The SpaceX IPO Is Days Away. Here's How to Prepare.

After months of speculation, the SpaceX IPO is finally upon us. On June 12, the company intends to go public at a $1.77 trillion valuation, raising as much as $75 billion in capital. If that valuation is reached, the company would be worth more than Tesla -- another Musk-led business -- from its first day of trading.

Expect SpaceX to put its new cash hoard to work almost immediately. "We believe we have identified the largest actionable total addressable market in human history," the company says in its IPO prospectus. "We estimate that our quantifiable TAM is $28.5 trillion."

There are ways to buy SpaceX stock before the IPO. Of course, the simplest way to gain exposure is simply to wait until shares become publicly available. In either case, you'll want to prepare for a variety of potential scenarios once SpaceX stock goes public. In fact, a growing number of experts are warning that one scenario in particular may be likely to occur. Prepared investors will have the best chance to profit.

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Here's how to prepare for the coming SpaceX IPO

SpaceX is undeniably an incredible business. The company has single-handedly shifted the paradigm for getting a payload to space.

"Space travel is becoming cheaper than ever, and it's changing everything," observes one industry report. "Back in 2020, launching a Falcon 9 rocket cost around $62 million. This was already a big improvement compared to older rockets that cost over $100 million per launch. SpaceX made this price possible by developing reusable boosters, which helped reduce manufacturing and operational costs."

SpaceX's Starship megarocket is significantly larger than its legacy Falcon 9 platform. It's nearly twice as tall, three times as wide, and nine times heavier. Yet SpaceX hopes to bring launch costs of the Starship rocket down to just $10 million.

Dramatically lower launch costs have already helped SpaceX scale complementary businesses, like its Starlink internet service -- currently its only profitable division.

But it won't be rockets and Starlink that determine whether SpaceX's $1.77 trillion initial valuation is justified. That's because $26.5 trillion of SpaceX's claimed $28.5 trillion total addressable market is not in rockets and broadband, but in artificial intelligence.

This is perhaps the most important way to prepare for the upcoming SpaceX IPO: determine how promising you believe SpaceX's AI division is. Experts are split. "We ​don't see Grok as one of the leading AI labs today," concludes one analyst, referring to SpaceX's AI division.

Goldman Sachs, however, is more bullish. The bank believes revenue from SpaceX's AI division will soar 388% year over year to $15.6 ⁠billion in 2026, reaching $34.5 billion by 2027.

Evercore ISI, meanwhile, sees SpaceX's AI division generating $755 billion in sales by 2031, with total company revenues reaching $1 trillion that year. But SpaceX will need to spend aggressively in order to reach those targets. Evercore ISI projects capital expenditures to reach $360 billion in 2030, doubling to $732 billion in 2031 -- almost all of which will be dedicated exclusively to AI.

To prepare for the SpaceX IPO, it's critical to review the company's IPO prospectus and assess for yourself how reasonable SpaceX's claimed growth potential is. The most critical part will be your assessment of its AI prospects, as that division will be extremely capital-intensive and account for the vast majority of the company's total addressable market.

Not only do you need to project how large revenues from AI will be, but you also need to assess whether SpaceX will be able to raise or generate enough capital to invest heavily enough to realize those revenue targets. For perspective, SpaceX's capital expenditures totaled just $20 billion last year, yet are expected to surpass $700 billion by 2031 -- roughly half the company's intended IPO valuation.

So while rockets and Starlink garner a lot of attention, investors should spend even more time analyzing SpaceX's AI business before making an investment decision.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group and Tesla. The Motley Fool has a disclosure policy.