Elon Musk's SpaceX is gearing up for what could be the largest initial public offering in U.S. history, with a target valuation of $1.75 trillion to $2 trillion and a planned listing as early as late June 2026. The company confidentially filed with the Securities and Exchange Commission (SEC) in April and is expected to offer roughly $75 billion worth of shares to the public. The excitement is real — but so is the skepticism on Wall Street.

The Bull Case: SpaceX Controls the Rails to Space

Supporters argue that SpaceX is far more than a rocket company. "SpaceX controls the rails and controls access to orbit," said Chad Anderson, CEO of Space Capital, an investment firm already holding a stake in the company. Bulls point to three interconnected revenue engines: space launch services, Starlink satellite internet, and an emerging AI and data infrastructure division — now supercharged after SpaceX absorbed Musk's xAI company in February 2026. If Starlink can become the dominant low-cost internet provider for underserved global markets, analysts say the revenue potential is enormous. Musk himself has cast the company's ambition in cosmic terms: "I need to make sure SpaceX stays focused on making life multiplanetary and extending consciousness to the stars," he wrote on X in March.

The Bear Case: The Numbers Don't Add Up

Skeptics, however, are pumping the brakes hard. SpaceX recorded $18.5 billion in sales last year — meaning the proposed IPO price asks investors to value the company at nearly 100 times annual revenue. For context, Apple trades at roughly 11 times revenue, and Nvidia — the AI era's standout performer — at around 25 times. Aswath Damodaran, NYU's renowned "Dean of Valuation," ran the numbers independently and arrived at a $1.22 trillion fair value — a significant discount to the $1.75 trillion target. His model projects SpaceX's blended revenue across all businesses eventually reaching $320 billion with operating margins near 50%, but only under optimistic assumptions. For investors who want to dig into Damodaran's full methodology, his analysis is publicly available at NYU Stern School of Business.

Jay Ritter, an IPO expert at the University of Florida, offered a measured warning: "Lots of things have to go right in order for revenue and profits to grow to justify that valuation." Critics also flag structural concerns — thin profit margins in commercial rocket launches, uncertainty over whether space-based data centres are a viable business, and questions about whether Starlink's pricing is competitive enough to win mass-market adoption globally.

The xAI Wildcard — and the Conflict of Interest Question

When SpaceX absorbed xAI — Musk's artificial intelligence company and the owner of social network X — in February, it raised eyebrows across Wall Street. Analyst Eric Jhonsa of Dutch Asset Corporation pointed to a growing pattern: "AI startups with little or no revenue getting sky-high valuations." The merger effectively bundles Musk's social media and AI ambitions into the SpaceX IPO story, making it harder for investors to cleanly value the underlying space business. CNBC's Jim Cramer went further, warning that if SpaceX is priced at the upper end of expectations, it could create "a bubble unto its own" and trigger a wave of IPO-related selling pressure across the broader market as investors liquidate existing holdings to fund the new offering.

History Says: Be Cautious at Launch

Historical IPO data offers a sobering counterpoint to the hype. Among the 10 largest U.S. IPOs by market value, stocks declined by a median of 31% in their first year on the market — and seven of those ten underperformed the S&P 500 over the long term. That doesn't mean SpaceX will follow the same path, but it does suggest that patient investors who wait for post-IPO volatility to settle may find better entry points than those rushing in on day one. Early pre-IPO backers — including Alphabet — are expected to face lockup expirations that could add meaningful selling pressure once their shares become freely tradable, with only around 4% of total shares offered in the initial float.

The Bottom Line

The SpaceX IPO is shaping up to be one of the most consequential and contested market events of the decade. Whether it represents a once-in-a-generation investment opportunity or a valuation that defies financial gravity will depend entirely on how aggressively Starlink can scale, how quickly space-based AI infrastructure matures, and whether Elon Musk's track record of bending expectations continues to hold. One thing is certain: this is not a conventional IPO, and it should not be evaluated with conventional assumptions.