by

June 11, 2026

No comments

7 minutes

Read Time

World

Elon Musk’s SpaceX IPO: Is it worth the hype?

SpaceX’s IPO, set to be the largest ever, would also propel Musk to become the world’s first trillionaire.

New: You can now listen to articles.

This audio is generated by an AI tool.

Chelsea Ong

Read a summary of this article on FAST.

Get bite-sized news via a new
cards interface. Give it a try.

Click here to return to FAST
Tap here to return to FAST

FAST

Elon Musk’s space exploration company SpaceX is finally set to make its long-awaited debut on the public market – a listing that has generated enormous hype and equally intense scrutiny.

Slated for Friday (Jun 12), the initial public offering (IPO) is poised to be the largest in history. It could also propel Musk, already the world’s richest person, to become the world’s first trillionaire.

Investor demand has been overwhelming.

The offering is nearly four times oversubscribed, drawing more than US$250 billion in orders, sources told Reuters on Tuesday.

Guess Word
Crack the word, one row at a time

Buzzword
Create words using the given letters

Mini Sudoku
Tiny puzzle, mighty brain teaser

Mini Crossword
Small grid, big challenge

Word Search
Spot as many words as you can

Show Less

Yet beneath the frenzy, questions are mounting over whether the company’s eye-watering valuation can be justified. Despite its dominance in the space industry, SpaceX reported a net loss in 2025 and in the first quarter of 2026.

RECORD-BREAKING IPO

SpaceX is aiming to raise a historic US$75 billion, valuing the company at about US$1.8 trillion. That would dwarf the current IPO record of US$25.6 billion set by Saudi Aramco.

The company plans to sell more than 555 million shares at US$135 each, according to filings with the US Securities and Exchange Commission.

Musk has framed the listing as a necessary step to fund expansion.

“We’re embarking on a massive new growth phase, and we need capital for that,” he said.

But some analysts are wary.

“What is unusual about SpaceX is the scale of the enthusiasm and the fact that such a large and influential company has remained private for so long,” said Ludovic Phalippou, a professor at the University of Oxford’s Said Business School.

Similarly, Jason Pride, chief of investment strategy and research at Glenmede, questioned whether the enthusiasm around the IPO was an indication of market froth.

BETTING ON MUSK

For many investors, buying into SpaceX is as much a bet on Musk as it is on the company itself.

His track record – building Tesla and SpaceX into global powerhouses – has cemented his reputation as a visionary who can spot and capitalise on technological shifts.

SpaceX’s IPO effectively asks investors to buy into that vision of an industrial ecosystem spanning rockets, satellite communications and artificial intelligence, each reinforcing the other.

John Plassard, head of investment strategy at Swiss-based wealth manager Cité Gestion, a Tesla shareholder, said he would be willing to pay a 20 per cent to 30 per cent premium for a well-run Musk company over comparable peers – a reflection of that confidence.

A sign at SpaceX’s launchpad ahead of the company’s initial public offering (IPO), in Starbase, Texas, US, on May 18, 2026. (File photo: Reuters/Gabriel V. Cardenas)

AI PLAYS A KEY ROLE

While best known for its rockets, SpaceX is increasingly positioning artificial intelligence as central to its growth story.

The company is banking on space-based AI computing infrastructure to play a key role in its long-term growth pitch to investors.

In its IPO filing, the company claims to be “the only company with a commercially viable path to building orbital AI compute at scale”. It also said it sees potential revenue from AI of up to US$26.5 trillion.

The problem is that the technology is not possible yet.

SpaceX aims to begin initial demonstrations of space-based AI computing infrastructure by late 2027, Reuters reported.

But Starship – the rocket that underpins the company’s plans for orbital computing – remains years behind Musk’s original targets and has yet to demonstrate the rapid reusability needed to make large-scale deployment economically viable.

Even so, some are optimistic about SpaceX’s ability to accomplish its AI goals.

“I think that orbital data centres, while a difficult problem, have some bounds on it, which to me gives greater confidence that the timelines laid out will be hit,” said Michael Monaghan, partner and portfolio manager at Founder ETFs.

Goldman Sachs also expects revenue from SpaceX’s AI division to surge to US$322 billion by 2030, up from US$3.2 billion, Reuters reported, citing the Financial Times.

Research firm Morningstar, in response to CNA’s queries, pointed to its Jun 1 analysis, which showed key profit drivers to watch, including utilisation of xAI’s terrestrial data centres – Colossus I and II – as well as progress toward space-based infrastructure.

These factors would represent capacity expansion for SpaceX’s AI business and the ability to commercialise it, the firm’s analysts added.

IS SPACEX WORTH THE PRICE?

While Musk fans believe that his track record makes buying into the IPO a no-brainer, some analysts argue that its high valuation at makes the risk too high.

“Its fundamentals are really tough. If there weren’t lofty expectations, there wouldn’t be an IPO here,” said Ed O’Gorman, CEO at River Wealth Advisors, which has invested in Tesla.

The company’s US$1.8 trillion valuation is widely seen as far from the reality of SpaceX’s current business.

Morningstar analysts value the company at about US$780 billion – less than half its IPO target – and estimate a fair value of US$63 per share, a 53 per cent discount to the offering price.

The gap underscores how much of SpaceX’s valuation rests not on current performance, but on faith in Musk’s long-term vision – from Mars colonisation to orbital data centres.

The scepticism toward SpaceX suggests that even Musk’s star power may not be enough to overcome concerns about its price tag that assumes years of rapid growth and flawless execution.

“A lot of things have to go right in order to justify the US$1.8 trillion valuation,” said Jay Ritter, director of the IPO initiative at the University of Florida, in response to CNA’s queries.

“At too high a price, a great company might not be a great investment,” he told CNA.

WHAT ARE THE RISKS?

The main risk is that SpaceX may not grow fast enough to justify its valuation.

The company has been loss-making so far – reporting a net loss of US$4.9 billion in 2025, and another US$4.3 billion in the first quarter of 2026.

SpaceX also said in its IPO prospectus it does not expect to be profitable any time soon.

To justify its valuation, SpaceX must grow its revenues enormously and have large profit margins, Prof Ritter told CNA.

While he acknowledged Starlink’s service would probably grow and be a big future source of profits, he noted that SpaceX’s other goals were a different matter.

“Putting data centres into space is subject to a lot of uncertainties about whether this can be done,” he added.

“And sending people to Mars is unlikely to be profitable,” Prof Ritter said.

Morningstar gave SpaceX a “very high” uncertainty rating based on the company’s future financial outcomes.

It flagged substantial risk areas, including strategic execution, technological evolution and AI buildout.

Potential future revenue streams, such as orbital data centres, as well as Starlink’s long-term scalability, face significant technological uncertainties, Morningstar noted.

Long-term investors looking for a safer risk margin could wait out the hype, according to Morningstar’s analysts.

While there may be strong investor demand immediately after SpaceX’s IPO, the stock could face downward pressure in the following months as early investors and employees become eligible to sell their shares, they noted.

This could give long-term investors the chance to buy the shares at a lower-risk price, the analysts said.

Source: CNA/co(rj)

Inbox