A fleet of Tesla Cybertrucks sits outside the Starbase construction site at SpaceX’s South Texas Test Facility on February 6, 2026.
Reginald Massalone | Null Photo | Getty Images
SpaceX is expected to begin trading on the Nasdaq in just over two weeks, but Morningstar analysts warn that Elon Musk’s tech giant is “significantly overvalued.”
The long-awaited debut is expected to be the largest initial public offering in history, with SpaceX reportedly targeting $75 billion in funding and a $1.75 trillion valuation.
“We believe the company is significantly overvalued and investors have an opportunity to buy the stock at more attractive levels post-IPO,” Morningstar analysts said in a note issued Monday.
Analysts see a wide range of potential profitability for SpaceX’s xAI, calling its “economic moat uncertain.” They see the sector as posing a “significant threat of value destruction” to the company.
As a result, Morningstar’s discounted cash flow valuation for SpaceX is $780 billion, about 48% lower than its private market valuation of $1.5 trillion.
Morningstar said the upcoming IPO is not the best entry point for retail investors. However, long-term investors who want to participate in the company’s potential future success will have more opportunities in the future, with a “greater margin of safety” than during the flotation, the analysts added.
“Given its small initial float by nearly every investment bank on the planet, strong investor appetite for AI infrastructure bids, and its unprecedented path to inclusion in the Nasdaq 100 index just 15 business days after its IPO, we expect SpaceX’s stock price to likely survive the separation and potentially rise, at least temporarily,” Morningstar said.
SpaceX posted a net loss of $4.28 billion in its latest quarter, after posting a net loss of $4.94 billion in 2025.
The company’s Starlink division generated $3.26 billion in revenue in the latest quarter, accounting for 69% of the total. The company’s space business posted an operating loss of $619 million, and its AI division posted a $2.5 billion loss. So connectivity is the only profitable part of the company.
Importantly, SpaceX wrote in its S-1 filing that it has “recorded net losses in the past and may not be able to achieve profitability in the future.”
Much of its value will depend on the successful development of various “novel and untested” technologies, and SpaceX expects its AI products and services to “incur significant capital expenditures over many years” before they become profitable, the document said.
Dan Coatsworth, head of markets at AJ Bell, said “very little is known” about SpaceX’s financial position because it is a private company with 85% voting control controlled by Elon Musk. Mr Cotesworth warned that a potential risk to further upside was the possibility of eye-watering valuations.
“At a $1.75 trillion valuation, SpaceX would be valued at 67 times sales and triple Nvidia’s valuation based on past fiscal years and the most recent stock price,” he added. “This suggests SpaceX could be valued at more than a plate of Dauphinoise potatoes.”
Meanwhile, the topic of whether Musk could merge SpaceX and Tesla has resurfaced.
