Morningstar Says SpaceX IPO Valuation Is More Than Double Its Fair Value
CNBC reported Wednesday that Morningstar analysts believe SpaceX’s IPO valuation is deeply inflated. The research firm places the SpaceX IPO valuation at just $780 billion, roughly 48% below the company’s private market price of $1.5 trillion and far short of the $1.75 trillion figure being targeted for its upcoming Nasdaq float.
Morningstar Flags xAI as a Major Risk
Morningstar’s skepticism centers heavily on SpaceX’s artificial intelligence unit, xAI. Analysts describe its “economic moat” as indeterminate, meaning competitive advantages are unclear. The division is seen as carrying a “material threat of value destruction” for the broader company. SpaceX’s AI arm recorded an operating loss of $2.5 billion in its most recent quarter alone. The research firm used a discounted cash flow model to arrive at the $780 billion figure. Analysts noted that the IPO period itself is unlikely to be the best entry point for individual investors.
SpaceX Financials Show a Company Still Burning Cash
The company’s latest quarterly results paint a picture of a business heavily reliant on one profitable unit. Starlink, its satellite internet service, generated $3.26 billion in quarterly revenue. That figure represented 69% of total company revenue. The space operations division posted a $619 million operating loss in the same period. SpaceX also disclosed in its S-1 filing a net loss of $4.28 billion for the quarter, following a $4.94 billion loss across full-year 2025. The company warned investors it may never reach profitability.
Context: The Largest IPO in History Would Come at a Premium
SpaceX is reportedly targeting a $75 billion fundraise through the listing, which would make it the largest initial public offering ever attempted. At a $1.75 trillion valuation, the company would trade at 67 times sales. Dan Coatsworth, head of markets at AJ Bell, told CNBC that figure is three times the sales multiple currently applied to Nvidia. That comparison underscores how richly priced the offering appears relative to established tech giants. Elon Musk holds 85% of voting rights, limiting shareholder influence over corporate decisions. Speculation has also resurfaced around a potential merger between SpaceX and Tesla.
What Morningstar Says Investors Should Do
Despite the warnings, Morningstar does not rule out a short-term price pop. A small initial float, widespread investment bank support, and fast-tracked eligibility for Nasdaq 100 inclusion could all lift the share price early on. The firm’s message is pointed but patient: those willing to wait may find better prices after initial enthusiasm fades, with greater downside protection than the IPO date offers.
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