Later this year, Elon Musk’s private space vehicle business SpaceX is expected to go public in what promises to be one of the largest IPOs in stock market history. As is often the case with Musk’s innovative businesses, though, questions are already building about SpaceX’s valuation compared to the earnings it can be expected to deliver. How big will the SpaceX IPO be, and can the company justify the high price tag that will be assigned to it when it goes public?
SpaceX’s Anticipated IPO Valuation
Although SpaceX hasn’t definitively arrived at an IPO valuation, recent reports suggest that the company could be valued at as much as $1.5 trillion when it goes public. The IPO is expected to come later this year, with June being widely cited as the most likely timeline. Interestingly, the IPO value of $1.5 trillion is nearly double the $800 billion that SpaceX was most recently valued at during a recent private secondary share offering. It would also put SpaceX’s value closely in line with that of Musk’s flagship business, Tesla, which currently has a market cap of $1.5 trillion.
The Impact of xAI
Although SpaceX was initially planned as a standalone IPO, the company recently announced its acquisition of xAI, the startup behind the Grok chatbot. At the time of the acquisition, an anonymous source revealed that xAI was being valued at $125 billion and SpaceX was being valued at $1 trillion. Though this still falls a bit short of the $1.5 trillion valuation SpaceX is seeking, it does go some way toward explaining the gap between that number and SpaceX’s value during its latest funding round.
Increasingly, the SpaceX IPO appears to be a consolidation of Elon Musk’s various business interests. In acquiring xAI, SpaceX will also be bringing the X social media platform, formerly Twitter, under its umbrella. X was purchased by xAI in 2025, setting the stage for the SpaceX purchase that would bring several of Musk’s various businesses together under a single entity. Though nothing has been confirmed and the process would likely be far more difficult due to the sizes of the two businesses, speculation abounds that a merger between SpaceX and Tesla could occur in the future to bring Musk’s entire business empire together under a single roof.
Can SpaceX Justify Its High Price Tag?
While there’s little doubt that SpaceX will be one of the defining IPOs of 2026, it’s not yet clear whether or not the company will be able to justify its extremely high valuation. Last year, SpaceX reportedly generated about $8 billion worth of profits on revenues of $15-$16 billion. Though this represents an impressive margin that will appeal to prospective investors, it also places the company’s expected IPO valuation of $1.5 trillion at about 187.5 times last year’s standalone earnings and up to 100 times sales.
Though the xAI acquisition closes some of this gap, it’s worth noting that the AI startup is still generating modest revenues and losing money. As of the end of 2025, xAI was estimated to be generating about $3.8 billion in annualized revenue. Though this was nearly 40 times the revenue that it was believed to be generating at the end of 2024, almost all of this growth can be attributed to its acquisition of the X social media platform. Of xAI’s revenues, $3.3 billion is attributable to X’s advertising and subscriptions. Excluding the social media business, xAI is only bringing in about $500 million per year and is believed to be spending about double that amount each month. The company is, however, targeting profitability by next year.
This leaves SpaceX’s value heavily dependent on long-term earnings growth associated with a number of innovative projects. One such project is the company’s plan to build space-based data centers to power AI development. Though building data centers in orbit has some hypothetical advantages, it also comes with a number of practical drawbacks that could make it economically unfeasible for the foreseeable future.
Through xAI, the combined SpaceX will also have exposure to another of Elon Musk’s uncertain long-term growth catalysts, namely the rollout of Tesla’s Optimus robots. Musk recently announced that xAI would be developing AI for the humanoid robots, undermining assumptions about Tesla’s independent AI proficiency.
One thing that could help SpaceX’s valuation argument without relying on futuristic and highly uncertain projects, however, is Starlink. Between the end of 2023 and November of 2025, Starlink’s subscriber count nearly quadrupled from 2.3 million to about 8 million. Starlink also accounted for the lion’s share of SpaceX’s 2025 revenue, delivering about $10 billion from subscriptions. With strong growth ongoing, Starlink could prove to be the saving grace of SpaceX.
Will SpaceX Be a Buy?
Even with the boost from Starlink, SpaceX could struggle to maintain the valuation it is expected to command over the long run. With much of its value seemingly tied up in projects like space-based data centers and AI for humanoid robots, investors may have to wait years for earnings growth from some of SpaceX’s catalysts to materialize. It’s worth noting, however, that the market has proven surprisingly willing to maintain high valuations on Elon Musk’s futuristic visions before. Even today, Tesla is still trading at well over 350 times its trailing 12-month earnings and over 15 times sales. If this market enthusiasm translates to SpaceX shares, the combined space and AI company could be given a similar benefit of the doubt on its valuation.
On the other side of the coin, timing could end up working against SpaceX when it comes to maintaining its valuation. Extremely high stock prices driven by expected AI growth are beginning to wear on investors, driving volatility among tech stocks and a growing rotation into value stocks. If these trends continue throughout the year, SpaceX may find itself going public amid cooling investor enthusiasm for distant earnings from technological innovation. Between this and the massive premium to earnings and revenue that SpaceX is expected to command, the IPO may prove to be too expensive at its expected price.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.