The big SpaceX mega IPO is getting closer, and with a $1.75 trillion expected valuation (plus or minus a couple hundred billion or so), there’s sure to be a flood of investors who will need to sell something in order to load up on opening day. Undoubtedly, some of the hardcore Elon Musk fans might be ready to buy on day one, regardless of the price they’ll end up with.
The potential long-term growth runway is just too great, after all, right? While the SpaceX story seems to get even more explosive by the month, as we learn more about the kinds of innovations Elon Musk’s legendary rocket company will be shooting down next, I do think that the boom-and-bust nature of red-hot IPOs ought to be taken into consideration.
With xAI aboard, SpaceX certainly seems to be ready to clash with OpenAI and Anthropic. And while I’m a bit worried that the opening price will be on the higher side of the range (I’m not ruling out a $2 trillion valuation yet), I do think that there are ample reasons why SpaceX could be the once-in-a-generation kind of IPO that might be worth careful consideration, even if one struggles to grapple with how to value such a firm that’s reaching for the stars.
Even if it’s going to be hard to sit out on SpaceX’s first day trading as a public company, I do think that stashing the name atop one’s watchlist could be the move should shares peak quickly before a major pullback, as has been the case with many IPOs in their first few months after going live.
Starlink: The scale of profitability push is difficult to fathom
First up, Starlink is a disruptive force that could forever change the entire telecom industry. It’s not a mystery as to why the cell tower telecoms have teamed up to gain satellite connectivity as partners. Either way, Starlink has the big constellation that will be very difficult to top.
While Amazon (NASDAQ:AMZN | AMZN Price Prediction) via Amazon Leo could rise to become a rival, there’s still a lot of catching up to do if it’s to get thousands of satellites up in the air. More launches, more M&A, and deals are a must if Leo (formerly Project Kuiper) is to pass the 1,000 satellite mark as Starlink adds to its constellation that’s now comprised of more than 10,000 satellites. Amazon Leo is playing from behind in a big way.
Even as Amazon looks to floor it in a bid to catch up, it’s tough to tell how much better Starlink will get over time as the firm ramps up subscribers while pushing further into profitability.
Starship: The heavy lifter for SpaceX
With the super-heavy-lift Starship considered, SpaceX may well be able to expand its market leadership as it continues to do business with Amazon in a bid to help it catch up.
The frenemy (rival and partner) dynamic has been quite common in the tech scene. And when it comes to space, Amazon and SpaceX may very well take their “co-opetition” into orbit. Amazon Leo is already a SpaceX customer, and as Amazon Leo looks to floor it while SpaceX’s Starship looks to lower the costs of sending payloads into orbit, my guess is there will be more teamwork in the cards.
Orbital AI data centers
Finally, we have the xAI merger and the potential rise of orbital AI data centers. Undoubtedly, the concept might seem out of this world, but, then again, so too was satellite connectivity a while back. Either way, I wouldn’t bet against the orbital AI infrastructure potential as SpaceX and xAI look to find common ground.
Elon Musk’s visionary leadership beyond Tesla
Any way you look at it, Elon Musk looks like he’s playing chess as others play checkers. And perhaps that alone makes SpaceX a tempting buy on day one, as it will no longer be just Tesla (NASDAQ:TSLA) that investors can use as a proxy to bet on the man himself. Now, Tesla’s roadmap is profoundly ambitious as well (FSD and Optimus), but SpaceX gives Musk fans another option as they wait for physical AI to take off.
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