Is $1.75 trillion worth SpaceX?

Author: Zhao Ying, Wall Street Insights

SpaceX is preparing a potential groundbreaking IPO that could rewrite the history of the capital markets, with a target completion date as early as June 2026. The company aims to raise up to $75 billion, with a potential valuation exceeding $1.75 trillion. However, whether this figure can stand firm in the public markets remains a key question for investors.

According to Bloomberg on Thursday, SpaceX has selected several top Wall Street banks to assist with the IPO filing process, including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley, all of which have confirmed their participation. If the fundraising target is achieved, this IPO will surpass Saudi Aramco’s 2019 record of $294 billion, becoming the largest stock offering in history.

SpaceX’s listing plans have become more complex following the full stock acquisition of xAI completed in February this year. Currently, xAI spends about $1 billion per month on AI infrastructure, which is diluting the attractiveness of SpaceX’s core business—especially its satellite internet service, Starlink.

Meanwhile, Elon Musk is seeking to maintain absolute control over the company through a dual-class share structure, further raising concerns among public market investors.

Why go public now?

Although SpaceX has generated considerable cash flow from Starlink, the company’s larger strategic goals require significantly more capital than it currently has. According to Bloomberg, an internal memo from December last year explicitly states that funds raised from the IPO will be used for the continued development of Starship rockets, the construction of space AI data centers, and lunar base projects.

The integration of xAI has sharply increased funding needs. Insiders reveal that the approximately $1 billion monthly expenditure on computing power and model training for xAI makes it difficult for SpaceX to sustain its private fundraising pace. Going public could allow SpaceX to gain a competitive advantage in AI funding before OpenAI and Anthropic complete their own IPOs.

Valuation: Support and skepticism

The $1.75 trillion valuation target has sparked significant debate among analysts and investors.

Proponents argue that SpaceX’s business model is unique. According to PitchBook analysts, “The growth of Starlink users, dominance in the rocket launch market, and the ongoing deployment of direct-to-phone networks form a one-of-a-kind commercial portfolio in the public markets.” SpaceX’s monopoly position in commercial spaceflight, its deep ties to defense and telecommunications sectors, and Elon Musk’s personal brand—Tesla’s stock has surged about 3,000% over the past decade—could all serve as strong incentives for investors.

However, skepticism is also prevalent. Analysts typically value companies based on future profit expectations, industry competition, and profit margins, but xAI’s ongoing losses are dragging down overall financial performance. Some investors worry that Musk might continue to funnel resources from SpaceX—its industry leader—into xAI, which is highly competitive. If the market views SpaceX as a loosely structured conglomerate, its valuation premium could be significantly compressed.

xAI Acquisition: Opportunity or Burden?

Completing the full stock acquisition of xAI just before the IPO has upset some existing investors. Shareholders who bet on the space race now find themselves exposed to substantial AI business risks; investors skeptical of AI industry prospects face a potentially high-stakes gamble.

Musk’s stance is quite different. He describes this business landscape—spanning rockets, space internet, AI, and social media—as a “vertically integrated innovation engine,” believing that synergies among these sectors will give SpaceX a competitive edge in the emerging space data center market.

But whether this narrative can persuade public market investors remains to be seen. After the IPO, SpaceX will be required to disclose quarterly financial data, revealing the full extent of xAI’s losses to Wall Street.

Control Structure: Musk’s Moat

On the ownership side, Musk held less than 50% of SpaceX shares before completing the xAI acquisition. Previous private funding rounds involved external investors such as Peter Thiel’s Founders Fund, Fidelity, and Alphabet. After the xAI deal, Musk’s exact ownership stake remains unclear.

Bloomberg reports that SpaceX is exploring a dual-class share structure post-IPO to ensure that insiders—including possibly Musk himself—maintain near-absolute control over strategic and governance decisions. For investors who trust Musk’s leadership and long-term vision, this arrangement may not be a barrier; however, in the event of major missteps, a governance structure lacking checks and balances could pose significant risks.

IPO Timeline: As early as June

If all goes smoothly, SpaceX could complete its IPO as early as June 2026.

The process typically begins with the submission of a confidential registration statement to the U.S. Securities and Exchange Commission (SEC), which usually takes two to three months for review. After approval, the company will publicly disclose its prospectus and initiate a 15-day investor comment period. Following that, SpaceX will conduct roadshows with underwriters to gather institutional orders before setting the final offering price.

Retail investors may also participate. Users of platforms like Robinhood Markets and SoFi Technologies might be able to subscribe directly, though retail allocations in hot IPOs are usually limited.

The five major underwriters—Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley—have not yet detailed their specific roles. Given the unprecedented scale of this deal, Wall Street firms are eager to participate.