SpaceX IPO: Will It Be a Buy or a Bust?

SpaceX confidentially filed to go public on Wednesday.

The move represents the first of three big IPOs investors are expecting this year, along with OpenAI and Anthropic.

SpaceX could be the biggest IPO in history. According to Bloomberg, CEO Elon Musk is targeting a $2 trillion valuation, which would make his rocket company, which also owns xAI and the Starlink satellite internet service, one of the top ten most valuable companies in the world, worth more than Tesla or Meta Platforms.

The company could raise as much as $75 billion in the IPO, which would top Saudi Aramco's haul, making it the biggest IPO in history.

Image source: SpaceX

How SpaceX got to $2 trillion

As of December 2024, SpaceX was valued at just $350 billion based on a secondary share sale as insiders sold $1.25 billion worth of stock to investors.

In February 2026, SpaceX acquired Elon Musk's AI start-up, xAI, in a merger that valued the company at $1.25 trillion, $1 trillion for SpaceX and $250 billion for xAI.

The merger was based on a share exchange, and the valuation was determined by assessments from the board of directors and banks, including Morgan Stanley, though it doesn't reflect the views of real investors. That deal was also executed to prepare for an IPO, as the move helps shore up finances at xAI, which owns the chatbot Grok and the X social media platform, as it's burning cash to compete with OpenAI and Anthropic. SpaceX is highly profitable thanks to Starlink, and the combination will give xAI funding through those cash flows.

The move also prepares SpaceX for a major ambition of Musk's, developing space-based data centers, which Musk has said could launch in two to three years, though some scientists have pushed back on that timeline.

What the numbers say

There are only a handful of companies with valuations of around $2 trillion, and they are all hugely profitable and delivering solid growth.

However, SpaceX is still much smaller than any of those peers, based on both revenue and profits. The company has not yet filed its S-1 Prospectus, but according to Reuters, the company had between $15 billion-$16 billion in revenue in 2025, and around $8 billion in earnings before interest, taxes, depreciation, and amortization (EBITDA) of $8 billion. It's unclear if SpaceX is profitable on a generally accepted accounting principles (GAAP) basis, but as an industrial company, it likely has a large depreciation balance.

Nearly all of the company's revenue comes from Starlink as Musk said NASA would contribute just 5% of SpaceX's revenue this year.

Based on those numbers and at its targeted $2 trillion value, SpaceX trades at roughly 130 times sales and 250 times EBITDA.

That price-to-sales ratio is so high that it dwarfs every other S&P 500 company except for Palantir, which currently has a P/S ratio of 79, and traded above 100 not long ago. Palantir is also growing significantly faster than SpaceX, posting 70% revenue growth in its most recent quarter as opposed to the roughly 20% growth rate that SpaceX had last year.

Why I'm staying away from the SpaceX IPO

Elon Musk has succeeded in obtaining a lofty valuation for Tesla that is more based on future promises than current business results, and he looks set to do the same with SpaceX.

While SpaceX's current performance is impressive, it's not in the same ballpark as the "Magnificent Seven" companies that make up the most valuable names on the stock market. Musk's talk of orbital data centers and even colonizing Mars may be helping to inflate the company's valuation, but the Tesla chief is prone to exaggerating timelines and making promises he can't keep, doing so several times on autonomous driving and Tesla's robotaxis, for example.

SpaceX's dominance of the rocket launch market is impressive, but the realistic prospects for its business seem grossly exaggerated at a $2 trillion valuation. Investors are better-off passing on this one. In a volatile market, a stock this expensive could easily crash.

Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.