The rocket company goes public Friday at a valuation bigger than China’s GDP-sized ambitions can yet justify, and the smart money is split.
SpaceX goes public Friday at a $1.77 trillion valuation, and not everyone is cheering. The rocket-and-AI company lost $4.3 billion last quarter while its banks pitch revenue forecasts in the trillions. Skeptics like Michael Burry say the math does not add up yet.
Picture the trading floor Friday morning. One of the most anticipated IPOs in history hits the tape, priced at $1.77 trillion, and somewhere a fund manager is staring at the S-1 thinking the same thing some of the loudest names in finance are saying out loud: where, exactly, is the money?
What Happened
SpaceX priced its IPO at a $1.77 trillion valuation and starts trading Friday. That number is more than four times the $400 billion the company was worth just 13 months ago.
The problem is what sits underneath it. SpaceX lost $4.3 billion in the first three months of the year while spending heavily on AI. Revenue came in at $4.7 billion and growing, but for context, Meta booked $56.3 billion in the same period and carries a $1.4 trillion valuation. So SpaceX is asking the market to pay more than Meta on a fraction of the revenue.
Several heavyweight investors are not buying the story. Michael Burry, the investor made famous in “The Big Short,” wrote that any pop in the stock after the IPO would “be on hype and technicals,” adding that nothing in the filing suggests it is worth $1 trillion, let alone $2 trillion.
The Backstory
To understand the skepticism, rewind to Twitter. When Musk prepared to buy the social platform for $44 billion in 2022, he pitched private investors that one of his companies would quintuple revenue past $26 billion and nearly quintuple its customer base by 2028.
It did the opposite. The renamed X saw ad revenue plunge 65 percent last year, and it was ultimately folded into SpaceX this year. That track record is now the lens through which skeptics read every new SpaceX projection.
Jim Chanos, the short-seller who called the 2001 Enron collapse, put it bluntly: “It really does feel very much a ‘don’t look at the man behind the curtain’ situation.”
The Plan
Here is the headline number SpaceX is selling. The company claims a total addressable market of $28.5 trillion, which it calls the largest “in human history.” That figure dwarfs China’s annual GDP by more than $8 trillion. It also depends on SpaceX proving it can put AI data centers in space and build factories on the moon.
The banks are amplifying the ambition. Goldman Sachs, leading the IPO, told a potential investor it expected SpaceX revenue to hit $474 billion in 2030, up from $18.7 billion last year. Morgan Stanley went further, projecting $3.4 trillion in revenue by 2040.
Not everyone on Wall Street is matching that energy. Morningstar called the IPO price “overvalued” and pegged fair value around $780 billion. Its analyst Nicolas Owens gave SpaceX a 7 percent chance of getting Starship to airplane-style reusability and proving space-based AI data centers are cheaper than the ones on the ground. His optimistic ceiling: $1.97 trillion.
The Business Model Angle
This is a story about valuation built on narrative rather than numbers, and it is one of the oldest plays in the book run at the largest scale ever attempted.
SpaceX has a real, compounding core. Reusable rockets cut launch costs, and that capability funds the frontier bets. The pattern entrepreneurs should study is the deliberate layering of a high-growth story (space AI, lunar factories) on top of mature infrastructure. Mature businesses buy credibility. New divisions buy the multiple. That is how you turn a $400 billion company into a $1.77 trillion one in 13 months.
The catch worth internalizing: a vision is a product you sell to investors, and the gap between your story and your income statement is debt you eventually repay. SpaceX earned the right to tell a 2040 story by delivering for two decades. Most founders try to sell the narrative before they have earned it. If you want the deeper breakdown of how the cash engine and the moonshot fit together, the full SpaceX business model is worth studying.
The Risk
The honest counterpoint is that the entire valuation now rests on AI, and the AI story keeps changing.
Musk only started talking about data centers in space last year, then doubled down in February after merging SpaceX with his AI company, xAI. In April, SpaceX agreed to buy AI coding startup Cursor for $60 billion, a market it was not previously in. Last month it struck a deal to sell computing power to Anthropic, and last week a similar one with Google.
Boosters called those deals tens of billions in fresh revenue. Chanos saw something else. He argued xAI is quietly shifting from building frontier models like Grok to becoming a “neocloud,” the industry term for selling raw compute to other AI firms. That matters because neocloud is a commodity business, and the market values commodities far lower than breakthrough tech. “The entire valuation rests on xAI’s progress,” he said.
Ross Gerber, whose firm Gerber Kawasaki actually owns SpaceX stock, summed up the leap of faith: “People are paying a trillion dollars for Elon.”
Quick Questions
Why is SpaceX valued at $1.77 trillion if it’s losing money?
The valuation is built on future projections, not current earnings. Banks forecast revenue reaching hundreds of billions by 2030 and trillions by 2040, betting on space-based AI and reusable rockets. Skeptics say those numbers are pure story for now.
Who thinks SpaceX is overvalued?
Michael Burry of “The Big Short” fame, short-seller Jim Chanos, and even shareholder Ross Gerber have raised flags. Research firm Morningstar called the IPO “overvalued” and put fair value closer to $780 billion, less than half the IPO price.
What is SpaceX’s $28.5 trillion TAM about?
It’s the company’s claimed total addressable market, which it bills as the largest in human history. It assumes SpaceX can put AI data centers in space and build factories on the moon. The figure is more than $8 trillion bigger than China’s annual GDP.
Is SpaceX an AI company now or a rocket company?
Increasingly both, and that’s part of the worry. After merging with xAI and buying Cursor for $60 billion, plus compute deals with Anthropic and Google, critics say the AI strategy is drifting toward commodity cloud services rather than frontier models.
The Business Model Analyst Take
The lesson for founders is not “narrative valuation is a scam.” It is the opposite. A credible vision can unlock capital your current numbers never could, and SpaceX is the most ambitious proof of that ever attempted. But the gap between your story and your income statement is real debt that comes due. SpaceX spent 20 years earning the right to sell a 2040 dream. The moment your frontier bet starts looking like a commodity, the story stops carrying the multiple. Sell the vision, but know exactly when you have to start delivering it.
