The opportunity is huge but the risk is also high. SpaceX has invested a lot in Starship. The company spent over $15 billion on the development of Starship. This investment may help to revolutionize the economics of launch and to sustain the growth of Starlink. But delays and cost overruns are real threats. At the time of writing, the private market data indicates that the private investors are still excited.
The IPO can generate enormous demand in case the S-1 confirms a significant increase in revenues, Starlink strength and an effective AI strategy. But in case the numbers are seen as stretched, SpaceX may find itself in the same position that has often befallen many highly valued growth companies after the hype has worn off.
Bottom Line
SpaceX is approaching the IPO window with good momentum. The next step will depend on the S-1 filing. Trades in the private market indicate that investors already anticipate a mega-cap launch. The Starlink, Starship, xAI and X represent so much larger a growth story. Nonetheless, the same scale also introduces valuation risk, excessive spending and pressure to execute. In case the filing confirms a robust increase in revenues, a stable cash flow and an effective AI strategy, SpaceX may have a lot of demand. If the numbers do not support the anticipated valuation, the stock might come under pressure after the initial excitement has passed.