Mark Your Calendar: SpaceX Could Be a Very Different Stock After June 12

SpaceX is reportedly targeting an initial public offering on June 12. With the share price targeted at $135, the target valuation is expected to be around $1.77 trillion, with the sale raising up to $75 billion in new capital.

There are ways to buy SpaceX stock today. But the easiest way to gain exposure is simply to buy shares once they become publicly available.

A growing number of experts, however, are warning investors not to participate in the IPO. Instead, they believe the best opportunity to buy SpaceX shares is after the June 12 IPO. And there's one major reason why.

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Here's why you shouldn't buy SpaceX stock on June 12

SpaceX's targeted valuation of $1.77 trillion will make it one of the largest public debuts in history. And there's plenty of reason to believe SpaceX is worth the lofty price tag.

"We believe we have identified the largest actionable total addressable market in human history," the company's IPO prospectus claims. "We estimate that our quantifiable TAM is $28.5 trillion."

Not everyone is as optimistic about SpaceX's valuation goal, however. That's largely due to the gap between SpaceX's expectations for its AI division and what experts believe is reasonable. A whopping $26.5 trillion of SpaceX's claimed $28.5 trillion total addressable market deals with artificial intelligence, not rockets or its profitable Starlink internet service.

Realizing the potential of its AI division is therefore critical to justifying SpaceX's $1.77 trillion valuation target. A recent report from Morningstar, however, cautions investors against believing the hype.

"We ​don't see Grok as one of the leading AI labs today," one of Morningstar's analysts warns, referring to SpaceX's AI product. Due to this, Morningstar believes SpaceX's initial valuation should be closer to $780 billion -- less than half of SpaceX's intended valuation. "We think the company has been significantly overvalued and investors will have opportunities ​to buy the stock at more attractive levels after the IPO," Morningstar concludes.

If you maintain a very long-term investment view and are risk-tolerant, participating in the June 12 IPO may still be worth it. But the stock price could be very volatile in the days and weeks to come. And according to Morningstar's research, the best time to buy may be after the IPO, not during.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.