① SpaceX is expected to launch its IPO later this month, with a potential valuation of up to USD 1.75 trillion; ② Morningstar believes the company’s true valuation may be less than half of that figure, with its space launch and Starlink internet businesses forming the core pillars supporting its valuation, while its artificial intelligence segment carries significant uncertainty; ③ Morningstar advises investors to wait until a substantial volume of SpaceX shares becomes publicly traded before taking a position.
Caixin News, June 3 (Editor: Ma Lan) — Elon Musk’s aerospace and artificial intelligence company, SpaceX, is expected to conduct an unprecedented IPO later this month, with reports indicating a projected valuation of USD 1.75 trillion.
Although Wall Street has been eagerly anticipating this IPO, an increasing number of investors are beginning to question whether the company’s valuation is justified. Morningstar has stated bluntly that SpaceX’s target valuation is too high, and its actual worth could be less than half of that figure.
Morningstar analyst Nicolas Owens’ discounted cash flow model estimates SpaceX’s valuation at merely USD 780 billion, comprising USD 611 billion from its space launch and Starlink internet businesses and approximately USD 170 billion from its artificial intelligence operations.
In short: investors should not buy SpaceX stock at its IPO price.
The IPO Is Not a Good Entry Point
Morningstar’s valuation of SpaceX is primarily based on the strong performance of its launch and connectivity businesses. Owens noted that SpaceX accounted for 83% of all orbital satellite launches in 2025 and reduced the cost per launch by more than 95%.
Starlink, meanwhile, is viewed as the company’s primary near-term cash flow engine, with projected 2025 revenue growth of 50%, reaching USD 11.3 billion, and operating profit exceeding USD 4.4 billion.
However, Morningstar considers SpaceX’s economic moat relatively narrow. Although the company holds a cost advantage in reusable rockets and has deployed Starlink on a massive scale, its artificial intelligence business drags down overall performance. The prospects and objectives of this segment—including orbital data centers—carry substantial uncertainty.
Regarding orbital data centers, Morningstar outlined three modeled scenarios. In the most optimistic case, SpaceX could capture a USD 1.3 trillion market with a 7% probability of success; however, in the worst-case scenario, it would incur losses exceeding USD 81 billion—a complete failure with a 43% likelihood.
Meanwhile, Morningstar also expressed significant concerns regarding SpaceX’s equity structure and governance model, such as Elon Musk’s expected acquisition of 85% voting control through a dual-class share structure, as well as speculation surrounding a potential merger between SpaceX and Tesla.
However, Morningstar also believes that SpaceX shares will remain resilient in the short term following their listing, citing a limited initial offering size, strong investor demand for artificial intelligence infrastructure, and the fact that the stock will be eligible for inclusion in the Nasdaq-100 Index just 15 trading days after its IPO.
However, Owens recommends waiting until after the lock-up period for private investors expires before trading SpaceX shares, as increased selling pressure at that time would drive the stock price back to a more reasonable valuation range, offering investors a greater margin of safety than at the IPO.