Key facts
- SpaceX is targeting a $1.77 trillion valuation for its upcoming IPO.
- The company posted a net loss of $4.94 billion in 2025.
- SpaceX's targeted valuation is 94.53 times its 2025 sales, compared to Tesla's 16.73 times.
- Skepticism exists regarding the valuation due to unproven AI ventures like orbital data centers and the Grok chatbot.
- Some investors believe Tesla's manufacturing capabilities could facilitate a future merger with SpaceX.
SpaceX's upcoming initial public offering is poised to test the 'Elon premium,' a phenomenon that has significantly boosted Tesla's valuation and investor appeal. The rocket company, led by Elon Musk, is reportedly targeting a record-setting valuation of $1.77 trillion, which would position it among the largest U.S. public companies.
While Musk's supporters believe his track record makes SpaceX shares a compelling investment, some analysts and investors express caution. They point to the company's substantial net loss of $4.94 billion in 2025 and a valuation that is 94.53 times its sales for the same period, significantly higher than Tesla's multiple of 16.73 times its 2025 sales. Concerns are also raised about the valuation of unproven ventures, such as orbital data centers and the Grok chatbot developed by Musk's xAI, which trails established AI rivals.
Despite these concerns, some see Tesla and SpaceX as complementary businesses, with the potential for a future merger. The success of Tesla in the electric vehicle market has bolstered credibility, and some investors are comfortable paying a premium for companies associated with Musk. However, skepticism regarding SpaceX's price tag suggests that even Musk's influence may not entirely overcome concerns about its lofty valuation and the assumption of years of flawless growth and execution.
Some investors, like Adam Sarhan, plan to wait several months after the debut to assess price stabilization before considering a purchase. Others, like Alexandra Merz, are weighing the tax implications of selling Tesla shares to invest in SpaceX, with some holding onto Tesla shares in anticipation of a potential merger.