Jul 10, 2026
For Jeremy Grantham, SpaceX’s IPO will go down in history for all the wrong reasons. He claims it’s “the craziest IPO in the history of man.”
In a recent interview with Morningstar, the founder of Grantham, Mayo, Van Otterloo & Company (GMO), who is known as a “permabear” because of his perennially gloomy outlook on the market, blasted the valuation for Elon Musk’s rocket company.
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“In 50 years, they’ll be telling and writing stories about SpaceX, and they’ll be quoting you paragraphs from the prospectus, and you will be laughing at it,” he said.
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The prospectus Grantham is referring to is SpaceX’s S-1 filing, which featured multiple page-length rocket ship pics and lofty business ambitions like space tourism and asteroid mining.
But it isn’t so much these sci-fi-sounding revenue sources that have Jeremy Grantham giggling. Grantham focused much of his criticism on SpaceX’s AI division, including xAI and X (formerly Twitter), which he considers “third-rate” compared to behemoths like Anthropic and OpenAI.
Interestingly, a massive collapse in SpaceX’s stock isn’t the scariest scenario in Grantham’s mind. He admitted that he’s quite fearful of a future in which he’s proven wrong and AI becomes so powerful that it creates a high-tech dystopia.
Grantham told Morningstar, “If AI is actually going to be so good that the $1.7 trillion is cheap, and the AI will be so powerful that our lives will be clearly at very severe risk, I wouldn’t wish it on our species at all.”
On June 12, SpaceX shares initially rose from the starting price of $135 to about $160 per share. Although the stock briefly broke $200 a few days after IPO, it’s currently trading around the $150 mark.
Nasdaq fast-track brings in fast cash
Even though Grantham said he’s “90%” certain of a crash for SpaceX shares, he didn’t rule out the possibility of price appreciation in the near-term. In Grantham’s view, new indexing rules rather than intergalactic revenue sources could propel SpaceX higher.
On July 7, SpaceX joined the tech-heavy Nasdaq-100 index thanks to recent preferential “fast-track” rule changes. According to Reuters, JPMorgan said this official status alone could bring in $4.3 billion as massive funds become forced buyers.
Grantham said that putting SpaceX in the Nasdaq-100 means “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 even conceded that “It’s hard to imagine the price won’t go up, and perhaps it will go up a lot” due to this market dynamic.
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But that still doesn’t mean Grantham believes SpaceX is a smart long-term investment. Even though he sees potential for short-term price pumps, he ultimately believes it will come down hard when the reality of its negative earnings and massive AI spend become too much to bear.
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Some banks say SpaceX is a ‘buy’ — for now
Grantham may be doom and gloom on SpaceX’s prospects, but not all Wall Street firms are so pessimistic.
Adam Jonas, the head of Morgan Stanley’s Global Auto & Shared Mobility Research, recently became one of the most bullish analysts on record, initiating SpaceX as an “overweight” position with a $300 target price.
Although other firms don’t see SpaceX flying that high, many see potential for profits. Goldman Sachs, JPMorgan, and Bernstein, have buy ratings with targets of $205, $225, and $239, respectively, according to Yahoo Finance reporting.
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And there has been some positive news to support this bullishness. For instance, CNBC reported on a deal between SpaceX and Google’s parent Alphabet. Alphabet will pay nearly $1 billion per month to rent computing power from SpaceX.
Elon Musk also appears confident he’ll reach $1 trillion in revenue by 2030, according to Reuters.
But even with all of these positive ratings, analysts are quick to caution that a lot has to go right for SpaceX to reach its milestones.
In fact, as MarketWatch reported, Morgan Stanley’s own analysis suggests SpaceX probably won’t be cash flow positive until 2035.
As Adam Jonas cautioned in his CNBC interview, “For folks that are used to Tesla, it’s going to be a volatile ride. And it’s up to investors to decide whether the juice is worth the squeeze.”
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Eric Esposito is a freelance contributor on MoneyWise who loves making financial topics accessible and understandable to readers. In addition to MoneyWise, Eric’s work can be found in publications such as WallStreetZen and CoinDesk.
