SpaceX IPO: 3 Things Need to Go Right for Investors to Profit

As high-profile debuts go, SpaceX (NASDAQ: SPCX) will likely win hands down. The rocket maker is set to go public on Friday in what promises to be the largest initial public offering (IPO) in stock market history. Space Exploration Technologies Corp. (aka SpaceX) will begin trading on the Nasdaq exchange using the ticker symbol "SPCX."

The expanding space economy, recent voyages beyond the moon, and the potential to get in on the ground floor of likely the biggest public debut in history have whipped the hype cycle into overdrive. As a result, many investors plan to lay out their hard-earned cash as soon as the stock begins trading. While there are plenty of reasons to be bullish, a number of challenges lie ahead that will determine whether SpaceX turns out to be a profitable investment for those who take the plunge on Friday.

Let's take a look to see what's on the horizon.

Image source: Getty Images.

To infinity and beyond

Before we address the conditions that will make this debut profitable for investors, it's worth reviewing several things that make this IPO unique.

SpaceX has already priced its offering at $135 per share and plans to sell more than 555.5 million shares, raising roughly $75 billion, thereby making it the biggest IPO in history. That would put its valuation at roughly $1.77 trillion, making SpaceX the world's seventh- or eighth-most-valuable company.

Another notable thing about the company is its financial results. In 2025, SpaceX generated revenue of $18.7 billion, up 33% year over year, but recorded a net loss of $4.9 billion under Generally Accepted Accounting Principles (GAAP). This resulted in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $6.6 billion. Most start-ups aren't yet profitable when they go public, even on an adjusted basis, so this too makes SpaceX unique.

Big Assumptions

For investors planning to invest in the SpaceX IPO, be warned: There are several things that will have to go right down the road in order for SpaceX to be a profitable investment.

The company's connectivity segment, which includes its Starlink satellite internet and mobile connectivity business, is doing the heavy lifting right now. In 2025, the segment generated revenue of $11.4 billion, up 50% year over year, resulting in operating income of $4.4 billion, up 120%.

SpaceX's successful rocket launches have given it an edge in the commercial satellite business, but the competition is coming. Amazon's Project Leo (formerly Project Kuiper) plans to deploy thousands of satellites into orbit over the next few years, increasing competition and potentially cutting into Starlink's market share.

Then there's the company's space segment, which makes most of the headlines. Despite SpaceX's pioneering use of reusable rockets and track record of successful missions, the business isn't yet profitable. In 2025, the space segment generated revenue of $4.1 billion, up 8% year over year, but generated an operating loss of $657 million, due to heavy spending on research and development (R&D).

The competition is likely to increase for the space segment as well. Jeff Bezos' privately held Blue Origin and Rocket Lab are the company's most direct competitors and are ramping up their rocket development and launch capabilities. SpaceX's space segment faces the challenge of generating profits while fending off the growing competition.

Last, but certainly not least, is the company's artificial intelligence (AI) segment. Elon Musk rolled his xAI business into SpaceX earlier this year as part of his ambitious plans to launch space-based data centers. In 2025, the AI segment generated revenue of $3.2 billion, up 22% year over year, but heavy R&D spending resulted in an operating loss of $6.3 billion.

The segment's outlook has improved dramatically since its initial IPO filing. Last week, SpaceX announced that it had reached an agreement with Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) to supply the company with computing capacity from its xAI supercomputer. In return, the Google-parent will pay $920 million per month between Oct. 2026 and June 2029. SpaceX inked a similar deal with Anthropic, worth $1.25 billion per month.

Those two deals alone add $26 billion in annual revenue, reducing SpaceX's valuation from nearly 100 times sales to about 40, making it a much more appealing -- but still pricey -- investment.

Will SpaceX be a profitable IPO investment?

Investors who buy SpaceX on IPO day are taking several things on faith. History is rife with examples of high-profile stocks falling flat after their public offerings. That reality aside -- and as I've outlined above -- three other things will have to go right for the stock to be successful over the long term.

First, Starlink will need to continue ramping up its broadband satellite business while fending off competition. Second, the space business will need to generate long-term profits -- though the use of reusable rockets increases that likelihood. Finally, xAI will need to continue selling off excess data center computing capacity until Elon Musk's dream of solar-powered orbital data centers becomes a reality -- which is likely still a ways off.

If SpaceX can continue to increase its revenue while improving its profit picture, it could conceivably be a profitable investment for those who buy on IPO day. However, as I've pointed out before, history illustrates that most IPO stocks are extremely volatile and are significantly underwater at some point during their first year of trading -- and I predict that SpaceX will be no different.

Forewarned is forearmed.

Danny Vena, CPA has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Rocket Lab. The Motley Fool has a disclosure policy.