In a report released ahead of SpaceX's planned investor roadshow, Morningstar estimated the company's fair value at approximately $780 billion—less than half of the $1.75 trillion valuation SpaceX is reportedly targeting for its initial public offering (IPO).
The assessment presents one of the few skeptical views surrounding the offering, which has generated significant excitement across financial markets due to the company's dominance in commercial space launches, satellite communications and its growing ambitions in artificial intelligence.
According to Morningstar equity analyst Nicolas Owens, investor expectations may have become overly optimistic, particularly regarding SpaceX's AI-related ventures, which include Elon Musk's artificial intelligence company xAI and the social media platform X.
"We don't see Grok as one of the leading AI labs today," Owens said, referring to the AI chatbot developed by xAI.
He noted that while artificial intelligence remains one of the most attractive sectors for investors, the long-term economics of SpaceX's AI ecosystem remain uncertain. Competition from established industry leaders such as OpenAI and Anthropic, combined with unanswered questions about revenue generation and scalability, could make it difficult for the company to justify its lofty valuation.
Morningstar also expressed concerns about some of the technologies that underpin SpaceX's future growth narrative. Owens pointed to ambitious concepts such as orbital data centers—computing facilities that could potentially operate in space—as examples of innovations that remain largely unproven.
The analyst further highlighted risks facing Starlink, SpaceX's rapidly expanding satellite internet business. While Starlink has become one of the company's most valuable assets, Owens argued that technological challenges, regulatory issues and infrastructure limitations could affect its long-term growth trajectory.
"We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO," Owens said.
Despite its cautious long-term outlook, Morningstar acknowledged that SpaceX shares could perform strongly in the immediate aftermath of the listing. The firm cited a relatively limited public share supply, known as a low float, along with strong backing from some of Wall Street's largest financial institutions.
The IPO is being underwritten by a group of major investment banks, including Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup and J.P. Morgan, whose involvement is expected to help generate significant investor interest.
Reuters previously reported that SpaceX plans to begin its IPO roadshow on June 4, with shares expected to start trading on the Nasdaq on June 12. The company is reportedly seeking a valuation of $1.75 trillion, a figure that would make it one of the most valuable publicly traded companies in the world.
SpaceX was most recently valued at approximately $1.53 trillion on secondary market platform Forge Global, underscoring the rapid rise in investor demand for exposure to Musk's business empire.
Still, Morningstar believes patience could benefit prospective shareholders.
"Long-term investors eager to participate in SpaceX's future endeavors and potential success will have opportunities to do so with a greater margin of safety than the initial offering is likely to provide," Owens said.
While enthusiasm surrounding the IPO remains strong, Morningstar's report serves as a reminder that even the market's most sought-after listings can face scrutiny when expectations begin to outpace fundamentals. As SpaceX prepares to pitch investors this week, the debate over its true value is likely to intensify.