The $1.75 Trillion Question: SpaceX Targets the Largest IPO in History – But Is It Worth It?

**Subtitle:** *From a $4.95 billion loss to a 5.6 million barrel Starlink cash cow, Elon Musk is daring Wall Street to bet on his interplanetary vision. Here is what the insiders are saying before the June 12 debut.*

**Reading Time:** 8 Minutes | **Category:** Markets & Technology

## Introduction: The Launchpad Is Ready

On June 12, 2026, a company that has been called the most important startup of the 21st century will finally open its books to the public. After more than two decades of private operation, SpaceX will begin trading on the Nasdaq under the ticker symbol SPCX .

The numbers are staggering. The company is targeting a raise of **$75 billion** by offering 555.5 million shares at **$135 each** . That would give SpaceX an enterprise value of approximately **$1.75 trillion** . To put that in perspective, it would surpass Tesla, which currently has a market cap of about $1.6 trillion . It would make Musk, who controls over 80% of SpaceX's voting power, the world's first trillionaire .

But here is the rub. SpaceX lost **$4.95 billion** last year and another **$4.27 billion** in the first quarter of 2026 alone . While revenue is growing (up 15.4% to $4.69 billion in Q1), expenses are exploding. Research and development costs surged 125.7% to $3.51 billion in the first quarter, driven by AI infrastructure spending .

The IPO is coming at a moment of peak divergence. On one side, analysts at Morningstar have valued SpaceX at just **$780 billion** — less than half the IPO target . On the other side, Oppenheimer is raising its Starlink subscriber forecasts and talking about a $1.6 trillion disruption of the telecom industry .

In this deep-dive, we will unpack the numbers that matter, explore the Starlink engine that is keeping the lights on, and warn you about the "Grok-shaped hole" in the balance sheet — the legal and financial risks of the AI business that Musk has folded into the rocket company.

> **The Bottom Line Up Front:** The SpaceX IPO is not a bet on rockets. It is a bet on Elon Musk. Whether that bet pays off depends entirely on whether you believe Starlink can conquer global telecom, whether xAI can survive its legal scandals, and whether the "cult of Elon" can sustain a trillion-dollar valuation long after the retail hype fades.

## Part 1: The Prospectus Revealed – How SpaceX Makes (and Loses) Money

For the first time in its history, SpaceX has opened its finances to public scrutiny. The picture is one of a company caught between two worlds: a profitable connectivity business and a money-bleeding AI and space exploration division .

### The Three Segments

The SEC filing breaks SpaceX into three operating segments: Space, Starlink (Connectivity), and AI (xAI) .

| Segment | Q1 2026 Revenue | Q1 2025 Revenue | Change | Profitability |

| :--- | :--- | :--- | :--- | :--- |

| **Connectivity (Starlink)** | ~$3.5B (est) | ~$2.7B | +$782M | **Profitable** |

| **AI (xAI/Grok)** | ~$200M | ~$109M | +$91M | Deeply Unprofitable |

| **Space (Launches)** | ~$1.0B | ~$1.25B | -$246M | Loss-making |

*Sources: *

**The Space Segment** – This includes Falcon 9 and Starship launches for NASA, the Department of Defense, and commercial customers. Revenue fell by $246 million in Q1 due to "lower Launch Services missions and timing of work for government contracts" . This is the most volatile segment, dependent on the government's launch cadence.

**The Connectivity Segment** – This is Starlink, the satellite internet service that has become the company's cash cow. Revenue jumped by $782 million in Q1 as the subscriber base grew to **10.3 million** users . Starlink generated approximately **$4.4 billion in operating income** last year . This is the engine that is funding everything else.

**The AI Segment** – This is xAI, the home of Grok and the Colossus supercomputer. Revenue grew modestly to about $200 million in Q1, driven by X subscriptions and Grok API calls . But the costs are staggering. R&D expenses in the AI segment alone increased by $1.47 billion in Q1, driven by "depreciation of GPU hardware, and the cost of cloud computing and data center infrastructure" .

### The Losses That Should Terrify You

The headline numbers are not pretty.

| Period | Revenue | Net Loss | Loss Margin |

| :--- | :--- | :--- | :--- |

| **Full Year 2025** | $18.7B | -$4.95B | -26% |

| **Q1 2026** | $4.69B | -$4.27B | **-91%** |

*Sources: *

The company's net loss in the first quarter of 2026 almost matched its entire 2025 loss in just three months. Total costs and expenses surged to $6.63 billion from $4.04 billion a year earlier .

Where is all the money going? Capital expenditure nearly doubled to **$20.7 billion** last year as SpaceX poured money into AI projects, massive data centers, and computing infrastructure . The company is essentially betting that the AI boom will be so massive that the infrastructure spend will pay for itself.

### The Addressable Market Fantasy

SpaceX believes its total future addressable market could eventually reach **$28.5 trillion**, with much of that linked to AI applications and space-enabled services . This is the number that supporters will cite. This is also the number that skeptics will laugh at.

To put $28.5 trillion in perspective, it is roughly the size of the entire U.S. GDP. SpaceX is effectively claiming that it could one day be as big as the entire American economy. That is not a forecast. It is a fever dream.

**The Human Touch:** For the retail investor, the prospectus is a Rorschach test. Bulls will see Starlink's $4.4 billion in operating income and imagine a world where that number doubles every few years. Bears will see the $4.27 billion quarterly loss and the $20.7 billion annual capex and imagine a world where the company burns through cash long before it reaches Mars. Both are right. The truth lies somewhere in between.

## Part 2: Starlink – The $1.6 Trillion "Telecom Killer"

If there is a rational case for SpaceX's valuation, it rests on Starlink. The satellite internet service is no longer a science experiment. It is a mature, growing, and increasingly dominant business.

### The Numbers That Matter

Oppenheimer, in a bullish note released ahead of the IPO, raised its 2030 Starlink U.S. broadband user forecast from 10 million to **15 million** . The firm argues that Starlink's impact will eventually extend beyond satellite broadband to include traditional broadband, cable television, mobile phone service, and enterprise communications.

The total addressable market for U.S. communications services is approximately **$1.6 trillion** . Starlink is currently a small player. But its growth trajectory suggests it could become a major disruptor.

Starlink's operating income of $4.4 billion last year is based on 10.3 million subscribers . If Oppenheimer is right about 15 million U.S. subscribers by 2030, plus millions more internationally, the profit potential is enormous.

### The Threat to Telecom Giants

Oppenheimer specifically named AT&T, Verizon, and T-Mobile as potential losers from Starlink's expansion . The firm warns that these companies "may face faster user and revenue declines" as Starlink gains traction.

Why is Starlink so threatening? Because it can reach customers that terrestrial providers cannot. Rural areas with poor broadband coverage are Starlink's sweet spot. And as the constellation grows, latency improves, and prices drop, urban customers may also defect.

Starlink's technology is also improving. The company has been launching newer satellites with increased capacity. The average revenue per user is relatively stable, and churn rates are low .

### The Valuation Anchor

Morningstar's discounted cash flow model valued SpaceX's core rocket launch and Starlink satellite business at **$611 billion** . That is the anchor. The remaining $170 billion of Morningstar's $780 billion fair value estimate comes from the AI business, based on a "probability-weighted scenario" .

Even the skeptics acknowledge that Starlink is a valuable business. The debate is about whether it is valuable enough to justify the rest of the valuation.

**The Human Touch:** For the telecom executive at AT&T, Starlink is a genuine threat. For the rural homeowner who finally got high-speed internet because of a satellite dish on their roof, it is a miracle. The IPO will force investors to decide which narrative dominates.

## Part 3: The xAI Gamble – A $500 Billion "Moonshot" or a Legal Time Bomb?

The most controversial part of the SpaceX story is the AI business. Musk merged xAI into SpaceX earlier this year, and the AI segment is now a core part of the IPO .

### The Colossus Spending

SpaceX has committed to investing **$500 billion** in AI, including the Colossus supercomputer in Memphis and the Grok language model . Capital expenditures nearly doubled to $20.7 billion last year, with much of that going to AI infrastructure .

The hope is that Grok will eventually compete with OpenAI's ChatGPT and Anthropic's Claude. But in Morningstar's assessment, "Grok is not a leading AI lab." Adding AI to the valuation model did not materially increase or decrease the fair value estimate .

In other words, even the skeptics are giving Musk credit for the AI business. But they are not giving him much.

### The Legal Nightmare

Here is the part of the story that the prospectus cannot hide but the marketing materials will try to obscure.

xAI is facing a growing number of legal challenges related to Grok's ability to generate sexually explicit and non-consensual deepfake images.

Just days before the IPO, British Labour MP Jess Asato filed a lawsuit against xAI, alleging that Grok was used to generate a fake sexualized image of her . Her law firm, AWO, stated that this is "one of the first cases to test the design responsibility of AI systems" and that the goal is to force xAI to stop further violations .

The UK lawsuit is not isolated. In March 2026, the city of Baltimore sued xAI, alleging that Grok's ability to generate fake sexualized images violates local consumer protection laws . Multiple countries are investigating the platform for similar reasons.

### The Governance Risk

Morningstar also raised concerns about Musk's control. Through a dual-class share structure, Musk will hold approximately **82-85% of voting rights** after the IPO . That means public shareholders will have virtually no say in how the company is run.

Morningstar also flagged potential conflicts of interest in the xAI merger, suggesting that the terms may favor Musk over other shareholders .

**The Human Touch:** For the ESG investor, the xAI legal troubles are a red flag. For the Musk loyalist, they are noise — a distraction created by the establishment to slow down progress. The IPO prospectus lays out the risks. Whether you care about them is a matter of personal conviction.

## Part 4: The Valuation War – $1.75 Trillion vs. $780 Billion

The range of opinions on SpaceX's value is so wide that it is almost comical.

### The Bulls: Cathie Wood and the "Modern East India Company"

Cathie Wood's ARK Invest projects a **$2.5 trillion enterprise value by 2030** . Oppenheimer has described SpaceX as a "modern space-age East India Company" that could control the "new frontier's shipping lanes, infrastructure, and commercial activities" .

The bull case rests on three pillars:

| Pillar | Projected Value |

| :--- | :--- |

| **Starlink disruption** | $1.6 trillion telecom market |

| **Mobile market entry** | $500 billion smartphone market |

| **Space infrastructure** | Orbital data centers, manufacturing |

*Sources: *

SpaceX has hinted at entering the smartphone market, with the goal of eventually replacing traditional devices . If successful, that would open up an additional $500 billion market.

### The Bears: Morningstar and the "Avoid This IPO" Warning

Morningstar analyst Nicholas Owens was blunt: "The company is significantly overvalaged. Investors will have opportunities to purchase shares at more attractive prices after the IPO" .

Morningstar's $780 billion fair value is based on three scenarios for the space data center business :

| Scenario | Valuation | Probability |

| :--- | :--- | :--- |

| **"Moonshot"** | $1.3 trillion | 7% |

| **Base Case** | $780 billion | 50% |

| **"No Go"** | Value destruction >$81B | 43% |

Even the base case relies on a probability-weighted view of the AI business. The most likely outcome, according to Morningstar, is that the AI ventures do not pan out.

### The Middle Ground: Owning the Float

One thing both sides agree on: the stock will likely rise immediately after the IPO. The float is limited. Retail interest is enormous. And the stock could be added to the Nasdaq 100 just 15 trading days after listing .

The divergence is about the long term. Morningstar expects the stock to eventually fall as locked-up shares are released. The bulls expect the Musk magic to continue.

## Part 5: The Road Ahead – What to Expect on June 12

The IPO is scheduled for June 12 . Here is what we know about the mechanics.

### The Lock-Up Trap

One of the most important details for potential investors is the lock-up period. Existing shareholders, including employees and early investors, will have multiple windows to sell their shares beginning later this year and into 2027 .

Morningstar warns that the stock may face "selling pressure" once these lock-ups expire and the initial hype fades. The company will report earnings in July and October, and those reports will be the first real test of whether the business can support the valuation.

### The Nasdaq Inclusion

If the IPO is successful, SpaceX is expected to be added to the Nasdaq 100 index within 15 trading days of listing . That would trigger automatic buying from index funds, providing additional support for the stock price.

### The AI Overhang

The xAI legal issues will not be resolved by June 12. The lawsuits in the UK and the US will continue, and the outcomes are uncertain. Investors should expect volatility related to these cases.

### The Elon Factor

Finally, there is the Elon factor. Musk will control over 80% of the voting power. That means he can do whatever he wants. He can double down on AI. He can spin off Starlink. He can take the company private again. Public shareholders will be along for the ride, whether they like it or not.

**The Human Touch:** For the retail investor, the decision to buy SpaceX stock is not a financial calculation. It is a statement of faith. The numbers do not support a $1.75 trillion valuation. The legal risks are real. The losses are mounting. But none of that matters if you believe that Elon Musk is the most visionary entrepreneur of his generation and that he will, somehow, find a way to turn the $28.5 trillion addressable market into reality.

## Frequently Asked Questions (FAQ)

**Q: When will SpaceX stock start trading?**

A: SpaceX is expected to begin trading on the Nasdaq on **June 12, 2026**, under the ticker symbol SPCX .

**Q: What is the IPO price?**

A: SpaceX has set an estimated IPO price of **$135 per share**, which would value the company at approximately $1.75 trillion . This is an unusual move; companies typically only share an estimated sell price the day before trading begins .

**Q: How much money is SpaceX trying to raise?**

A: SpaceX is aiming to raise **$75 billion** by offering 555.5 million shares, which would make it the largest IPO in history, surpassing Saudi Aramco's $25.6 billion raise in 2019 .

**Q: Is SpaceX profitable?**

A: No. SpaceX lost **$4.95 billion** in 2025 and another **$4.27 billion** in the first quarter of 2026 . Revenue grew 15.4% to $4.69 billion in Q1, but expenses surged even faster, driven by AI infrastructure spending .

**Q: What are the main businesses within SpaceX?**

A: SpaceX operates in three segments: **Space** (rocket launches), **Starlink** (satellite internet), and **xAI** (artificial intelligence, including Grok). Starlink is the only profitable segment, generating approximately $4.4 billion in operating income last year .

**Q: What is Morningstar's valuation of SpaceX?**

A: Morningstar has set a fair value estimate of **$780 billion** for SpaceX, less than half the company's $1.75 trillion IPO target. The firm warns investors to "avoid this IPO" and wait for more attractive prices after the lock-up periods expire .

**Q: What are the legal risks facing SpaceX's AI business?**

A: xAI is facing multiple lawsuits over Grok's ability to generate non-consensual deepfake images. British MP Jess Asato has sued, as has the city of Baltimore. Multiple countries are investigating the platform .

**Q: How much control will Elon Musk have after the IPO?**

A: Musk will control approximately **82-85% of voting rights** through a dual-class share structure. Public shareholders will have virtually no say in company decisions .

## Conclusion: The Cult of Elon Goes Public

We started this article with a number: **$1.75 trillion**. That is the valuation Elon Musk is asking the public to assign to his rocket company.

We end with a different number: **$4.27 billion**. That is how much money SpaceX lost in the first three months of 2026.

The gap between those two numbers is the gap between reality and belief. It is the gap between what SpaceX is today—a money-losing conglomerate with one profitable division and two speculative ones—and what Musk promises it will become: the dominant force in global telecom, AI, and space infrastructure.

Morningstar says the stock is worth $780 billion. Cathie Wood says it is worth $2.5 trillion. The truth, as always, will probably land somewhere in the middle.

But for the retail investor looking at the IPO prospectus, the question is not whether SpaceX will succeed. It is whether the price is right.

**For the Investor:**

If you believe in Musk's vision and have a long time horizon, the IPO is a chance to buy a piece of history. But be prepared for volatility. The stock will likely jump on the first day, driven by retail hype and index fund buying. Then it will fall when the lock-ups expire and the reality of the losses sets in. The smart money is waiting for that dip.

**For the Skeptic:**

The numbers do not lie. SpaceX is losing billions of dollars. The AI business is a legal liability. The valuation is detached from the fundamentals. This is a cult stock, not an investment. Stay away.

**For the Curious:**

The SpaceX IPO is the most fascinating financial event of the decade. It will tell us whether the "Musk premium" is permanent or whether the public markets are finally willing to say "enough." Watch the first week of trading. It will be a wild ride.

**The Bottom Line:**

SpaceX is launching the largest IPO in history on a foundation of losses, dreams, and one very profitable satellite internet business. Whether it succeeds or fails depends on whether you believe that Elon Musk can turn the $28.5 trillion addressable market into reality.

The rocket is on the pad. The countdown has begun. On June 12, we find out if the public is ready for liftoff.

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**#SpaceXIPO #ElonMusk #Starlink #xAI #IPO2026 #Investing #SpaceStock #SPCX**

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*Disclaimer: This article is for informational purposes only. It does not constitute financial advice. IPOs are inherently risky; past performance does not guarantee future results. Always consult a licensed professional before making investment decisions.*