SpaceX is about to take its Falcon 9-sized leap onto public markets this month, with Elon Musk pitching what could become the largest initial public offering in history.
But there’s a problem.
Morningstar just put a fair-value estimate on the company of $780 billion. That’s less than half of the roughly $1.8 trillion Musk is reportedly targeting.
In other words, one of the most respected research firms on Wall Street thinks SpaceX investors are about to overpay by something like a trillion dollars.
Here’s how Morningstar analyst Nicolas Owens broke it down in a research note this week, according to Yahoo Finance and CNBC.
What’s the company actually worth?
Owens used a discounted cash flow model — basically estimating future cash and discounting it back to today’s dollars. His number for SpaceX’s core businesses came out to about $611 billion.
That covers the launch business and Starlink. Both are real. Starlink alone hit $11.3 billion in revenue last year, growing 50% over 2024. And SpaceX launched 83% of the mass sent into orbit from Earth in 2025.
So the meat-and-potatoes side is genuinely impressive.
The problem? Musk recently merged xAI — his artificial intelligence venture — into SpaceX in a $250 billion related-party deal that wasn’t conducted at arm’s length. That bumped SpaceX’s private valuation to around $1.5 trillion.
Morningstar tacked on another $170 billion for the AI business in probability-weighted scenarios. But Owens flagged it as a possible drag, calling its prospects too uncertain to value with confidence and warning the AI bet poses a real risk of destroying shareholder value.
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The governance red flag
There’s another thing buried in the IPO documents worth flagging.
According to Morningstar, Musk would walk away with roughly 85% of the voting power through a dual-class share structure — even though only about 3% of SpaceX shares are being offered to the public.
In plain English: You get to bet on the company. He holds the steering wheel.
That’s not unusual for tech IPOs. Mark Zuckerberg has the same kind of setup at Meta. But it matters here.
If Musk decides to bet billions on space-based AI data centers — which Morningstar gave just a 7% chance of paying off — there’s not much anyone can do about it.
What investors should actually do
Here’s where I want to be direct.
I’ve watched these “biggest IPO ever” stories play out for 35 years. The pattern is depressingly consistent: hype, a first-day pop, lock-up periods that expire, insiders cash out, and the stock sags.
The Tesla parallel cuts both ways. Yes, Tesla is now worth more than $1.3 trillion. But anyone who bought it on hype rather than fundamentals has lived through some stomach-churning drawdowns along the way.
Morningstar’s advice for SpaceX is the same advice I gave readers about Facebook’s IPO years ago: Wait. Owens flatly says the company is “significantly overvalued” — and that patient investors will get better entry points after the post-IPO hype fades.
If you genuinely want a piece of Musk’s space empire — and there’s a real case that the underlying business is excellent — patience will probably reward you. Just make sure any single bet stays a small slice of a properly diversified portfolio.
Don’t be the person paying $1.8 trillion for $780 billion of business.
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