Elon Musk's SpaceX is set to launch its investor roadshow Thursday, opening a sprint toward what would be the largest initial public offering in American history — but the week began with a direct challenge from one of Wall Street's most authoritative independent research firms. Morningstar published a fair value estimate of $780 billion for SpaceX, less than half the $1.75 trillion the company is targeting in its listing, and warned that investors in the IPO "will have opportunities to buy the stock at more attractive levels" after the offering — not at it.
The roadshow opens against a backdrop that combines genuine operational achievement with compounding financial risk. SpaceX's satellite internet service Starlink turned $4.4 billion in operating income in 2025, making it one of the most valuable broadband businesses on the planet. Everything else the company owns is burning money.
What Morningstar Found — and Why It Matters Now
Morningstar equity analyst Nicolas Owens assigned SpaceX a discounted cash flow valuation of $780 billion, anchored to its launch and Starlink businesses, and applied probability weighting to the AI segment's various development scenarios. The blended result came to $780 billion. At the targeted IPO valuation of $1.75 trillion, SpaceX would trade at roughly 94 times its 2025 revenue of $18.67 billion — a multiple that Owens described as requiring "flawless execution" from a company that is currently posting net losses. Morningstar's analysts wrote that the company "has been significantly overvalued."
Morningstar's specific concern about xAI — the artificial intelligence company Musk folded into SpaceX in an all-stock deal in February 2026 — is pointed. Owens wrote that xAI poses a "material threat of value destruction" and that its competitive position relative to OpenAI and Anthropic leaves its "economic moat indeterminate." Owens added: "We don't see Grok as one of the leading AI labs today."
For context, Nvidia — one of the most profitable technology companies in the world — trades at roughly 22 times trailing revenue. SpaceX's proposed multiple is more than four times that, applied to a company with an accumulated deficit of $41.3 billion disclosed in its S-1.
Starlink Powers the Numbers — but Faces Pricing Pressure
The investment case for SpaceX begins and ends with Starlink. The service crossed 10.3 million subscribers across 164 countries and generated $4.4 billion in operating income in 2025. Its Direct-to-Cell technology — which connects standard smartphones directly to satellites without additional hardware — is extending the addressable market beyond fixed-location broadband to global mobile connectivity.
The S-1 also discloses a headwind that has not attracted as much attention as the subscriber growth: average revenue per Starlink user fell from roughly $99 per month in 2023 to approximately $66 per month by the first quarter of 2026, a compression of about 33 percent driven by cheaper international pricing tiers. The prospectus explicitly forecasts this trend will continue. Subscriber additions are currently outpacing revenue-per-user erosion, but the margin of safety is narrowing.
The space and launch segment — Falcon 9, Falcon Heavy, and Starship development — posted a $619 million operating loss in 2025. Starship's Colossus data center complex in Memphis, housing 220,000 Nvidia GPUs built in 120 days, became the company's most capital-intensive single asset in one quarter. The AI segment spent $7.72 billion in capital expenditure in the first quarter of 2026 alone, against $1.05 billion in the space segment and $1.33 billion in connectivity.
xAI, which lost $6 billion in 2025 and is projected to burn $10 billion in 2026 per the S-1, is the primary drag on SpaceX's consolidated financials. Full-year 2025 revenue for the combined entity came in at $18.67 billion, up 33 percent year-over-year. The net loss for the same period was $4.94 billion. By the first quarter of 2026 alone, the net loss had reached $4.28 billion on $4.69 billion in revenue.
Anthropic Deal Reveals Who Is Actually Underwriting xAI's Infrastructure
One of the more striking disclosures in SpaceX's June 1 updated prospectus is a Cloud Services Agreement with Anthropic, signed in May 2026, giving the AI safety company access to Colossus compute capacity at $1.25 billion per month through May 2029. The total contract value is approximately $45 billion, with either party able to terminate on 90 days' notice.
The S-1 acknowledges the arrangement's competitive complexity directly: Anthropic is simultaneously a customer of SpaceX's compute infrastructure and a direct competitor to xAI's Grok model in the frontier AI market. On June 1, 2026 — one day before this article — Anthropic filed its own confidential IPO prospectus with the SEC, joining SpaceX and OpenAI in the race to public markets. The arrangement reflects how rapidly the boundaries between AI companies, infrastructure providers, and launch operators are dissolving — but it also means that a significant portion of the revenue projected to flow from the Colossus data center depends on a relationship that can be cancelled in three months.
Governance: One Person Controls Everything
SpaceX's dual-class share structure gives Musk 85.1 percent of combined voting power through Class B shares that carry 10 votes each, per the S-1. He will serve simultaneously as CEO, CTO, and chairman following the listing. SpaceX qualifies as a controlled company under Nasdaq rules and has opted out of the exchange's requirements for an independent board.
Harvard Law School professors Lucian Bebchuk and Kobi Kastiel published a formal analysis concluding that SpaceX has "poor governance arrangements which would have considerable adverse effects on public investors" and gives Musk "substantial value at the expense of public investors." A separate Morningstar governance review, published May 28, documented weak investor protections and multiple conflicts of interest in the offering documents and described the board as friendly to Musk and not answerable to IPO share owners.
The Alliance to Protect Shareholder Value, a coalition that emerged in response to the SEC's forced arbitration policies, stated that SpaceX has "snuck outrageous provisions" into its IPO filing, including forced arbitration clauses and severe limits on derivative actions that it says would strip investors of standard legal recourse.
How Can Retail Investors Buy SpaceX IPO Shares?
Up to 30 percent of SPCX shares are being earmarked for retail investors — roughly three times the standard allocation in a major IPO. SpaceX CFO Bret Johnsen described retail participation as "a critical part of this and a bigger part than any IPO in history." Shares will be available through Charles Schwab, Fidelity, Robinhood, SoFi, and Morgan Stanley's E*TRADE platform at the IPO price, simultaneously with institutional buyers — a structural departure from standard practice, where retail investors typically must buy in the open market at a premium after institutions have set the floor. More detail on access by platform is available, with Schwab requiring a minimum account balance of $100,000 to participate. Demand for SPCX is expected to substantially exceed the retail allocation; investors should expect partial fills or no allocation despite submitting requests.
The American Federation of Teachers, representing 1.8 million members, wrote to SEC Chair Paul Atkins in May 2026 asking the regulator to apply "extraordinary scrutiny" to the offering and warning that millions of retail investors and pension fund beneficiaries could be steered into an "overvalued, high-risk bet." The union also flagged Nasdaq's accelerated index inclusion rule changes that could force passive funds to purchase SPCX shares within 15 trading days of listing, generating $8 billion to $12 billion in mandatory passive demand regardless of price.
What Comes After June 12
The SpaceX listing does not exist in isolation. Both OpenAI and Anthropic have now filed confidentially with the SEC, with OpenAI targeting a September 2026 public debut and Anthropic — which filed its own confidential prospectus on June 1 — closely behind. The sequential demand on institutional capital is material: investors who allocate to SPCX at a $1.75 trillion valuation will need to retain capacity for two additional large-scale AI company listings before year-end.
Morningstar noted that "Max Q" — the moment of maximum structural pressure — for SPCX will come in the months following the IPO, when successive tranches of stock held by private investors and employees become available for sale. The initial 180-day lockup for insiders is expected to expire around December 2026.
ARK Invest, led by Cathie Wood, holds a more optimistic view, projecting SpaceX could reach a $2.5 trillion enterprise value by 2030, calling the $1.75 trillion IPO target "grounded in a plausible trajectory" for Starlink, Starship, and orbital AI combined. That projection implies roughly 38 percent annual growth in enterprise value from the IPO price. Morningstar does not share that optimism: its analysts wrote that investors should wait for the shares to trade down to a more attractive level before buying, noting that a valuation above $1.5 trillion makes the stock "very likely" to appear overvalued under almost any near-term scenario.
The roadshow runs through June 11. Pricing is expected that evening. SPCX shares are set to begin trading on Nasdaq on Friday, June 12, 2026.
Frequently Asked Questions
Is the SpaceX IPO a good investment?
Morningstar, one of the few independent research firms to publish a formal valuation ahead of the roadshow, values SpaceX at $780 billion — less than half the $1.75 trillion IPO target — and recommends that long-term investors wait for what it expects to be more attractive entry prices after the offering. SpaceX's only profitable segment is Starlink; the AI and launch businesses collectively lost billions in 2025, and xAI is projected to burn $10 billion in 2026 alone.
How can retail investors buy SpaceX IPO shares?
Retail investors can request SPCX shares through Charles Schwab (minimum account balance of $100,000 required), Fidelity, Robinhood, SoFi, and Morgan Stanley's E*TRADE ahead of the June 11 pricing date. SpaceX is reserving up to 30 percent of its shares for retail buyers — triple the standard allocation — but demand is expected to far exceed supply, meaning many investors will receive partial fills or no shares at all.
What does the xAI merger mean for SPCX investors?
The February 2026 all-stock acquisition of xAI transformed SpaceX from a launch and satellite company into a combined AI infrastructure and space entity. xAI lost $6 billion in 2025 and is expected to burn $10 billion in 2026, and its Grok chatbot faces direct competition from OpenAI and Anthropic. Morningstar has called xAI a "material threat of value destruction" with an indeterminate competitive moat.
Is SpaceX profitable?
SpaceX is profitable at the segment level only through Starlink, which generated $4.4 billion in operating income in 2025. The consolidated company recorded a $4.94 billion net GAAP loss for full-year 2025 and a $4.28 billion net loss in the first quarter of 2026 alone, driven by xAI infrastructure spending and Starship development costs.
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