Morningstar says SpaceX is worth less than half its $1.75 trillion IPO valuation, pegs company at $780 billion

SpaceX is preparing for one of the most anticipated public offerings in history. Yet as excitement builds around the company’s planned Nasdaq debut, one major research firm is urging investors to pump the brakes.

Morningstar believes Elon Musk’s aerospace giant is worth about $780 billion, far below the $1.75 trillion valuation SpaceX is reportedly seeking in its IPO. The estimate places Morningstar among the few voices pushing back against the intense optimism surrounding the offering.

“Morningstar analysts pegged SpaceX’s valuation at $780 billion, less than half of what the Elon Musk-led company is reportedly targeting in its initial ​public offering, ahead of a planned roadshow this week,” Reuters reported.

The timing is notable. SpaceX is expected to begin its IPO roadshow this week ahead of a planned June 12 listing, according to previous Reuters reporting. Investor demand has been strong, fueled by the company’s dominance in commercial space launches, its fast-growing Starlink satellite internet business, and Musk’s growing ambitions in artificial intelligence.

Morningstar is less convinced.

Morningstar Questions SpaceX’s $1.75T IPO Valuation, Cites AI and Starlink Risks

The research firm said the economics of SpaceX’s AI efforts remain uncertain and face stiff competition from established players such as OpenAI and Anthropic. Questions around profitability, execution, and long-term adoption continue to hang over the sector despite surging investor enthusiasm.

“We don’t see Grok as one of the leading AI labs today,” said Morningstar equity analyst Nicolas Owens, referring to the chatbot developed by xAI.

Owens pointed to another concern: much of the long-term promise surrounding SpaceX’s AI strategy depends on technologies that have yet to prove themselves commercially. Among them are orbital data centers, a concept that has attracted growing attention but remains largely untested.

Morningstar’s skepticism extends beyond AI.

The firm said Starlink, often viewed as one of SpaceX’s most valuable assets, still faces technical and operational challenges. Some of those obstacles may be outside the company’s direct control, adding another layer of uncertainty to future growth projections.

“We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO,” Owens said.

The assessment stands in sharp contrast to the broader market narrative surrounding SpaceX. The company was most recently valued at approximately $1.53 trillion on secondary marketplace Forge Global, and its reported IPO target would push that figure even higher.

Morningstar acknowledged that the stock could perform well in the near term after listing. A limited public float and strong backing from Wall Street’s largest investment banks could create favorable conditions for early trading.

Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup, and J.P. Morgan are among the banks underwriting the offering.

Still, Morningstar believes patient investors may be rewarded.

“Long-term investors eager to participate in SpaceX’s future endeavors and potential success will have opportunities to do so with a greater margin of safety than the initial offering is likely to provide,” Owens said.

For now, the debate comes down to a familiar question that accompanies nearly every blockbuster IPO: is the market pricing future potential, or getting ahead of itself?

Investors may soon find out.