SpaceX IPO: overvalued? overhyped? Or a must-own when the entire SYSTEM may be buying it?
Does it matter what the "right" price is, if the entire index system is structurally forced to buy it on day 15 regardless? Lets have a look
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The SpaceX IPO is the most talked-about market event of 2026. Possibly of the decade.
The debate is loud. Overvalued. Overhyped. Once-in-a-generation. Must-own. You will find a credible analyst on every corner of that argument, and they will all have numbers to back it up.
But there is a question sitting underneath all of it that most of the noise is missing entirely.
Does it actually matter what the right price is — if the entire index system is structurally forced to buy it on day 15 regardless?
That is what we are working through at York right now. And that is what this article is about.
Not advice. Our framework.
What is SpaceX?
Founded in 2002, Space Exploration Technologies Corp. is not one business. It is three — and understanding each of them separately is the only way to have an honest conversation about this IPO.
It launches rockets. It runs the world's fastest-growing satellite broadband network. And following its acquisition of Elon Musk's artificial intelligence company xAI, effective 2 February 2026, it now operates one of the most ambitious AI platforms on the planet.
The IPO is targeting a valuation of $1.75–2 trillion. The raise is approximately US$75 billion. Ticker SPCX. Expected listing around 12 June on Nasdaq.
If it prices anywhere near that range, it is the largest public offering in history. Saudi Aramco's 2019 record is not close.
Here is what you are actually buying.
Segment 1: The Space business
SpaceX currently launches 83% of all mass sent to orbit globally — and by launch count, 51% of all orbital missions in 2025. Its nearest competitor by mass delivered to orbit is the Chinese state space agency. No other commercial provider is remotely close on cadence, cost, or reliability.
The engineering achievement that made this possible is reusability. The Falcon 9 booster has landed and reflown dozens of times. That has cut the cost per kilogram to orbit by roughly 95% compared to the previous generation of launch vehicles. It is not a marginal improvement. It is a structural reshaping of an entire industry's economics.
What you are buying in the space segment:
- Falcon 9 — the workhorse. Reusable, proven, and the most frequently launched orbital rocket in history. 51% of all global orbital missions in 2025.
- Starship — the next chapter. Designed to deliver 100 metric tons to orbit in a single launch with full reusability. Payload delivery to orbit targeted for H2 2026. SpaceX invested $3 billion in Starship R&D in 2025 and a further $930 million in Q1 2026 alone.
- Future markets — if Starship proves out, it unlocks orbital manufacturing, lunar logistics, space-based infrastructure, and the long-term Mars supply chain Musk has been engineering toward for two decades.
The space segment has been EBITDA positive on a sustained basis since 2018. The reinvestment rate is enormous — and it is Starlink that is currently funding most of it.
The bear case on this segment specifically:
- The Starship reusable upper stage heat shield — which must withstand 1,800 degrees Fahrenheit on atmospheric reentry — has not yet been proven at scale.
- Until it is, the full economic case for Starship remains a projection, not a fact.
Segment 2: Starlink
This is the part of the business we find most compelling right now, and the part that is most underappreciated in the broader IPO debate.
The numbers — from the audited S-1:
- $11.3 billion in revenue in 2025 — 50% year-on-year growth
- 39% operating margin
- 10.3 million subscribers across 164 countries as of March 2026
- More than 9,600 satellites deployed in low Earth orbit
These are not projections. These are audited figures from the S-1.
The structural advantage that rarely gets enough attention is this: every dollar SpaceX invests in Starlink infrastructure benefits every user globally — not just a region or a city. A telco builds a tower and serves a suburb. SpaceX launches a satellite and serves the world. The economics compound differently at scale. The incremental cost of adding a new user to an existing network is negligible. That is what an operating margin approaching 40% — and growing — looks like in practice.
Starlink is also the only satellite communications provider on Earth with a fully vertically integrated launch capability. It deploys its own satellites on its own rockets at its own internal cost. No other provider can do that. That vertical integration is the moat, and it is widening with every launch.
Growth opportunities beyond the headline subscriber number:
- Direct-to-cellular — not replacing your mobile carrier, but acting as the invisible backstop where tower coverage fails. Striking deals with carriers globally as a connectivity add-on. Morningstar sizes this addressable market at $67 billion by 2035. No new infrastructure required beyond what Starlink is already building.
- Aviation and fleet connectivity — airlines, shipping, mining, and defence. Wide-area coverage across terrain and ocean that fixed-line and wireless incumbents structurally cannot match.
- Morningstar base case — $56 billion in Starlink revenue by 2035. Even if that proves 30% optimistic, the trajectory is extraordinary.
The bear case on this segment:
- Spectrum constraints in dense urban environments mean Starlink will not replace cable or fibre in cities. The physics of shared bandwidth in concentrated areas work against it.
- Upload speeds and latency remain a disadvantage relative to fixed-line broadband for high-demand applications.
- Regulatory approval for spectrum allocation varies by country and can be slow, contested, or occasionally revoked.
These are genuine constraints on the total addressable market. They are not reasons to dismiss the business.
Segment 3: The AI business — Grok, Colossus, and X
This is the segment that makes or breaks the valuation debate. And it is the one that is hardest to assess honestly.
On 2 February 2026, SpaceX acquired xAI from Elon Musk in an all-stock deal. The acquisition was structured as a transaction between entities under common control — meaning Musk was effectively the controlling party on both sides of the table. There was no arm's-length pricing process. At the time of the transaction, xAI was valued at approximately $250 billion, which pegged SpaceX's combined private market valuation at around $1.5 trillion. That is not a footnote. It is a governance fact that every minority shareholder needs to understand clearly before participating in this offering.
What the acquisition brought with it:
- Grok — xAI's large language model, competing directly with ChatGPT, Claude, and Gemini. Its integration with X gives it access to one of the most valuable real-time data feeds in the world. No other AI model has that. Whether that translates into a durable performance advantage is the open question. As of 2026, Morningstar notes that Grok has not demonstrated a clear performance edge over leading competitors — and points specifically to Anthropic's Claude gaining significant enterprise market share this year precisely because enterprises chase the best model and switching costs are low. Grok has not yet earned the market position that justifies its implied valuation.
- Colossus — the data centre infrastructure built to train and run Grok, currently targeting 2 gigawatts of capacity and one of the largest AI compute facilities in the world. SpaceX has agreed to make a portion of Colossus capacity available to Anthropic for $1.25 billion per month for up to three years — a contracted commercial arrangement disclosed by Morningstar, not a projection.
- X — the social network formerly known as Twitter. X is a private company and does not publish audited revenue figures. Multiple independent analyst reports have estimated revenue declined significantly following Musk's 2022 takeover — with some estimates citing declines of around 50% — though these figures cannot be verified against audited accounts. There are approximately 4.4 million paying X Premium subscribers as of 2026, under 1% of monthly active users. We share Morningstar's assessment: X does not have a meaningful economic moat, and the platform's value largely accrues to its users rather than its shareholders. It is the part of the AI segment we find least compelling.
The orbital AI vision — audacious, but unproven:
SpaceX has filed with the FCC to launch up to one million satellites functioning as solar-powered orbital data centres — approximately 100 times the scale of any planned constellation today. The strategic logic is compelling: in orbit, solar energy is free and uninterrupted, and the vacuum of space eliminates the enormous cooling costs that make terrestrial data centres so expensive to run.
The engineering challenges are equally significant:
- No repair crews exist in orbit
- Radiation damages GPU chips
- Heat dissipation in vacuum has not been solved commercially at this scale
- Collision risk at one million satellites has been flagged publicly by scientists and former NASA engineers — objects moving at 17,500 miles per hour with no margin for error
Morningstar's probability-weighted AI scenarios:
- 7% — Moonshot. Orbital AI works as envisioned. Transformative upside.
- 50% — MVP. Orbital data centres prove viable but at limited scale and with constraints.
- 43% — No Go. The orbital AI vision fails to prove out commercially. Tens of billions in capital destroyed in the process.
The AI segment financials — Q1 2026:
- Revenue: $818 million
- Operating loss: $2.47 billion
- R&D growth: up 126% year-on-year
- Bridge loan outstanding: $20 billion, maturing 15 months post-IPO
Starlink is currently subsidising this segment. That is the honest picture.
The bull case
The bear case
What Australian investors need to know
SpaceX will not list on the ASX.
Australian investors do have pathways to participate — direct via CommSec under a separate ASIC-compliant prospectus, or indirectly through listed vehicles and ETFs already tracking the space economy. SpaceX is targeting up to AUD $1 billion from Australian retail investors specifically.
The index mechanic is worth understanding regardless of whether you act. If you already hold a Nasdaq 100-linked product, you gain SpaceX exposure automatically on day 15. That is not a recommendation in either direction. It is just something every Australian investor with index exposure needs to be aware of before June 12.
We recommend speaking with your adviser or reaching out to the York team directly about how this may fit your specific situation before making any decisions.
The bottom line
Will you be participating?
That is the question every client has been asking us this week.
The honest answer is: it depends entirely on your time horizon, your appetite for uncertainty, and whether you are buying the business or buying the hype.
The core business justifies attention. The AI optionality is real even if the probability distribution is wide. The index mechanic means some of you are already in whether you act or not.
What we will not do is treat this as a sure thing because the story is exciting. We never have. The best decisions we have made for clients have always started with discipline on entry price. That does not change because we love watching the SpaceX rockets fly and love using Grok on a daily basis.
Reach out to the York team if you would like to work through what this means for your portfolio specifically.
Warm regards
Murdoch Gatti
Private Wealth Manager | M.Commerce (Finance)
Sources
- Official SpaceX S-1 Registration Statement – filed with the SEC, 20 May 2026, amended 1 June 2026. sec.gov
- Morningstar Australia – SpaceX: What investors need to know about its enormous upcoming IPO, Nicolas Owens & Suryansh Sharma, 2 June 2026. morningstar.com.au
- Acadian Asset Management – Four scenarios for the SpaceX IPO, Owen A. Lamont PhD, April 2026. acadian-asset.com
- CNBC – SpaceX Sets Aside Up to 5% of Shares in IPO for Employees and Friends, 1 June 2026. cnbc.com
- Mentor Sync Hub – The SpaceX IPO is Here. How Australians Can Actually Access It, June 2026. mentorsynchub.com.au
- Scientific American – SpaceX plans to launch one million satellites to power orbital AI data center, 2026. aol.com
- 24/7 Wall St. – SpaceX Is About to IPO. History Says a 55% Stock Drop Could Be Coming Next, 3 June 2026. 247wallst.com
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Murdoch: Adviser & CEO @ York Wealth Management. 'The Rate of Change' podcast shares the insights of some of the brightest minds in asset management.
We work with High-Net-Worth individuals, institutions & family offices to help grow & protect their wealth.
Outside of working with clients, Murdoch & his wife Yasmin, an Executive Assistant to the Chairman of Wealth at a global investment firm, have 2 young children, a boy & a girl.
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York Wealth Management Pty Ltd ABN 46 605 610 679 is an Corporate Authorised Representative of Samuel Allgate Investments Pty Ltd AFSL No. 420170; Financial Adviser Authorised Representative Number 001007979.
This article has been prepared without taking into consideration any investor’s financial situations, objectives or needs. Accordingly, before acting on the advice in this article, you should consider its appropriateness to your financial situation, objectives and needs. Every reasonable effort has been made to ensure the information provided is correct, but we cannot make any representation nor warranty as to the accuracy, completeness or currency of that information. To the extent permissible by law, no responsibility for any errors or misstatements is taken, negligent or otherwise. SAI or its authorised representatives may also receive fees or brokerage from dealing in financial products, see the Financial Services Guide for information about the services offered available at York Wealth Management.
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Murdoch: Adviser & CEO @ York Wealth Management. 'The Rate of Change' podcast shares the insights of some of the brightest minds in asset management. ...
Expertise
Murdoch: Adviser & CEO @ York Wealth Management. 'The Rate of Change' podcast shares the insights of some of the brightest minds in asset management. ...
Expertise
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