To The Moon

On May 20, SpaceX filed its IPO prospectus, with a listing date set for June 12.

Founded by Elon Musk, SpaceX operates three primary businesses: rocket launches, Starlink, and xAI.

Press reports peg the IPO raise at roughly $75 billion, with a post-listing market cap that could approach $2 trillion.

On deal size alone, SpaceX would shatter Saudi Aramco's $29.4 billion record from 2019 and become the largest IPO ever, while ranking as the seventh-most-valuable company in the U.S. market.

For a debut this closely watched, the question is whether day one offers a real investment opportunity.

What does SpaceX actually do?

The S-1 splits the company into three reporting segments:

Space - the well-known rocket launch business, with the U.S. government as its principal customer.

Connectivity - Starlink, providing satellite-based internet service to consumers.

AI - encompassing X, formerly Twitter, and xAI, monetized through advertising and compute leasing.

Looking at first-quarter 2026 revenue, Starlink dominates the mix at 69.4% of total revenue:

SpaceX Revenue by Segment

Financial performance

In 2025, SpaceX posted total revenue of $18.67 billion, up 33.2% year over year. In 1Q 2026, revenue reached $4.69 billion, a 15.4% YoY increase.

On the bottom line, SpaceX recorded a net loss of $4.94 billion in 2025 and a $4.28 billion loss in the first quarter of this year:

SpaceX Annual Revenue and Net Income/Loss

On growth, SpaceX is not particularly fast-moving - revenue growth runs in a 15%-35% band. On profitability, the company remains deep in the red.

By segment, the losses are concentrated in AI: in 2025, the AI business posted an operating loss of $6.36 billion, the launch business a small $0.65 billion loss, while Starlink generated $4.42 billion in profit:

SpaceX Operating Profit by Segment

Strip out xAI, in other words, and the financials would look meaningfully cleaner.

Is SpaceX's valuation reasonable?

Press leaks place SpaceX's post-IPO market cap somewhere between $1.75 trillion and $2 trillion. At the top end, that translates to a price-to-sales multiple of roughly 107x.

With no clean comparable, a side-by-side valuation check is hard to run.

But in my experience, two factors drive whether a high P/S multiple is justified: how fast the company is growing, and how high its net margin runs.

As a rule of thumb, a P/S above 20x is already on the expensive side.

NVIDIA, for example, is currently growing revenue around 85% with net margins near 60%, and trades at roughly 21x sales.

Looking at SpaceX's growth profile: the launch business is asset-heavy and depends on increasing launch cadence and payload mass, so it is unlikely to accelerate sharply. Call it steady, modest growth.

Starlink is also asset-heavy, but with nearly 10,000 satellites already in orbit, the infrastructure is largely built. From here, it is mostly a subscriber-acquisition story, and growth can run faster. Q1 of this year showed 32% YoY growth.

The AI business has the largest blue-sky narrative, but xAI's Grok is not winning against OpenAI or Anthropic.

The one bright spot is that SpaceX has inherited Tesla's industrial muscle. Applying Musk's first-principles playbook, it can stand up data centers extraordinarily quickly. xAI's COLOSSUS data center, for instance, came online in 122 days, against an industry average of roughly two years.

So even if Grok loses the model race, SpaceX can still earn meaningful revenue by leasing compute. Earlier this year, Anthropic signed a compute contract with SpaceX worth $1.25 billion per month over the next three years.

Once Starship enters routine service, its lift capacity makes solar-powered space data centers viable. Compared with terrestrial facilities, space offers continuous sunlight and ultra-low temperatures, which could meaningfully cut data-center operating costs.

And SpaceX is the only company in a position to build space-based data centers.

Revenue Growth Rate by Segment

On profitability, the only segment generating consistent operating profits today is Starlink, with a 36.5% operating margin - quite respectable. Launch sits near break-even, and AI is still bleeding heavily:

On the basis of current growth and current profitability, then, a 107x sales multiple is sky-high.

That said, Musk has set himself an aggressive equity-incentive package: if SpaceX's market cap reaches $7.5 trillion and a one-million-person Mars colony is established, he unlocks 1 billion shares.

$7.5 trillion in market cap and a million Mars colonists sound like fantasy. But back in 2018, Tesla also handed Musk an equally outsized package tied to market-cap milestones. Tesla's market cap was around $50 billion at the time, and the full unlock required reaching $650 billion.

Who would have guessed that Tesla's market cap today sits at $1.6 trillion.

Looking at the addressable market across SpaceX's businesses: launch is roughly $370 billion, Starlink-style connectivity around $1.6 trillion, and AI a staggering $26.5 trillion. That is a combined TAM of $28.5 trillion, easily large enough to support a multi-trillion-dollar company:

So while SpaceX may IPO at an expensive multiple, zoom out and most of the things Musk has promised, he has eventually delivered.

Given SpaceX's exceptionally high market interest and the unprecedented nature of its businesses, the IPO is likely to perform well on day one.

Investors can play the day-one volatility directly, or look at space-themed ETFs such as NASA, ORBX, DIPR, UFO, and UFOX as alternative exposures.

NASA in particular has nearly doubled since its late-March listing:

$Tema Space Innovators ETF(NASA)$ $Global X Space Tech ETF(ORBX)$ $Corgi Space & Satellite Communications ETF(DIPR)$ $Procure Space ETF(UFO)$ $DEFIANCE CONNECTIVE TECHNOLOGIES ETF(UFOX)$