Jun 5, 2026
SpaceX is just days from what is likely to be a record-breaking IPO. The Elon Musk-headed rocket/AI company is looking to raise at least $75 billion, which would make it the largest public offering of all time, dwarfing the $22 billion raised by Alibaba in 2014.
The company has set a valuation of $1.77 trillion, which would make it the seventh-biggest company in the US, topping Tesla. Not everyone agrees with that valuation, however, including one prominent Wall Street firm.
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Morningstar analyst Nicolas Owens says his fair value estimate of the company’s worth is roughly $780 billion, less than half of what the company is targeting. The Starlink satellite business, he wrote in a report, is worth about $611 billion in enterprise value, with another $170 billion in “probability-weighted scenarios” for the company’s AI operations.
That’s a bit of a slap to xAI’s standing in the AI race and it also serves as a warning to potential investors to steer clear of the stock when it begins trading, though Owens says he believes the time will come to buy.
“We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO,” he wrote.
Morningstar isn’t alone
Morningstar is the most prominent skeptic to emerge surrounding SpaceX’s IPO plans, but hardly the only one. Ed Elson, an analyst who also co-hosts the Prof G Markets podcast with entrepreneur Scott Galloway, shredded the company’s S-1 filing, calling SpaceX a “trainwreck” and saying the filing was “unserious, empty, hallucinatory, and borderline dishonest.”
Elson took particular offense at the valuation, saying it defied all logic.
“The stock is set to be priced at 107 times sales, which would make it one of the most expensive stocks in history,” he said. “It will be twice as valuable [as] Walmart while generating less revenue than Macy’s.”
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SpaceX, in its S-1 filing, wrote it has “a history of net losses and may not achieve profitability in the future.” The filing contained 38 pages of risk factors.
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The moonshot case
Morningstar’s Owens allows for the possibility of a $1.3 trillion valuation, but says he only gives the company a 7% chance of achieving that. In that scenario, SpaceX succeeds in its plan to place data centers in space.
Should it fail to do that, something Morningstar says has a 43% probability of happening, it would destroy over $81 billion in value, says Owens.
Owens also cited governance concerns, pointing to Musk’s iron grip on the company, as he will retain 85% of the voting control.
“We think long-term investors eager to participate in SpaceX’s future endeavors and potential success will have opportunities to do so with more margin of safety than the initial offering is likely to provide,” Owens wrote.
Employee sales of the company’s stock might present those opportunities. SpaceX will allow insiders to sell portions of their stock before the traditional 180 lockup. Some will be able to sell shares as early as July, following its first earnings report as a public company.
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Chris Morris is a veteran journalist with more than 35 years of experience at many of the internet's biggest news outlets. In addition to his activities as a writer, reporter and editor, Chris is also a frequent panel moderator and speaker at major conferences, including CES and South by Southwest.
