SpaceX is expected to go public in just over two weeks, and is looking to raise a whopping $75 billion at a previously unheard of valuation of $1.75 trillion. There’s even speculation that the company could look to stretch that valuation to an even loftier $2 trillion.
But despite the company establishing itself as a key figure in NASA’s efforts to return to the Moon and having Musk’s much-hyped AI startup xAI be folded into it, analysts are growing wary that the space company could be massively overvalued, as CNBC reports. In other words, it may turn out to be a horrendous investment.
“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 analysts wrote in a Monday note.
For one, plenty of questions remain over the company’s profitability, particularly following the merging of xAI, a company that has been burning through oodles of cash in what Morningstar called a “material threat of value destruction” for SpaceX.
Even before the merger, SpaceX lost just shy of $5 billion in 2025. It also recorded a net loss of $4 billion in the first quarter of this year alone. As a result, the investment research company estimates a more reasonable valuation for the company would be around $780 billion, around 48 percent les than its private market valuation of $1.5 trillion, per CNBC.
Nonetheless, the sheer amount of pent-up investor enthusiasm could send SpaceX’s ticker soaring — at least in the short term.
“With a small initial float boosted by almost every investment bank on the planet, buoyant investor appetite for AI infrastructure bids, and an unprecedented path to inclusion in the Nasdaq 100 Index just 15 trading days after the IPO, we expect SpaceX’s share price will likely survive separation and may even ascend, at least for a time,” Morningstar wrote in its note.
However, investors will likely have to remain patient if they’re expecting SpaceX to actually make any money. Even the company itself is intimately familiar with its financial shortcomings, admitting in its May 20 filing with the Securities and Exchange Commission that it has a “history of net losses and may not achieve profitability in the future.”
Its latest AI addition could similarly bog down any efforts to turn a profit, with SpaceX noting that “our AI segment is capital intensive, has incurred significant operating losses, and operates in a nascent and rapidly evolving market in which the potential of AI remains uncertain.”
SpaceX also admitted that it heavily relies on “US government contracts that are subject to competitive bidding.”
In short, it’s no wonder retail investors are wary of a multitrillion dollar valuation and are choosing to play it safe for now. Besides, if Musk’s other ventures — most notably Tesla — are anything to go by, it could end up being an extremely rocky ride. The EV maker has similarly greatly benefited from a massively overvalued share price, often reflecting the public’s support of its mercurial CEO, instead of any business fundamentals.
“You start comparing how much revenue a company generates, how much profit, and then you start seeing the big difference and something doesn’t make sense,” retail investor Neil Rozenbaum, who said that SpaceX is overhyped ahead of its IPO, told Business Insider. “Would I want to own SpaceX eventually? Yes, but probably not on day one.”
Meanwhile, some netizens are advising to bet against SpaceX to make a buck.
“Short it, no balls,” one Reddit user joked.
“Goldman Sachs, as lead underwriter, is setting itself up for the mother of all shareholder lawsuits when the lipstick comes off this pig,” another wrote.
More on SpaceX: SpaceX Stock May Actually Be a Horrendous Investment
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