Key facts
- Morningstar analysts valued SpaceX at $780 billion.
- SpaceX's IPO target valuation is between $1.5 trillion and $2 trillion.
- Concerns exist regarding the economics of SpaceX's AI business and Starlink's technology.
- SpaceX is reportedly targeting a Nasdaq debut on June 12.
- Morningstar suggests investors may find better opportunities to buy stock after the IPO.
Morningstar analysts have valued SpaceX at $780 billion, significantly below the company's reported IPO target of $1.5 trillion to $2 trillion. The firm cited uncertainties surrounding the economics of SpaceX's artificial intelligence business, including its chatbot Grok and social media platform X, as well as technological hurdles for its Starlink satellite broadband service. Equity analyst Nicolas Owens and equity director Suryansh Sharma stated that the firm's current market value is contingent upon paving the way for novel revenue streams, such as orbital computing, which they believe are possible but have uncertain viability, timelines, and financial outcomes. Starlink is expected to be the biggest profit driver in the medium term, potentially benefiting around 2 billion people in remote areas. For the longer term, revenues could come from its AI data center business, though Morningstar's most optimistic scenario suggests it could support 21% of projected global compute demand with a 7% probability, while the most likely outcome is supporting 4% by 2040. Morningstar assigns SpaceX a "narrow" moat against competitors, citing significant spending on Grok without an apparent advantage. They advise that investors may find better opportunities to buy the stock at a greater margin of safety after the IPO, anticipating selling pressure from insider stock sales following lock-up expirations. SpaceX is reportedly targeting a Nasdaq debut on June 12, with its IPO roadshow launching on June 4.