SpaceX’s record IPO has Wall Street torn between a Musk ‘holy grail’ and a $135-per-share leap of faith

Analysts disagree on whether SpaceX is worth what Musk is asking.

SpaceX’s $1.77 trillion IPO is set to become the largest in history this week, and, analysts say, among the most controversial. 

The IPO, which aims to raise $75 billion by selling 555 million shares at a fixed price of $135 per share, starts trading on Friday, June 12, and will be listed on the NASDAQ under the ticker SPCX.

The IPO, and its gigantic size, reflects investor enthusiasm for all things AI, but it will also help to break a rut in the IPO market. Last year, there were only about 200 public offerings—roughly half the number of traditional IPOs during the 2021 boom. Now, on the back of investor enthusiasm for high-growth plays, AI heavyweights Anthropic and OpenAI have also confidentially filed to go public.

Yet SpaceX’s IPO has already become a lightning rod for debate. Some market onlookers argue its eye-popping valuation is untethered from its fundamentals. SpaceX posted $18.67 billion in 2025 revenue, up 33%, while swinging to a $4.94 billion net loss: about 94x trailing sales at the IPO price. 

Others are convinced Elon Musk will achieve his lofty ambitions and, in the process, replicate the Tesla playbook to make SpaceX one of the biggest companies in the world by market cap.

The IPO is reportedly oversubscribed, meaning there’s more investor demand than the number of shares SpaceX is willing to offer at the offering price. The first day (or days) of trading could thus be prone to major price swings.

Still, analysts are split on whether SpaceX will ultimately skyrocket or falter on the platform. Here’s what some of them are saying.

The Bull Case

Dan Ives, a managing director and senior equity research analyst at Wedbush Securities, is a longtime Tesla bull, and his enthusiasm has now spread to SpaceX’s IPO. In a note to investors on Wednesday, he described the public offering as “an important moment for the broader tech sector in our view as this AI Revolution and data takes this next step forward.” 

Ives believes there is more than an 80% chance SpaceX will merge with Tesla post-IPO to create a Musk conglomerate. Tesla already owns a stake in SpaceX, he observed, thanks to the rocket company’s acquisition of xAI in February, which converted Tesla’s $2 billion xAI investment into shares of SpaceX.

Combining both of Musk’s public companies could be a “holy grail” move that would allow the world’s richest man to control more of the AI ecosystem, Ives said.

While xAI’s large language model Grok has so far struggled to keep pace with models from Anthropic and OpenAI, SpaceX has found success recently in providing the infrastructure that fuels the AI race thanks to its Memphis, Tenn. Colossus data center facility, which is capable of delivering more than 300 megawatts of AI compute thanks to its collection of 220,000 top-of-the-line Nvidia GPUs.

SpaceX revealed in a filing earlier this month that it had struck a deal to rent AI compute capacity to Google for about $920 million a month. Last month, Anthropic also agreed to pay $1.25 billion per month until May 2029, granting it exclusive access to Colossus 1 in Memphis—more than $40 billion total. 

To be sure, Ives said investors’ anticipation for the IPO has added some volatility to the broader market. This was evident on Tuesday when the tech-heavy NASDAQ index fell 4% in intraday trading only to rebound to close down 1%. The index was trading down nearly 2% just after midday Wednesday.

There are also worries among investors that the broader tech trade may lose some steam due to SpaceX’s giant IPO, Ives acknowledged. Yet, he wrote in his Wednesday note that “this will be a short-term bump in the road as the market adjusts to this new tech titan as a public company.”

The Bear Case for SpaceX

On the other side of the spectrum from Ives is Morningstar’s Nicolas Owens, who claims the SpaceX IPO is significantly overvalued. 

Owens, in a note published Monday that built on a full report released last week, put SpaceX’s fair value at $63 per share, 53% below the reported offering price.

While Owens noted that Morningstar’s view was based on “mathematics more than skepticism,” he wrote that based on his calculations, SpaceX’s price offering essentially amounts to a call option mechanism, where investors are paying an “option premium” of  $72 per share for the right to get in on SpaceX’s lofty ambitions like orbital data centers and its Mars base project.

“The more likely you believe cost-competitive orbital AI data centers will be, the closer to the offering price a reweighted valuation of SpaceX gets, and those extra projects could be seen as free options,” he wrote.

The influence of these long-shot projects, especially orbital data centers, weighs heavily on the stock’s potential value, Owens said. 

In the most optimistic scenario, SpaceX would achieve a valuation of $1.97 trillion, or $154 per share, by proving, first, that orbital data centers are feasible, and, second, that they are more cost-effective than terrestrial options, Owens said. While he said SpaceX may be the only company on Earth capable of achieving this, experts say the science behind the idea is uncertain at best.

Owens’ base case is a “minimum viable product” outcome with a 50% probability. In this scenario, orbital data centers are technically feasible but face scale limits, leaving SpaceX with roughly 4% of forecast global AI compute capacity, which will yield it about $47 billion in annual orbital‑AI revenue by 2035.

In the worst case, Owens sees a 43% chance that orbital data centers never leave the launch pad. In this “No-go” scenario, orbital data centers either don’t work at all or present no advantage over terrestrial options.

“We surmise that the company, having invested tens of billions to find this out, would cut bait on the project sometime around 2028, the way management walked away from plans to build multiple small-car factories at Tesla,” wrote Owens. 

Investors, he wrote in the full report last week, may want to wait to buy given the high price but also SpaceX’s unusual lockup schedule. Unlike in other IPOs where company insiders and existing shareholders are usually allowed to sell their shares only after 180 days, SpaceX will allow some of these investors, excluding Musk, to sell a chunk of their shares as soon as weeks after the IPO date and then periodically until December.

“We think long-term investors eager to participate in SpaceX’s future endeavors and potential success will have opportunities to do so with more margin of safety than the initial offering is likely to provide,” he said in the full report published last week.

This story was originally featured on Fortune.com