SpaceX (SPCX) begins trading today at $135 per share, making its Nasdaq debut as the largest IPO in history – raising $75 billion and nearly tripling the $25.6 billion record Saudi Aramco set in 2019. At a $1.77 trillion valuation, it immediately ranks among the most valuable listed companies on earth.
The first thing investors should understand is that this is not a rocket company at $135. At a price-to-sales ratio above 90x on 2025 revenues, the market is pricing in Starlink becoming a global communications monopoly, xAI competing with OpenAI, Starship becoming operational at scale, and defence contracts expanding – simultaneously, over decades.
That is an extraordinary amount of certainty about an uncertain future.
The Financial Numbers Behind the Hype
The numbers in the prospectus deserve close attention because they paint a more nuanced picture than the headlines suggest. SpaceX reported $18.674 billion of 2025 revenue alongside a $4.937 billion net loss and a $2.589 billion operating loss, though adjusted EBITDA came in at $6.584 billion.
The gap between those two figures is not accounting smoke and mirrors – it reflects real costs: stock-based compensation, satellite constellation depreciation, and the capital burn of building AI infrastructure.
The losses are almost entirely attributable to the xAI merger, which absorbed a business burning more than $6 billion per year. Before that deal, the legacy rocket-and-satellite operation was reportedly generating roughly $8 billion in annual profit.
So investors are effectively paying $1.77 trillion for a profitable infrastructure business that has been deliberately merged with a loss-making AI venture. The question is whether they are paying for Starlink’s cashflows or xAI’s potential – because right now, the former is funding the latter.
Starlink Provides the Strongest Part of the Investment Case
The Starlink numbers, however, are very impressive. The satellite internet arm generated over $11 billion in revenue in 2025 with over 30% operating margin, while subscriber count hit 10.3 million in the first quarter of 2026, up 105% year-on-year.
That is not a startup dressed up in a pitch deck. That is a real infrastructure business with growing pricing power and meaningful barriers to entry.
The problem is that Starlink’s success is already fully visible. At 90x sales, the market has priced it in and then some.
Sean Peche, portfolio manager at Ranmore Fund Management, draws a pointed parallel to Pfizer. Investors who bought the pharmaceutical giant before its most transformative drug cycles would have seen a total return of minus 26% over 28 years. “The maths of overpaying for growth and quality can be very destructive to your wealth,” he says, warning that growth rates “usually falter for some unexpected reason at some point – and when they do, the de-rating can often be worse than feared.”
Governance and IPO Structure Raise Questions
The IPO’s structure is also unusual in ways that matter for near-term trading. Musk originally discussed allocating up to 30% of shares to retail investors, at least three times the 5-10% typical in standard offerings, though that was later trimmed to around 20%.
A retail-heavy register in a low-float mega-cap creates conditions for extreme first-day volatility in either direction.
SpaceX’s dual-class structure gives Musk roughly 85% of total voting power despite minimal Class A holdings, with major pension funds already expressing concerns. As Ismael Garcia Puente of MAPFRE AM observes, investors are essentially buying a company whose core business remains launching satellites – its AI and technology segments are still operating at a loss, and their long-term profitability has yet to be demonstrated.
Senator Elizabeth Warren has already urged the SEC to delay the offering, arguing the valuation outruns the financials, the dual-class structure concentrates too much power in Musk, and fast index inclusion could force retirement and index funds to buy SPCX whether their underlying holders chose to or not. A senator’s letter does not stop an IPO, but the governance concerns are real.
Exceptional Business, Demanding Valuation
SpaceX has unquestionably built something extraordinary. Its launch economics are structurally ahead of any competitor, Starlink is growing in a way that few infrastructure businesses manage, and the Colossus data centre securing contracts worth billions annually shows the AI infrastructure ambition is not simply theoretical.
But extraordinary businesses can still be poor investments at the wrong price. The valuation on offer today assumes years of near-perfect execution across segments that do not yet exist at scale.
For value-oriented investors, the risk-reward profile at 90x sales looks difficult to justify – and the combination of a loss-making AI business, dual-class governance, and a retail-heavy register creates the conditions for significant downside if any single pillar of the thesis disappoints.
The real test for SpaceX will not be today’s opening trade. It will be whether the market still supports $1.77 trillion once the excitement fades and the quarterly earnings cycle begins.
