Is SpaceX even worth half of what Elon Musk says it’s worth?
SpaceX officially files to go public in record-breaking IPO
SpaceX’s assets, including Starlink and xAI, and the company’s all-stock merger would be worth $1.75 trillion.
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SpaceX just announced an initial public offering price of $135 for its shares, increasing investor excitement ahead of the company’s June 12 Nasdaq listing.
But that price means the company and its CEO Elon Musk value SpaceX at a whopping $1.75 trillion. Isn’t that a bit too optimistic? What is SpaceX actually Does it really have value as a company?
SpaceX is demanding a premium price
A $1.77 trillion valuation would make SpaceX the eighth-largest company in the world by market capitalization, just ahead of Saudi Aramco’s $1.75 trillion and Meta Platforms’ $1.75 trillion. (NASDAQ:Meta) $1.5 trillion, but just below Broadcom (NASDAQ:AVGO) 1.8 trillion dollars.
One of the most common ways to value an unprofitable company like SpaceX is the price-to-sales (P/S) ratio, which compares a company’s market capitalization to its annual revenue (the lower the multiple, the better).
SpaceX is valued at $1.77 trillion, giving it an impressive P/S ratio of 93.7 times 2025 revenue. In comparison, technology giant Nvidia (NASDAQ:NVDA) is trading at only 23.2 times its prior fiscal year earnings, and most artificial intelligence (AI) companies trade at even lower valuations. Palantir Technologies, a notoriously expensive AI security company (NASDAQ:PLTR) The company’s P/S ratio is “only” 77.7 times last year’s sales.
It’s not unusual for high-growth companies to have extremely high valuation metrics, but SpaceX is far from being a “high-growth” company at this point.
SpaceX’s business segments are growing at less than what some say
SpaceX’s year-over-year sales growth rate for the first quarter of 2026 was an unsurprising 12.5%. By comparison, Nvidia and Palantir each saw their first quarter revenue increase 85% year over year. But what are SpaceX’s future growth prospects?
The company claims a total addressable market (TAM) of $28.5 trillion. Capturing just a 1% share of such a large market would amount to $285 billion in annual revenue, a significant improvement over the $18.7 billion SpaceX brought in last year.
The bulk of TAM’s claim ($22.7 trillion out of $28.5 trillion) is the market for “AI enterprise applications.” At the moment, neither SpaceX nor the recently acquired xAI are significant players in this space. SpaceX’s only stated strategy for addressing this market is to “meet the digital needs of the world’s largest industries with AI solutions.”
It’s not very convincing (or descriptive!).
Huge valuations are not justified in small markets
While SpaceX believes its xAI market opportunity is vast, it has a very different idea of the market for other businesses.
SpaceX’s rocket launch business is the clear world leader in the industry, delivering more than 80% of the mass put into orbit by 2025, and the company’s Starlink satellite broadband and mobile service is the only part of the company currently making a profit. However, the company believes that the combined TAM of these businesses is only $2 trillion. And for all of 2025, they brought in just $15.4 billion in revenue (0.8% of TAM billings).
Even if SpaceX is right about TAM’s size, it will take time to increase market share. Even if SpaceX were to instantly quadruple its current company-wide revenue growth rate of 12.5% to 50% and sustain that growth for five consecutive years (a tall order), it would only generate $141.8 billion in revenue by 2030, or just 0.5% of the company’s claimed TAM. On the other hand, if SpaceX maintains its current growth rate, its revenue in 2030 would be just $33.7 billion.
fair evaluation
If Mr. Musk does well at the helm of the ship, SpaceX’s growth rate will probably rise from 12.5%, but it won’t reach 50%. It will probably be in the 20%-25% range on average. So how do similar AI and telecom companies with $18.7 billion in revenue and 20% revenue growth be valued?
Well, Seagate Technology (NASDAQ:STX)Arista Networks, which makes data storage devices, grew its revenue 21% last year to $11 billion. and Arista Networks, a data center infrastructure specialist. (NYSE:ANET) Revenue grew 22.1% over the past year to $9.7 billion. Both are still smaller than SpaceX from a revenue perspective, but are now growing faster. As a carrier, T-Mobile US (NASDAQ:TMUS) Its current revenue of $90.5 billion is higher than SpaceX, but its annual revenue growth rate is lower at 7.7%.
Interestingly, these three profitable companies have roughly the same market capitalization. T-Mobile US has $194.2 billion, Arista $193.4 billion and Seagate $191 billion. This suggests that SpaceX’s fair market cap is probably somewhere between $150 billion and $250 billion. If you’re a big fan of Musk’s AI vision, you could claim a market cap of $500 billion. But even if you are extremey If you’re optimistic about SpaceX’s revenue and profit growth potential, it’s hard to argue that the company is worth more than about $750 billion.
But $1.77 trillion? Not even close. From a value perspective, investors should stay away from SpaceX stock until they see evidence that the company is capturing more than a fraction of the market share.
John Bromels holds positions at Meta Platforms and Nvidia. The Motley Fool has positions in and recommends Arista Networks, Broadcom, Meta Platforms, Nvidia, and Palantir Technologies. The Motley Fool recommends Nasdaq and T-Mobile US. The Motley Fool has a disclosure policy.
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