Written by Romeo Kuok
The largest IPO in Wall Street history debuts today at a $1.78 trillion valuation. Retail orders exceed $100 billion. But Morningstar pegs fair value at $63 per share—less than half the offer price. Here’s how to navigate the frenzy.
The most anticipated public offering in Wall Street history has arrived. Today, SpaceX (SPCX) debuts on the Nasdaq, having priced its initial public offering at a fixed $135 per share. The numbers are staggering: a $75 billion capital raise, an implied market capitalization of $1.78 trillion, and a retail order book exceeding $100 billion.
Set against a macro backdrop of plunging oil prices and a 930-point Dow surge following the announcement of an Iran peace deal framework, the market environment is primed for a risk-on frenzy. However, as retail investors clamor for a piece of Elon Musk’s space and artificial intelligence empire, institutional skepticism is quietly building. A forensic analysis of the S-1 filing reveals a company characterized by breathtaking ambition, but equally breathtaking capital intensity and unprofitability.
The Disconnect Between Hype and Fundamentals
SpaceX is not being valued as an aerospace company; it is being valued as an artificial intelligence infrastructure monopoly. While the Starlink connectivity segment is profitable—generating $4.69 billion in the latest quarter—the broader enterprise is bleeding cash. The company reported a net loss of $4.28 billion through its latest quarter, following a $4.94 billion loss in 2025.
The primary culprit is capital expenditure. As SpaceX aggressively pivots toward building xAI data centers to service clients like Google (which is paying $920 million monthly for compute capacity), capex has exploded. In the most recent quarter, capex reached $10.1 billion, with $7.7 billion dedicated solely to AI.
As noted by Steve Eisman, the famed investor chronicled in The Big Short, the capital intensity trajectory is alarming. “If you go back to fiscal year 2023 and you compare revenue to capex, capex was only 42% of revenue, and in the most recent first quarter, it was 215% of revenue.” This ratio—spending $2.15 on infrastructure for every $1.00 of revenue generated—mirrors the exact dynamic that caused Oracle shares to slide 8.5% just yesterday.
SpaceX IPO at a Glance
| Metric | Detail |
| Ticker | SPCX (Nasdaq) |
| IPO Price | $135/share (fixed) |
| Shares Sold | 555.6 million |
| Capital Raised | $75 billion (largest IPO ever) |
| Market Cap | $1.78 trillion |
| Oversubscription | 4x (retail orders >$100B) |
| Net Loss (2025) | $4.94 billion |
| Capex/Revenue Ratio | 215% (latest quarter) |
The “Price-to-Elon” Premium
JonesTrading chief market strategist Mike O’Rourke succinctly described the SpaceX valuation as a “P/E — Price to Elon Ratio” trade. Investors are paying a massive premium for Musk’s vision rather than current fundamentals. At $1.78 trillion, SpaceX is trading at roughly 94x trailing revenue.
Morningstar analysts have aggressively pushed back against this valuation, issuing a fair value estimate of $63 per share—a 53% discount to the $135 IPO price. They argue that the $1.6 trillion combined revenue projection for Starlink’s mobile and broadband businesses is vastly overstated, placing realistic peak revenue closer to $129 billion.
Furthermore, the governance structure presents unprecedented risks for public shareholders. Musk retains 82% voting control through supervoting shares, combined with mandatory arbitration clauses and Texas corporate law protections that effectively strip minority shareholders of traditional recourse.
The Silent Winners of the SpaceX IPO
While buying SPCX at the open presents significant downside risk, the IPO creates massive structural winners elsewhere in the market.
The most obvious beneficiary is Alphabet (GOOGL). In 2015, Google invested approximately $900 million for a 7% stake in SpaceX. At the IPO valuation, that stake is now worth over $100 billion. Combined with Google’s 14% stake in Anthropic (which filed its own S-1 last week at a $965 billion valuation), Alphabet holds the most lucrative venture capital portfolio in corporate history.
Conversely, Tesla (TSLA) faces acute rotation risk. For years, institutional and retail investors used Tesla as a liquid proxy to gain exposure to the “Musk premium.” With SpaceX now publicly traded, capital is highly likely to rotate out of the mature EV manufacturer and into the hyper-growth space and AI conglomerate. IG market analyst Fabien Yip warned that “Tesla — long traded as a Musk proxy — faces rotation risk as investors gain direct SpaceX exposure for the first time.”
The Verdict
For disciplined investors, the SpaceX IPO is a spectacle to observe, not a vehicle to chase. The 215% capex-to-revenue ratio and the $63 Morningstar fair value estimate suggest severe post-IPO volatility once the initial retail euphoria subsides. The smart money is not buying SpaceX today; it is buying the companies that benefit from SpaceX’s existence regardless of where the stock trades.
Investment Verdicts
| Ticker | Verdict | Price Target | Rationale |
| SPCX (SpaceX) | SELL | $65 | 94x revenue, 215% capex/revenue ratio. Morningstar FV of $63 highlights massive hype-fundamentals disconnect. Wait for lock-up expiration. |
| GOOGL (Alphabet) | BUY | $220 | The ultimate hidden winner. 7% SpaceX stake worth $100B+, plus 14% Anthropic stake. Massive balance sheet expansion without operational risk. |
| TSLA (Tesla) | SELL | $145 | Severe rotation risk. Investors no longer need Tesla as a Musk proxy. Capital will flow from TSLA to SPCX. |
| RKLB (Rocket Lab) | BUY | $9.50 | Only viable publicly traded launch alternative. Microscopic fraction of SpaceX valuation while executing on Neutron rocket development. |
| ORCL (Oracle) | BUY | $285 | Fell 8.5% on capex fears, but $638B contracted backlog provides revenue visibility. A much safer AI infrastructure play than SPCX. |
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The opinions expressed are those of the author and do not reflect the views of Equities Orbis or its affiliates. Always conduct your own research before making investment decisions.
