The SpaceX IPO valuation AI pitch is at the center of what may become the largest initial public offering in history. SpaceX plans to issue 555,555,555 shares at $135 each, targeting a valuation of approximately $1.75 trillion. Moreover, Elon Musk will own roughly 42 percent of the company after the offering. Furthermore, at that valuation, Musk stands to become the world’s first trillionaire, adding to the fortune he already holds through his Tesla stake.
SpaceX is a genuine space company with a remarkable record. Since its founding in 2002, it has launched hundreds of rockets, pioneered reusable rocket components, and displaced Boeing as the primary launch supplier to the Pentagon and NASA. Moreover, last year it carried out five missions to the International Space Station. Additionally, in January 2026, SpaceX participated in the first-ever medical evacuation of an astronaut. Consequently, the company’s operational achievements are not in dispute. The question is what they are worth.
The real business behind the $1.75 trillion number
SpaceX generated $15.5 billion in revenues in 2025 across its space and Starlink connectivity businesses. Starlink now serves more than 12 million subscribers in 164 countries. Moreover, the service has proven valuable far beyond its original purpose of connecting remote communities, playing a critical role in the war in Ukraine and in natural disaster response globally. Furthermore, despite those strong revenues, capital spending on Starship and other development projects pushed the company to a net loss of nearly $5 billion for the year.
Morningstar, the financial research firm, assessed the fair value of SpaceX’s rocket launch and Starship divisions at $611 billion. That figure would rank SpaceX among the top 25 corporations globally. Moreover, it falls more than a trillion dollars short of the $1.75 trillion IPO target. Furthermore, Morningstar concluded that the company has been significantly overvalued and that investors will likely find better entry points after the listing. Consequently, the gap between independent analyst estimates and the IPO price is enormous by any standard.
How xAI and the AI pitch are supposed to close the gap
SpaceX acquired xAI in February 2026, bringing in the owner of X, formerly Twitter, and the developer of Grok, Musk’s AI chatbot. The company now pitches itself to investors as an AI business estimating the potential AI market at $26.5 trillion, equivalent to more than 80 percent of US GDP. Moreover, Goldman Sachs, the lead underwriter for the offering, reportedly predicted that SpaceX’s AI revenues could rise more than a hundredfold over the next five years. Furthermore, that projection goes further than even Musk’s own public statements about Grok’s growth trajectory.
However, the xAI business currently generates less than a fifth of SpaceX’s total quarterly revenue. Additionally, it posted an operating loss of close to $2.5 billion in the first quarter of 2026. Consequently, the AI division’s financial performance so far does not yet support the valuation weight the IPO is asking it to carry.
Not all of SpaceX’s AI ambitions rest on Grok alone. The company has built two large data centers in Memphis, Tennessee, and recently reached agreements with both Anthropic and Google to rent computing capacity for payments reportedly totaling more than $2 billion per month combined. Moreover, SpaceX is also pitching the concept of orbital data centers, stationing computing infrastructure in space and powering it with solar energy. Furthermore, SpaceX’s own IPO prospectus acknowledged that orbital compute is an incredibly difficult challenge that would require thousands of rocket launches annually. Consequently, Morningstar placed a provisional value of only $180 billion on the AI division, bringing its total SpaceX estimate to $780 billion, still nearly a trillion dollars below the IPO target.
How the valuation compares to other major IPOs
The SpaceX IPO valuation AI narrative comes with a price multiple that is hard to justify on conventional financial grounds. The offering values SpaceX at more than 90 times its 2025 revenues. Moreover, when Google went public in 2004, it traded at roughly 10 times trailing revenues. Additionally, when Palantir listed in 2020, its revenue multiple was approximately 20. Furthermore, even Tesla’s original 2010 IPO valued the company at only around 15 times prior-year revenues. Consequently, SpaceX is asking investors to pay a premium that dwarfs every comparable tech listing in modern market history.
Musk has reserved 30 percent of the shares for retail investors rather than restricting the offering entirely to institutional buyers like pension funds. Steve Eisman, the money manager known for shorting subprime mortgage securities before the 2008 financial crisis, described the valuation as kind of crazy on his podcast. Moreover, he said the only way to justify it is for SpaceX to become a retail cult stock. Additionally, he described the IPO as a sci-fi story tailor-made for a sci-fi cult. Consequently, the retail allocation appears designed to build exactly that kind of devoted shareholder base.
Many index funds will be required to buy SpaceX shares once the company enters the Nasdaq 100 index. Moreover, the enduring loyalty of the Musk investor community creates genuine buying pressure regardless of valuation concerns. However, the New Yorker’s financial columnist John Cassidy notes that at some point gravity will assert itself. Furthermore, the recent sell-off in tech stocks may signal that the moment of reckoning is closer than the IPO hype currently suggests.
Source: The New Yorker / John Cassidy
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