Morningstar Values SpaceX at $780 Billion, Nearly Half Its $1.75 Trillion IPO Target

SpaceX is "significantly overvalued" ahead of its forthcoming Nasdaq debut, according to a Morningstar note published Monday, with analysts placing the company's fair value at $780 billion — roughly 48% below its private market valuation of $1.5 trillion.

The firm is targeting a $75 billion fundraise and a valuation of $1.75 trillion in what is expected to be the largest initial public offering on record. Trading is anticipated to begin in just over two weeks.

Morningstar's discounted cash flow analysis underpins its $780 billion figure, with analysts citing deep uncertainty around the profitability of SpaceX's xAI unit. The analysts described xAI's "economic moat" as "indeterminate" and characterized the division as posing "a material threat of value destruction" to the broader company.

"We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO," the Morningstar analysts wrote.

The firm acknowledged, however, that early price performance could defy its valuation concerns. "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 said.

SpaceX's financial disclosures paint a company still burning through capital at scale. The company recorded a net loss of $4.28 billion in its most recent quarter, following a $4.94 billion loss for full-year 2025. Its Starlink connectivity arm generated $3.26 billion in revenue in the latest quarter, representing 69% of total revenue and functioning as the only profitable segment of the business.

The space division lost $619 million on an operating basis, while the AI unit posted a $2.5 billion operating loss.

SpaceX's S-1 filing states that the company has "a history of net losses and may not achieve profitability in the future," and that it expects to "incur significant capital expenditures over a period of years" before its AI products and services turn profitable. Much of the company's value, the filing notes, hinges on technologies that are "novel and untested."

Dan Coatsworth, head of markets at AJ Bell, flagged the valuation multiple as a potential ceiling on upside. "A $1.75 trillion valuation would put SpaceX on 67 times sales, three times as much as Nvidia's rating based on its past financial year and latest share price," Coatsworth said, adding that such a premium implied a valuation "richer than a plate of dauphinoise potatoes."

Coatsworth also noted that relatively little is publicly known about SpaceX's financials given its history as a private company, with CEO Elon Musk holding 85% of the voting rights.

Morningstar indicated that long-term investors would likely find more attractive entry points after the initial trading frenzy, with "a greater margin of safety" than at the time of flotation — framing the IPO itself as a less favorable moment for retail participation.

Separately, speculation has resurfaced about a potential merger between SpaceX and Tesla, though no formal steps toward such a combination have been disclosed.

As the listing date approaches, the tension between institutional enthusiasm for AI infrastructure and fundamental concerns about profitability is likely to remain at the center of investor debate around one of the most closely watched public offerings in years.

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