This is the Real Reason to Invest in the SpaceX IPO, According to 1 Wall Street Analyst

The hype machine is running at full speed ahead of SpaceX's IPO. The space company, founded by Elon Musk, has confidentially filed with the Securities and Exchange Commission (SEC) to go public and is poised to be the biggest listing in history. Major news outlets suggest that SpaceX is looking to raise roughly $75, targeting a valuation of between $1.75 trillion and $2 trillion.

But investors are missing out on the most important reason to invest in the SpaceX IPO, according to one Wall Street analyst.

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A lot to like

It seems the SpaceX IPO has gone viral even before it has been officially announced, sending space-age investors into a frenzy. And there are plenty of reasons to be bullish. After all, SpaceX had revenue estimated at between $15 billion and $16 billion in 2025, resulting in EBITDA (earnings before interest, taxes, depreciation, and amortization) of $8 billion.

Driving those solid financial results is the SpaceX launch business, which has already conducted 635 successful Falcon rocket launches. Then there's the Starlink satellite internet business, which has more than 10,000 satellites in orbit, providing internet service to more than 9 million users.

While those money-generating businesses are reasons to be optimistic, they are only two pieces of a much bigger puzzle, according to veteran tech analyst Gene Munster, managing partner at Deepwater Asset Management. In a post on X, Munster wrote:

Investors looking at the SpaceX IPO are focused on the launch business and Starlink subscribers. They're missing the real story. SpaceX, through its constellation of Elon (Musk)-controlled entities, has quietly assembled the only set of assets capable of building a fully sovereign AI.

Sovereign AI is each country's ability to develop and harness AI for the betterment of its society. The market could be worth as much as $600 billion by 2030, according to global management consulting firm McKinsey & Company.

Munster posits the company has four pillars needed to offer the full stack of sovereign AI. SpaceX's launch monopoly and high-margin logistics business form the first pillar, giving the company the resources to deploy "compute and data centers into orbit." xAI, which merged with SpaceX early this year, provides critical artificial intelligence (AI) infrastructure.

The second pillar is Starlink's hyperscale network, which Muster says also serves as a global internet service provider (ISP). This allows SpaceX to control the flow of compute, either on the ground or in orbit, without relying on other providers.

The third pillar is Grok, xAI's frontier model trained on "a proprietary, high-velocity data asset (X)" that offers "a real-time data advantage," according to Munster.

The final pillar is the Terafab, Musk's upcoming high-performance semiconductor fabrication facility, a joint venture between Tesla and SpaceX. The purpose of the venture is to solve the current "chip bottleneck" and produce 1 terawatt (1 trillion watts) of compute capacity per year -- more than the current worldwide total combined.

Munster opines, "If vertical integration is the path to capturing margin in the intelligence economy (and we believe it is), then SpaceX has the most compelling structural advantage of any company in the world." He also says it's hard to put a value on the opportunity.

Plenty will have to go right for SpaceX to achieve Munster's vision. If it does, the sky is the limit.

Danny Vena, CPA has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.