SpaceX, the rocket and satellite company built by Elon Musk, is preparing for one of the largest public market debuts ever attempted. The company plans to raise $75 billion through its initial public offering, at a valuation rumoured to be close to $1.8 trillion. For investors watching the listing, the more useful exercise is not to react to the headline number but to understand what the company actually earns money from, how it intends to spend the cash it raises, and whether the price being asked stacks up against what the business is worth.
Three businesses under one roof
SpaceX is not a single company so much as three distinct businesses operating together, each at a very different stage of maturity.
The first and oldest is space launch. SpaceX sends satellites, cargo and astronauts into orbit for NASA, defence agencies and commercial clients, and its decisive advantage is reusable rockets that have driven launch costs sharply lower. Of the three businesses, this one has the strongest unit economics, carrying a gross margin of roughly 67 per cent. It is the original core, steady and profitable.
The second is Starlink, the connectivity arm. A constellation of several thousand satellites delivers broadband internet across the globe, reaching remote areas that traditional networks struggle to serve. This segment grew revenue by almost 50 per cent in 2025, and its subscriber base doubled from 5 million in the first quarter of 2025 to 10.3 million in the first quarter of 2026. Notably, monthly revenue per subscriber fell from $99 to $66 over the same period. That decline is by design. SpaceX is trading higher per-user revenue for far larger scale, a classic growth-over-profit play. Starlink is currently the fastest-growing and most profitable part of the company.
The third and newest business is artificial intelligence. After merging with Musk's AI venture xAI, SpaceX has entered the AI race directly. Its Colossus compute centre has been leased to Anthropic for $1.25 billion a month, a contract that should begin contributing to revenue in the near term. The catch is that the AI business carries the lowest gross margins of the three, and those margins worsened through 2025 as competition from rival large language models intensified and the cost of delivering AI services climbed.
Where the IPO money goes
A common worry around founder-led listings is that the money raised ends up in the founder's pocket. That is not the case here. The prospectus states that the $75 billion will stay within the company to fund infrastructure investment across its businesses. The cash is fuel for growth rather than a payday for Musk, and the bulk of it is earmarked for the company's enormous AI build-out.
The scale of that spending explains why so much capital is needed. In 2025, SpaceX spent close to $14 billion on capital expenditure and almost $9 billion on research and development, roughly double its reinvestment from the previous year. AI alone accounted for more than $14 billion of total reinvestment in 2025. Seen against those figures, the $75 billion raise essentially funds the next few years of an aggressive expansion already under way.
What is the company actually worth?
This is where independent analysis matters. Aswath Damodaran, the NYU valuation expert, has run his own numbers on the company and estimates its intrinsic value at between $1.25 trillion and $1.35 trillion. The bankers handling the offering are pricing it at around $1.8 trillion, or $135 per share. In his reading, the listing is priced above what the fundamentals justify, though not wildly so.
His workings show the enterprise value edging up only modestly, from $1.21 trillion before the prospectus to $1.22 trillion after it, with the overall equity value rising to $1.3 trillion. Almost all of that increase comes simply from the $75 billion in fresh cash the IPO brings in, rather than from any sudden leap in the underlying business.
The risks worth weighing
Two risks stand out in Damodaran's assessment. The first is what he calls AI overreach. The danger is that SpaceX overestimates both the size of the AI market and the strength of its own position within it, and then commits heavy investment based on those inflated assumptions. Given how much capital is flowing into AI, a misjudgement here would be costly.
The second is control. The company will issue two classes of shares. Class A shares, sold to the public, carry one vote each, while Class B shares, held by Musk, carry ten votes each. The result is that Musk will command more than 85 per cent of the voting rights. Public shareholders contribute capital but have almost no say in how the company is run.
So, is the price worth paying?
Damodaran's candid view is that at the rumoured $1.8 trillion, the listing is too richly priced for his taste, sitting well above his own estimate of $1.25 trillion to $1.35 trillion. He points to history as a caution. Facebook traded at half its offering price within months of going public, and Uber shed more than half its market value in the year after its listing. Strong companies do not always make strong debuts.
At the same time, he frames SpaceX as a concentrated bet on two things, the future of AI and the judgement of Elon Musk. For some investors that concentration is a reason for caution. For others, Musk's track record at Tesla is reason enough to believe the odds sit in their favour.
In short, SpaceX earns its money from rockets, satellite internet through Starlink, and now artificial intelligence. The IPO raises $75 billion that flows straight back into infrastructure. At a $1.8 trillion valuation, the market is asking investors to pay a premium today for a story that rests on whether Starlink and AI can deliver at scale tomorrow.
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