At a Glance
- SpaceX plans a 2026 IPO seeking to raise $30 billion, potentially the largest in history
- The company could be valued at $800 billion, giving it a price-to-sales ratio of 51.6
- IPO timing may hinge on whether Starship becomes operational before going public
- Why it matters: Retail investors may get limited access to shares, and high valuations historically underperform
SpaceX is preparing to open its doors to public investors. The Elon Musk-led company, which dominates commercial space launch and satellite internet services, is targeting a 2026 initial public offering that could raise more than $30 billion-a figure that would make it the largest IPO on record.
The Valuation Challenge
The rumored valuation places SpaceX at $800 billion. With projected 2025 revenue of $15.5 billion, that translates to a price-to-sales ratio of 51.6. Historical data shows companies with ratios above 40 rarely deliver strong returns.
Jay Ritter, known as “Mr. IPO” and a finance professor at the University of Florida, analyzed 41 years of IPO data. Only 13 U.S. companies with over $100 million in sales have gone public with price-to-sales ratios above 40. These stocks underperformed the market by an average of 38% over three years for investors who bought at the offer price. Those who bought at the first-day closing price did even worse, trailing the market by 62%.
“SpaceX might be a great company, but being a great company does not necessarily mean that the stock will be a good investment,” Ritter said.
Limited Access for Retail Investors
Most IPO shares typically go to institutional investors. SpaceX’s massive offering size means only a small fraction will likely reach individual investors. Those able to buy at the offer price and sell quickly might profit from first-day pops. Buying in the open market after trading begins could be riskier.
The Competition Gap
SpaceX’s technological lead compounds the valuation debate. Daniel Maguire, research analyst at ARK Invest, notes the company landed reusable boosters a decade ago while competitors lag. Blue Origin only recently achieved booster landings, while SpaceX advances toward full reusability with Starship.
“SpaceX is full steam ahead with full reusability in its Starship program,” Maguire said. “We think SpaceX is probably one of the most compelling private companies globally.”
Beyond Rockets: Starlink and AI Ambitions
SpaceX’s growth story extends beyond launch services. Starlink satellite internet provides global coverage, including direct-to-cell service for dead zones. The company is exploring orbital data centers that could reshape AI computing by bypassing Earth’s infrastructure limitations around power, cooling, and permitting.
Maguire’s firm released an open-source SpaceX valuation model but hasn’t factored in orbital data centers, representing potential upside. “SpaceX is really a generational company that could produce foundational infrastructure for both global connectivity and AI compute over the next decade,” he said.
The Timing Question
Kimberly Siversen Burke, director of government affairs at Quilty Space, says IPO timing is crucial. Going public before Starship becomes operational would shift technical risk to public investors. Waiting until regular Starship flights begin lets SpaceX sell proven execution instead of future promises.
Starlink’s next growth phase-V3 satellites and expanded direct-to-cell services-depends on Starship’s operational status. Space-based data centers remain commercially unproven and capital-intensive, unlikely to generate revenue soon.
“Private capital tolerates long arcs and narrative elasticity far better than public markets, which price delivery,” Burke noted. “Any IPO would likely be timed up with SpaceX’s belief that it has crossed the Rubicon-from ambition to utility-scale infrastructure.”
Broader Economic Impact
Matthew Weinzierl, Harvard Business School professor, argues everyone is already invested in SpaceX through daily life. Space technology enables GPS, telecommunications, climate monitoring, weather forecasting, scientific research, and national security.
“SpaceX is the dominant company in space today,” Weinzierl said. “Whether we own its stock directly or just benefit from the innovation and efficiency it has created, we should all hope that SpaceX succeeds.”
Key Takeaways
- SpaceX’s potential $800 billion valuation creates significant downside risk based on historical IPO performance
- Most shares will go to institutional investors, limiting retail access
- The company’s 10-year technological lead provides competitive moats but may already be priced in
- IPO success may depend on Starship’s operational timeline
- Orbital data centers and AI applications represent future upside but remain unproven
The SpaceX IPO presents a classic investment dilemma: a transformative company at a transformative valuation. While the company’s technological achievements are undeniable, history suggests extreme valuations often lead to disappointing returns for public market investors.
