Key facts
- SpaceX shares have surged over 50% in three trading sessions following its IPO.
- The company's valuation has surpassed $2.5 trillion.
- Analyst Tim Farrar suggests the valuation is driven by Elon Musk's future ambitions rather than current business performance.
- Farrar indicated that SpaceX would need a significant revenue increase to justify its current market value.
- Starlink's revenue per user has declined, posing a near-term risk according to Farrar.
SpaceX shares continued their upward trajectory, surging 11% in premarket trading on June 16, 2026, and were on track to extend a rally that has seen the stock gain over 40% in its first two sessions as a public company. The company's valuation has now surpassed $2.5 trillion.
However, some analysts are questioning the astronomical valuation. Tim Farrar, a satcom and wireless spectrum consultant, stated that investors are backing Elon Musk's long-term vision rather than the current performance of SpaceX's launch, Starlink, and AI businesses. Farrar suggested that SpaceX would need a 50-fold increase in revenue over the next five years to justify its current market value.
Musk has predicted that SpaceX could generate $1 trillion in annual revenue by 2030 and exceed that level in 2031. Farrar pointed to Starlink as a key near-term risk, citing a sharp decline in revenue per user and recent price hikes, which he suggests indicate slower-than-expected growth. He noted that the company's existing businesses alone do not support a valuation in the trillions.
Despite his valuation concerns, Farrar acknowledged SpaceX's competitive edge, stating that the company has achieved unprecedented feats in the space industry and is likely to maintain its dominance in satellite internet for years. The primary question, he noted, is whether the market itself will become large enough to support Musk's ambitious revenue targets.
SpaceX is expected to report its second-quarter results in late July or early August, which Morningstar has called the stock's "first key test." Investors will be closely watching Starlink subscriber growth, profitability trends, and spending related to Starship development. Under the company's amended S-1 filing, restricted shareholders will soon be permitted to begin selling shares.