SpaceX (SPCX) targets $1.75tn in record IPO, but Morningstar pegs fair value at $780bn

Space Exploration Technologies Corp (SpaceX), the rocket, satellite, and artificial intelligence company set to list under the ticker SPCX, has firmed up the terms of what would be the largest initial public offering in history, and a sharp valuation debate has erupted on the eve of its roadshow. According to a Reuters report, SpaceX plans to sell roughly 555.6 million shares at a fixed price of 135 dollars each to raise 75 billion dollars at a valuation near 1.75 trillion dollars, with the marketing tour beginning Thursday and a Nasdaq debut expected around June 12. The offering is structured unusually, with a price set before the roadshow and proceeds going entirely to the company rather than existing shareholders. Yet just as the deal crystallized, research firm Morningstar initiated coverage with a fair value estimate of only 780 billion dollars, less than half the target, calling the company significantly overvalued and advising investors to wait for a post-listing pullback. The gap between the asking price and the skeptics, set against bullish projections from others, frames the central question of the most consequential listing in years.

What are the final terms of SpaceX’s record $75 billion IPO at $135 a share?

The structure is as notable as the size. SpaceX intends to price its shares at a fixed 135 dollars before the roadshow even begins, a departure from the standard practice of setting a range and letting investor demand determine the final price. Selling 555.6 million shares at that level would raise a record 75 billion dollars and value the company at roughly 1.75 trillion dollars, eclipsing every prior IPO.

The offering is designed to fund the company rather than cash out insiders. It is structured as an all-primary offering, meaning the proceeds flow to SpaceX to expand its artificial intelligence computing resources and its satellite network, rather than to existing shareholders selling stock. Founder Elon Musk will reportedly be subject to a 366-day lock-up, a signal that he will not sell into the listing.

The deal is built to capture broad demand. A consortium including Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JPMorgan is leading the offering, and SpaceX is reportedly allocating as much as 30 percent to individual investors, an unusually large retail tranche aimed at Musk’s substantial following. Prediction market odds currently imply a strong likelihood that the company debuts above a 1.8 trillion dollar market value, suggesting the market expects a first-day pop beyond the IPO price.

Why does Morningstar value SpaceX at $780 billion, less than half the IPO target?

Morningstar’s verdict is blunt and timely. The firm initiated coverage with a fair value estimate of 780 billion dollars, roughly 55 percent below the 1.75 trillion dollar target, with analyst Nicolas Owens writing that the company has been significantly overvalued and that investors will have opportunities to buy at more attractive levels after the IPO. The note effectively tells buyers to wait.

The valuation math underpins the skepticism. At a 1.75 trillion dollar valuation against 2025 revenue of 18.67 billion dollars, SpaceX would trade at roughly 94 times trailing revenue, a multiple Owens described as requiring flawless execution from a company that is currently posting net losses. For comparison, Nvidia, one of the most profitable technology companies in the world, trades at around 22 times trailing revenue.

The concern centers on unproven future markets. Morningstar argues that much of SpaceX’s valuation rests on dominating technologies and markets that do not yet exist at scale, from a vastly expanded satellite network to space-based AI infrastructure. Stripping out speculative future value and focusing on the proven businesses, primarily Starlink, produces a figure far below the asking price, which is the core of the bear case.

How does the xAI merger weigh on SpaceX’s valuation and AI credibility?

The xAI combination is a focal point of the debate. SpaceX merged with Musk’s artificial intelligence startup xAI earlier in 2026 in an all-stock deal that valued the rocket company at around 1 trillion dollars and the developer of the Grok chatbot at roughly 250 billion dollars, transforming SpaceX into a conglomerate spanning rockets, satellites, and AI.

Morningstar views the AI unit as a liability rather than an asset at current prices. The firm flagged xAI as posing a material threat of value destruction, noting that its competitive position relative to rivals including OpenAI and Anthropic leaves its economic moat indeterminate, and Owens stated plainly that the team does not regard Grok as one of the leading AI labs today. The unit is also projected to burn roughly 10 billion dollars in 2026.

This reframes part of the valuation as a bet on catching up. Bulls see optionality in pairing SpaceX’s infrastructure with a frontier AI ambition, while skeptics see a deeply unprofitable AI business diluting the quality of a strong space and satellite franchise. The disagreement over xAI’s worth accounts for a meaningful share of the gap between the bullish and bearish valuations.

Why are ARK and prediction markets so much more bullish than Morningstar?

The optimistic camp sees a multi-year growth trajectory. ARK Invest, led by Cathie Wood, projects that SpaceX could reach a 2.5 trillion dollar enterprise value by 2030, describing the 1.75 trillion dollar IPO target as grounded in a plausible trajectory for Starlink, Starship, and orbital AI combined. That projection implies roughly 38 percent annual growth in enterprise value from the listing.

The bull case rests on dominance and scale. Starlink is already the company’s primary profit generator with millions of subscribers, Starship promises to slash launch costs and enable far larger payloads, and the satellite and government businesses give SpaceX entrenched, high-barrier revenue. Optimists argue these franchises justify a premium and that the company’s lack of direct peers makes conventional multiples misleading.

Prediction markets lean toward a strong debut. Current odds imply a high probability that SpaceX opens above a 1.8 trillion dollar valuation, suggesting that demand, fueled partly by Musk’s following and the scarcity of comparable assets, will push the stock above its IPO price regardless of analyst caution. This sets up a tension between a likely near-term pop and Morningstar’s warning that the shares will eventually trade lower.

What does the unusual fixed-price, all-primary structure signal to investors?

Setting a fixed price before the roadshow is a statement of confidence. By pricing at 135 dollars in advance rather than building a range from investor feedback, SpaceX signals that it believes demand is strong enough to clear the deal without the usual price discovery, an approach that reflects both Musk’s unconventional style and the company’s leverage as a uniquely sought-after asset.

The all-primary structure aligns incentives toward growth. Because the proceeds fund the company rather than enriching selling shareholders, the offering is framed as raising capital to build, expanding AI computing and the satellite network, which supports the narrative that investors are funding future expansion rather than providing an exit for insiders. Musk’s lengthy lock-up reinforces that message.

The large retail allocation is a double-edged feature. Directing up to 30 percent to individual investors broadens ownership and taps enthusiastic demand, but it also means retail buyers could bear a significant share of any post-listing volatility. If Morningstar is right that the shares trade down after the initial surge, the investors most exposed would be those who bought into the hype at the open.

What are the key risks investors face as the SpaceX roadshow begins?

The first risk is valuation itself. At roughly 94 times revenue with the company posting losses, the IPO leaves no room for disappointment, and Morningstar’s call that fair value sits near 780 billion dollars highlights how much speculative future value is embedded. A stock priced for perfection is vulnerable to any stumble.

The second risk is the AI and execution overhang. The xAI unit’s heavy cash burn and uncertain competitive position introduce a drag on profitability and a question mark over a core part of the growth story, while SpaceX’s broader ambitions in Starship, expanded satellite capacity, and space-based computing remain unproven at the scale the valuation implies. Spaceflight and frontier AI are both unforgiving arenas.

The third risk is governance and post-listing dynamics. Musk’s dominant control means public shareholders would have limited influence, the company’s fortunes are tightly bound to one individual, and the gap between a likely first-day pop and analysts’ lower fair-value estimates creates the potential for a sharp correction once initial enthusiasm fades. None of this is investment advice, and SpaceX’s proven franchises are genuinely formidable. But the stark divide between a record 1.75 trillion dollar ask and a 780 billion dollar fair-value estimate captures the essential gamble, namely whether investors are buying a generational growth story at a fair price or paying for a future that must unfold flawlessly to justify the cost.

Key takeaways on the SpaceX IPO valuation debate

• SpaceX plans to price its IPO at a fixed 135 dollars per share, selling 555.6 million shares to raise a record 75 billion dollars at a valuation near 1.75 trillion dollars.
• The roadshow begins Thursday with a Nasdaq debut under the ticker SPCX expected around June 12, led by five major banks.
• Morningstar initiated coverage at a fair value of just 780 billion dollars, roughly 55 percent below the target, calling SpaceX significantly overvalued.
• At 1.75 trillion dollars, SpaceX would trade at about 94 times trailing revenue, versus roughly 22 times for Nvidia.
• Morningstar flagged the xAI unit as a material threat of value destruction with an indeterminate competitive moat against rivals.
• ARK Invest projects SpaceX could reach 2.5 trillion dollars in enterprise value by 2030, viewing the target as plausible.
• Prediction markets imply a high probability the stock debuts above a 1.8 trillion dollar valuation, suggesting a first-day pop.
• The all-primary structure sends proceeds to the company for AI and satellite expansion, with Musk locked up for 366 days.
• A retail allocation of up to 30 percent broadens ownership but exposes individual investors to post-listing volatility.
• The core gamble is whether SpaceX’s proven franchises justify the price or whether the valuation depends on unproven future markets.