Morningstar values SpaceX at $780 billion, well below $1.8 trillion IPO target

Financial research firm Morningstar has initiated coverage of SpaceX with a fair-value estimate of $780 billion, a figure significantly lower than the company’s targeted initial public offering valuation of approximately $1.8 trillion. The report, released ahead of the planned listing later this month, suggests the aerospace and technology giant may be priced substantially above its intrinsic worth at the time of its public debut.

Analyst Nicolas Owens utilised a discounted cash flow model to value SpaceX’s core launch and Starlink satellite businesses at roughly $611 billion in enterprise value. An additional $170 billion was attributed to probability-weighted scenarios surrounding the company’s artificial intelligence operations. While the firm acknowledged the strength of these core segments, it concluded that the overall valuation does not align with the company’s current financial realities.

SpaceX demonstrated dominant market share in 2025, launching 83% of the mass sent to orbit from Earth and reducing launch costs per unit by more than 95%. Its Starlink division served as a primary cash engine, reporting 50% revenue growth to $11.3 billion and generating operating income exceeding $4.4 billion. Morningstar assigned the company a narrow economic moat, citing the cost advantages derived from reusable rockets and the extensive scale of its satellite constellation.

However, the valuation was tempered by uncertainties surrounding the recently acquired AI business, xAI, and governance structures. Morningstar modelled three scenarios for SpaceX’s plans to establish space-based data centres, assigning a 7% probability to a high-value moonshot case and a 43% probability to a failure scenario that could destroy more than $81 billion in value. The firm also flagged concerns regarding Elon Musk’s expected 85% voting control via a dual-class structure and the related-party nature of the xAI merger.

SpaceX is preparing to offer approximately 3% of its shares to the public, having raised capital through private rounds including a $250 billion deal in early 2026 to acquire xAI. Morningstar estimates the IPO will raise between $50 billion and $80 billion. While the firm expects the stock to hold up initially due to a small float and strong investor appetite, it anticipates selling pressure in subsequent months as lock-up periods expire, potentially offering long-term investors a more attractive entry point.