Morningstar drops bombshell message on SpaceX IPO

Morningstar drops bombshell message on SpaceX IPO Peace Longe Mon, June 8, 2026 at 1:03 AM GMT+7 6 min read The hype around SpaceX’s blockbuster IPO has been near-impossible to ignore. The company set a fixed price of $135 per share, is targeting a record $75 billion raise on the Nasdaq under the ticker SPCX, and is scheduled to debut on June 12, making it the largest initial public offering in history, more than double Saudi Aramco’s 2019 record of $29 billion. But one of Wall Street’s most respected independent research firms just issued a warning that investors should not overlook. Morningstar initiated its first-ever coverage of SpaceX this week and arrived at a fair value estimate of $780 billion, roughly 55% below the company’s $1.75 trillion IPO target. The firm’s lead equity analyst, Nicolas Owens, didn’t soften the message: “We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO,” CNBC reports. Owens built his valuation using a Discounted Cash Flow (DCF) model, a method that estimates a company’s value based on how much cash it is realistically expected to generate over time. A DCF model works backward from future projections, discounting them to reflect uncertainty; a higher uncertainty means a lower present value. He assigned SpaceX’s core launch business and Starlink satellite broadband unit a combined enterprise value of approximately $611 billion. The satellite internet division posted $11.3 billion in revenue in 2025, a 50% year-over-year increase, with operating income exceeding $4.4 billion, TradingKey reports. Related: Navellier to SpaceX buyers: wait for escape velocity Morningstar also gave SpaceX credit for its launch dominance. The company accounted for 83% of all mass sent to orbit from Earth in 2025 and has reduced launch costs per kilogram by more than 95%, Morningstar notes. Owens then applied probability-weighted scenarios to SpaceX’s AI segment, the one acquired through its all-stock merger with Elon Musk’s xAI company in February 2026. That deal was the largest corporate merger by valuation in history, creating a combined entity worth $1.25 trillion. The AI component added only $170 billion to Morningstar’s total, producing a blended fair value of $780 billion. The implication: Morningstar believes the market is pricing SpaceX’s AI ambitions far too generously, based on the actual evidence available today. xAI posted an operating loss of $6.36 billion in 2025, pulling SpaceX’s net loss for the year to $4.94 billion, despite $18.67 billion in combined revenue. Owens flagged orbital data centers, one of SpaceX’s headline AI ambitions, as carrying “high uncertainty regarding scientific and economic feasibility.” Morningstar concluded that it does not see Grok, xAI’s chatbot, as one of the leading AI labs competing against OpenAI and Anthropic today. At the $1.75 trillion IPO target, SpaceX would be trading at approximately 94 times its 2025 revenue of $18.67 billion, TechTimes reports. For context, Nvidia, one of the most profitable technology companies in the world, trades at roughly 22 times trailing revenue. Owens labeled SpaceX shares “overvalued in almost any scenario, at least in the near term.” He noted that sustaining a $1.75 trillion valuation through 2030 would require annual revenues exceeding $100 billion, with compound annual growth above 40%, according to Goldman Sachs data cited by TradingKey. Related: Blue Origin's explosion just made SpaceX even harder to catch ARK Invest, led by Cathie Wood, holds a far more optimistic view. Yahoo Finance previously reported that Wood projected SpaceX could reach a $2.5 trillion enterprise value by 2030, calling the IPO target “grounded in a plausible trajectory” for Starlink, Starship, and orbital AI. That is a direct disagreement between two credible sources, and investors need to decide which framework fits their risk tolerance. Morningstar’s concerns stretch beyond the balance sheet. Owens flagged Musk’s expected 85% voting control through a dual-class share structure, meaning retail investors who buy SPCX will have virtually no say in how the company is run. SpaceX’s long-anticipated IPO filing is out now, and it’s full of red flags Jim Cramer has bold new take on Elon Musk’s SpaceX IPO BofA raises red flag on SpaceX, OpenAI IPOs The xAI merger was also not conducted at arm’s length. Musk both negotiated and approved a deal that transferred his own AI company into SpaceX, a governance structure Morningstar flagged as a “material threat of value destruction.” Danish pension fund AkademikerPension placed SpaceX on its investment blacklist, stating that SpaceX’s governance structure is “catastrophic,” Bloomberg reports. Here is where Morningstar’s note becomes practically useful for ordinary investors. The firm acknowledged that SpaceX’s stock is likely to hold steady or even climb in the days immedi

Morningstar drops bombshell message on SpaceX IPO

Key takeaways

More in business