SpaceX is preparing for an IPO that could break all world records, with with analysts discussing a potential valuation of $1.5-2 trillion. However, it is currently unprofitable on a net basis, and its promised projects sound like science fiction. Will investors be willing to take the risk, and what consequences await them if it fails?
How SpaceX Inspired Investors
At first glance, the market’s enthusiasm for the upcoming SpaceX IPO may seem puzzling. Yes, the company has secured U.S. leadership in space, but in 2025 its revenue was $18.7 billion, and it remains very far from sustainable net profitability. The heightened interest comes from its flagship products – the Starlink satellite network, Falcon launch vehicles, and the fully reusable Starship spacecraft currently in development, which is designed to carry bold volunteers to Mars – as well as the reputation of its founder, Elon Musk. Yet the market has never valued any other aerospace company at such levels.
This optimism did not appear out of nowhere. In February, SpaceX acquired another Musk project, xAI. Musk also owns X (formerly Twitter) and the Grok AI chatbot, which he has integrated among other things. Even Telegram has also integrated Grok. After the acquisition, SpaceX unexpectedly became a vertically integrated business that controls both AI model development and hardware. While SpaceX was a monopolist in its narrow market, the combined entity with xAI will immediately challenge several companies from the “Magnificent Seven” – specifically Alphabet, Microsoft, and Amazon.
Today, these are the only companies that own the entire AI business chain, from producing their own chips to training models. In addition, they closely cooperate with OpenAI and Anthropic, and thanks to large investments, they have effectively become divisions of Microsoft and Amazon, respectively. If SpaceX successfully integrates xAI, it will join this list. This explains investors’ excitement about the upcoming IPO and the potential $2 trillion valuation. The key to the doors of this elite club could be the company’s new strategy.
How SpaceX’s Strategy Differs
SpaceX wants to change the very logic of how artificial intelligence operates by moving data centers into Earth’s orbit. If it succeeds, it will be able to significantly outpace its competitors.
The reason according to analysts, the main constraint on scaling AI today is the shortage of energy for servers. Due to the electricity deficit, building new data centers is becoming increasingly difficult, and already this year half of all centers under construction will be delivered with delays.
Musk, however, has proposed completely eliminating these earthly limitations. He wants to create orbital AI infrastructure and launch dozens or even hundreds of data centers into space, connected to each other and to Earth via the Starlink network.
Naturally, such a project will require enormous investments. The area of the largest terrestrial data centers reaches several square kilometers. One can only guess how many satellites will need to be sent into orbit to achieve comparable computing power. And here SpaceX has a major advantage. The company’s innovations and established business processes have reduced the cost of launching cargo into orbit several times over, and Starship can cut it by another 90%. Therefore, launching a satellite with a couple of hundred GPUs into space will not be that expensive.
Cheap Launches + Free Solar = Orbital AI Advantage
Musk’s core idea is that any capital expenditures can be offset by low operating costs. In space, there is almost free and unlimited solar energy, and cooling the chips does not require tons of water. As a result, xAI’s AI models will run on orbital data centers, with maintenance costs far lower than on Earth. If everything goes according to plan, SpaceX will become the undisputed market leader, unaffected by any earthly constraints.
Of course, these are still ambitious plans, and the company is far from a sustainable business model. It is still unknown how effectively data centers will operate in space. And whether it will even be possible to assemble an orbital data center comparable in power to an average terrestrial one remains a big question.
How SpaceX’s IPO Will Change the Entire Market
Regardless of how fantastical SpaceX’s plans are, its IPO is highly likely to become the largest in history. The company plans to raise up to $75 billion – several times more than the previous record holder, Saudi Aramco, which raised “only” $29.4 billion. The future of the entire AI sector will largely depend on its success.
Such mega-offerings traditionally pull liquidity out of the market. The scale of this placement is comparable to the annual volume of IPOs in the United States, and investors will have to decide where they are willing to put their money. Most likely, no fund manager will be able to afford not to add SpaceX shares to their portfolio. This will automatically increase demand for the company’s stock, and the price will most likely rise.
SpaceX's Impact on Market Indices and Tech Valuations
The index market will also change and become even more concentrated. But there's one important nuance worth highlighting. Under the current S&P 500 eligibility rules, SpaceX would not qualify immediately because it has yet to demonstrate sustained profitability. In anticipation of the major IPO wave expected in 2026 – which includes SpaceX, OpenAI, and Anthropic – S&P Dow Jones Indices launched a public consultation at the end of April 2026. Among the key proposals under review are shortening the required public "seasoning" period from 12 months to just 6 months and potentially waiving the profitability requirement for megacap companies.
If these changes are approved, SpaceX could join the S&P 500 far sooner than under the existing rules. Such inclusion would open the door to substantial passive inflows from index-tracking funds that collectively manage around $24 trillion in assets. This would likely provide meaningful price support for the stock, though it would also increase concentration risk within the benchmark.
Feedback Loops and Tech Sector Revaluation
Today, nearly a third of the S&P 500’s weight comes from the “Magnificent Seven” stocks, causing fluctuations in these shares that sometimes shake the entire index. Naturally, if another company with enormous capitalization joins the S&P500 basket, this dependence will only intensify.
A rapid addition of SpaceX could create a powerful feedback loop: stronger performance would lift the entire S&P 500, which in turn would draw even more investor attention and capital toward the company. High demand for SpaceX shares will also push the index itself higher, so the market could enter a kind of loop: investors will be interested in SpaceX’s growth because it will also make the S&P500 more expensive. At the same time, any sharp post-IPO weakness in SpaceX could exert downward pressure on the broader index.
The IPO results will trigger a revaluation of the entire technology sector. Even established giants will not be able to ignore it. After all, if SpaceX fails and, for example, its stock price drops 15-20% in a couple of months, investors may start questioning how justified the valuations of Alphabet, Microsoft, and other companies really are.
Upcoming IPO Race
The main risk for the market is that OpenAI and Anthropic could go public in late 2026 or early 2027. If three major players conduct IPOs in a relatively short period, the total volume of offerings could exceed $150 billion. The market will inevitably face oversupply, and the deals will begin competing with each other for liquidity. This explains why a kind of race for stock market primacy has begun among the trio of SpaceX, OpenAI, and Anthropic. Investors will have to monitor the financial health of these companies more closely and manage their capital more strictly, because money is not unlimited.
What Tesla’s Experience Teaches Us
To understand how the market might react to the IPO of a futuristic, unprofitable company, one can look at Musk’s previous listing – Tesla (NASDAQ:TSLA). Its experience could provide SpaceX with several important lessons. The main one is that investors are quite willing to pay for promises and patiently wait for real profits to appear.
When Tesla went public in 2010, it was unprofitable, but within 3 years its shares grew multifold. This example is especially relevant for SpaceX, since its business ideas are based not even on prototypes, but largely on fantastical projects.
Tesla 2010 vs SpaceX Today: Different Era, Same Hype?
At the same time, one should not expect the same explosive growth from SpaceX. 15-20 years ago, companies went public to raise capital and execute ambitious plans, with shares rising precisely on the exchange. Today, startups receive tens of billions of dollars from private investors and usually go public with already high valuations. Because of this, growing much further will be very difficult, and investors are unlikely to earn much on the company’s shares in the near future.
Elon Musk’s personality also attracts attention. The mere fact that the brainchild of the world’s richest man is going public generates enthusiasm. But Musk’s reputation is ambiguous; he often makes controversial statements in the media and on social networks, and on the eve of the largest IPO, any careless word could cause a sharp drop.
It can be assumed that precisely because of the enormous public attention and Musk’s reputation, SpaceX shares could even turn into “meme” stocks. The price of such stocks depends on social media discussions and remains highly volatile due to huge trading volumes. Tesla is also considered such a stock, and SpaceX could well follow the same path.
In the end, the company remains unprofitable, and everything depends only on whether the market is now ready to believe in it the same way it once believed in Tesla.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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