terms of time horizon and target return).

A Double Up Is Certainly a Possibility

Analysts speculate that if the current trend continues, there is a possibility for the ETF to double in value over the next year. I’m in this camp.

Again, I want to reiterate that this ETF is by no means diversified or low-risk. Making an investment in DXYZ is making a bet that the already-frothy demand for SpaceX and other high-growth privately-held tech companies will grow even more insane. At this point in time, that looks like the likely outcome, but nothing is certain.

I’m steering clear of this ETF personally, but it’s going to be one I’m going to follow closely.