Morningstar, the Chicago-based investment research firm, challenged SpaceX’s reported IPO ambitions, valuing Elon Musk’s rocket and satellite company at $780 billion, far below the $1.75 trillion target.
The firm said SpaceX’s artificial intelligence outlook remains difficult to assess, with key parts of the business tied to xAI and the social media platform X still facing unclear economics and heavy competition from OpenAI and Anthropic, Reuters reported.
AI ambitions face skepticism
Morningstar equity analyst Nicolas Owens said xAI’s Grok chatbot has yet to establish itself among the strongest AI developers, even as investor enthusiasm around Musk-linked businesses remains high.
“We don’t see Grok as one of the leading AI labs today,” Owens said.
Owens also said some of the company’s longer-term AI plans depend on technologies that have not yet been proven, including orbital data centers.
Starlink, SpaceX’s satellite broadband unit, faces its own technical challenges, some of which may be beyond the company’s control, he added.
“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.
IPO demand may still support early gains
Morningstar said SpaceX shares could still rise in the near term because of a limited public float and support from major banks handling the IPO, including Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup and J.P. Morgan.
The company was last valued at $1.53 trillion on secondary trading platform Forge Global, while enthusiasm for the listing has remained high ahead of a planned roadshow this week.
Still, Owens said investors looking for long-term exposure to SpaceX may get a more attractive opening after the shares begin trading.
“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.
Musk’s space empire prepares for Wall Street
The valuation warning comes as SpaceX moves toward what could become one of the largest public listings ever.
The company has filed to list its Class A shares on Nasdaq and Nasdaq Texas under the ticker “SPCX,” giving public investors a potential entry into Musk’s rocket, satellite internet and artificial intelligence businesses.
The filing presents SpaceX as an integrated company spanning launches, Starlink connectivity and AI following its merger with xAI.
According to the filing, SpaceX said Starlink had about 9,600 broadband and mobile satellites in low-Earth orbit as of March 31, 2026, serving customers across 164 countries, territories and markets.
The company also framed AI as a core part of its next phase, saying its strategy leans on Grok, X and longer-term plans for orbital computing infrastructure.
SpaceX reported $18.67 billion in 2025 revenue, but also posted a $4.94 billion net loss for the year.