The response to SpaceX’s eventual June 2026 IPO was akin to a moon launch and a meme stock frenzy. Elon Musk became the first trillionaire in history in a matter of hours after shares opened at $150, significantly higher than the $135 IPO price. That afternoon, there was an odd sensation outside the Nasdaq that was similar to euphoria but not quite. The kind of electric buzz that prompts people who would otherwise be cautious to grab their brokerage apps.
That enthusiasm makes sense. In all honesty, SpaceX is a truly amazing company. Over 80% of the world’s mass delivered to orbit is under its control. Over the past 20 years, it has reduced launch costs by nearly 95%. Nearly two billion potential customers who live in low-density areas that traditional broadband providers have long disregarded are served by Starlink, its satellite internet service. The business changed the economics of the space industry, not just entered it.
And yet. There’s a feeling that the excitement surrounding the IPO has driven the valuation well above what the business fundamentals can sustain. SpaceX was valued at approximately $780 billion by Morningstar, which is about half of its $1.5 trillion private market valuation prior to the listing. The implied market cap had increased even further by the time shares were traded publicly. The difference between market price and intrinsic value is significant. Even an enthusiastic investor should be put on hold by this kind of figure.
The price tag isn’t the only issue. Musk sold xAI, the parent company of the social media platform X, the Colossus data center, and the Grok AI chatbot, to SpaceX at the beginning of 2026. It’s an extensive addition to an already intricate operation. Morningstar analysts identified the AI company as a material risk of value destruction and characterized its economic moat as essentially indeterminate. Both Starlink and the launch are doing well. Now housed within the same balance sheet, the AI arm is a much murkier proposition.
The lockup question is another. In the months after the listing, a sizable portion of SpaceX shares owned by staff members and pre-IPO investors will be available for sale. If you’re considering purchasing a stock now at an already high price, it’s important to keep in mind that a wave of potential supply hitting the market tends to weigh on a stock. This is a fantastic business at an unfair price, according to one analyst.
However, the long-term outlook is not dire. Starlink appears to have a very promising revenue and profit trajectory. If the next-generation Starship rocket reaches full reusability by 2029 as anticipated, it could further reduce launch costs and create completely new business models, such as orbital computing, space logistics, and infrastructure that doesn’t yet exist. The launch business alone could generate $18 billion in revenue at a 20 percent operating margin by 2035, according to analysts’ base-case scenario. These figures are accurate and significant.
There is a sensible middle ground for investors who wish exposure without placing all of their bets on a single high-wire act. ETFs like the Invesco QQQ already have a stake in SpaceX because the company was added to the Nasdaq-100 within two weeks of its IPO, which is incredibly quick. Purchasing through an ETF spreads the risk over more than a hundred other companies and gives you a stake that gradually increases as the company’s public float grows over time, but it won’t give you SpaceX in concentrated form.
In five years, it’s still unclear if SpaceX will be worth its current valuation or if the stock will quietly lose its premium as the lockup periods come to an end. It is evident that purchasing at these levels is not the same as making an affordable investment in a fantastic company. The worst entry points are sometimes associated with the best businesses. This could be one of those moments that is worth paying close attention to but maybe not something you should rush into today.
