$1.75 Trillion for a Rocket Company? Morningstar Says Musk's Math Is Off by Half

The Number That Doesn't Add Up

SpaceX is seeking to raise $75 billion at a $1.75 trillion valuation, a figure that would eclipse every previous U.S. public offering and instantly place it among the ten most valuable publicly traded companies in America. But here's the thing about numbers this big: they start to lose all meaning until someone with a calculator shows up to the party.

That someone is Morningstar. The research firm 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.

The math is brutal. 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 makes Tesla's peak 2021 trading look conservative by comparison.

Musk Rewrites Wall Street's Playbook

The decision to publish a price before the traditional investor feedback process marks another example of Musk rewriting long-standing Wall Street conventions. SpaceX has largely skipped that step. For many investors, the message is clear: SpaceX is setting the terms.

Take it or leave it. No negotiation. Typically, at this stage of the process, new issuers will offer a price range that allows a company and its advisers to gauge demand sensitivity at different levels. In this case, SpaceX took a more unique approach after a slew of testing-the-waters meetings leading up to the roadshow launch.

Even Goldman Sachs, the lead underwriter, is rationing access. One institutional investor said Goldman Sachs informed him that SpaceX allocations were effectively a "David Solomon level decision," referring to the bank's chief executive. When Goldman's own CEO has to personally approve who gets shares, you know demand has detached from gravity.

The Only Thing Making Money Is Starlink

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. Let's pause on that. The company asking for a $1.75 trillion valuation has exactly one profitable business line.

Morningstar's specific concern about xAI poses a "material threat of value destruction" and that its competitive position relative to OpenAI and Anthropic leaves its "economic moat indeterminate." "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 wants 94 times.

The Retail Experiment

SpaceX is considering allocating up to 30% of the offering to retail investors, an unusually large share for individual buyers. The strategy reflects Musk's massive global following and could create one of the broadest ownership bases ever seen in a major technology IPO.

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. But remember: just because you can buy something doesn't mean you should.

The Coming Reality Check

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.

That's when the real price discovery begins. Not during this week's carefully choreographed roadshow, but when actual sellers meet actual buyers in December.

Morningstar 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 Bottom Line

SpaceX deserves credit for revolutionising space flight and satellite internet. But at 94 times revenue? That's not investing, it's speculation with a SpaceX logo.

At the $135 per share price tag, SpaceX would be valued at $1.77 trillion. SpaceX is set to be the biggest IPO ever, more than triple the size of Alibaba. Sometimes being biggest doesn't mean being smartest.

The roadshow continues through June 11. Trading starts June 12. My prediction: the first quarter of public trading will teach a lot of retail investors an expensive lesson about the difference between Elon Musk's vision and market fundamentals.