Betting 50 years ahead: what analysts are saying about SpaceX's historic IPO

By filing documents for an IPO of unprecedented scale with the aim of a valuation of $1.75-2 trillion, Elon Musk has actually turned the perception of his business upside down, Bloomberg writes. From the published prospectus it became clear: investors are offered to buy not just a successful rocket company, but a global player in the artificial intelligence market, burdened with huge expenses for futuristic projects, the agency believes. Here is how the document is commented on Wall Street.

- "SpaceX is no longer a space company in the traditional sense," early SpaceX investor and Space Capital fund founder Chad Anderson told Yahoo Finance. - It's a vertically integrated AI company competing with hyperscalers and looking to control the entire stack." According to the prospectus, SpaceX values its total target market at a record $28.5 trillion, with only $370 billion of that amount coming from launches and other space services, $1.6 trillion from Starlink-based communications, and the remaining $26.5 trillion related to AI.According to Anderson, "investors aren't paying for today's business, they're paying for the platform that will own the orbital infrastructure for the next 50 years." The company has a lot of growth potential, he believes, and the IPO will be the catalyst for the next phase.

- Another investor in Elon Musk's company, VIDA Vision Fund manager Mike Alves, admitted that he was "shocked" by how aggressively SpaceX is pushing its AI capabilities. "For a rocket company, it's just crazy," Bloomberg quoted him as saying.

- The risk is not whether SpaceX is a real business - it obviously is. The risk is whether the $1.75 trillion valuation takes into account all the complexities of project implementation of a company that is simultaneously part rocket manufacturer, part Internet provider, part AI startup and yet is completely dependent on the vision of one man," said Josh Gilbert, an analyst at trading platform eToro. His opinion is quoted by Reuters. SpaceX described its risks in the prospectus on 38 pages. They include, for example, dependence on the pace of Starship rocket development, threats of space accidents and loss of orbital data centers, as well as geopolitical conflicts and business vulnerability in the event of Musk's own loss.

- "You can't justify a $1.75 trillion or $2 trillion valuation for SpaceX using traditional fundamental metrics alone," Reuters quoted Rainmaker Securities co-founder Greg Martin as saying. At the same time, he said, many investors believe that over time SpaceX could reach a value of $5 to $10 trillion.

In general, investors, analysts and fund managers - and Reuters spoke to 18 of them - are optimistic about the upcoming mega-placement. Many say the company's satellite and space businesses alone already justify a valuation close to $2 trillion.

Fears of some investors about excessive concentration of the market with the entry of SpaceX on the stock exchange will only intensify, writes BusinessInsider. It will immediately enter the number of the largest companies in the world by capitalization. The concentration of capital in the top 10 issuers could approach 50% if, as expected, not only SpaceX, but also AI giants OpenAI and Anthropic go public this year, warned Apollo chief economist Thorsten Slok.

This skewing of the market towards mega-corporations seriously increases volatility risks. Because of their enormous size, these companies can move the broader market when they rise or fall sharply. SpaceX's valuation will provide it with a huge weight on the stock exchange, which means that even passive index investors will directly face the fluctuations in its quotations, typical for the first months after going public, the publication believes.

In addition, because of the scale of SpaceX's public debut, it could deplete some of the liquidity in the market in the short term, BusinessInsider points out. The offering comes at a time when investors are already holding historically low amounts of cash - meaning they are almost fully invested in the assets, the publication points out. This could worsen the prospects for other large companies planning to go public this year.

On the longer horizon, SpaceX's listing, by contrast, could add liquidity to the market. It will free up huge amounts of venture capital that remained locked up while the companies were private, according to Ross Ference Carmel, a partner at Sichenzia Ross Ference Carmel, a law firm specializing in capital markets. "Venture capital and secondary markets have invested in SpaceX for over two decades. Hundreds of millions of dollars are about to become liquid and then will be used to support other companies in need of money - both public and private," he said.

This article was AI-translated and verified by a human editor