SpaceX is preparing for an initial public offering that could value the company at about $1.75 trillion, according to people familiar with the deal terms. The rocket and satellite operator aims to sell roughly 556 million shares at $135 each, seeking to raise around $75 billion in what would rank among the largest stock-market debuts on record and instantly place SpaceX among the most valuable U.S. public companies.
Lofty valuation vs. mounting losses
Regulatory filings show SpaceX generated about $18.67 billion in revenue in 2025, up 33 percent from the prior year, but posted a net loss of roughly $4.94 billion. At the proposed price, the company would trade at nearly 94 times its latest annual revenue, far above typical multiples in the aerospace and technology sectors.
The tension between breakneck growth and widening losses has intensified in recent quarters. In the first quarter of 2026, total revenue reached $4.69 billion, while operating losses amounted to $1.94 billion.
Starlink profits bankroll ai ambitions
SpaceX’s business is anchored by Starlink, its satellite internet network, which has become the company’s primary profit engine, while an expanding artificial intelligence arm consumes heavy resources.
Starlink produced $11.4 billion in revenue in 2025, equal to about 61 percent of the company’s total. The unit supported a 63 percent adjusted EBITDA margin that year and reached 10 million subscribers globally by early 2026, according to the filings. In the first quarter of 2026, Starlink generated $1.19 billion in operating profit.
By contrast, the AI division booked $818 million in revenue in the same quarter but registered an operating loss of $2.47 billion. For full-year 2025, the AI operation recorded a $6.4 billion operating loss.
The company’s first-quarter 2026 capital expenditures totaled $10.1 billion, with roughly 76 percent, or $7.72 billion, directed toward AI infrastructure. Profits from Starlink are effectively being recycled into a speculative, capital-intensive bet on AI, where profitability remains distant and the commercial model is still evolving.
Xai deal adds leverage and related-party scrutiny
The financial picture was complicated further in February 2026, when SpaceX completed an all-stock acquisition of xAI, an artificial intelligence firm founded by Elon Musk. The transaction valued SpaceX at $1 trillion and xAI at $250 billion, implying a combined worth of $1.25 trillion at the time of the deal.
As part of the acquisition, SpaceX assumed more than $20 billion in AI infrastructure lease obligations tied to xAI subsidiaries. Some of these agreements were classified as failed sale-leasebacks and recorded as debt on SpaceX’s balance sheet, increasing leverage.
Counterparties to the leases include entities linked to Valor Equity Partners, whose founder sits on the SpaceX board and has longstanding ties to Musk. Those related-party connections, coupled with the complex lease structures, have prompted questions about transparency and the extent of insider exposure embedded in SpaceX’s obligations.
Governance structure limits shareholder influence
SpaceX is incorporated in Texas and uses a dual-class share system designed to secure Musk’s effective control after the listing. Filings show the Class B shares he controls will carry roughly 85 percent of the company’s voting power.
Under Texas law, shareholders must own at least 3 percent of the company’s stock to initiate derivative actions. At the proposed IPO valuation, that threshold equates to more than $50 billion in equity, placing legal challenges to corporate decisions out of reach for all but the largest holders.
Some large funds have already signaled they will not participate in the offering, citing concerns about the concentrated voting control. For those who do buy, the stock is essentially a wager on Musk’s strategy and execution, with limited practical avenues to influence governance or board oversight.
Starship remains central to long-term thesis
A key assumption behind SpaceX’s valuation is the eventual full commercialization of Starship, its next-generation heavy-lift launch system. The rocket is designed to dramatically cut launch costs, expand payload capacity and enable more frequent flights, forming the backbone for future satellite constellations and proposed orbital data centers.
Starship’s status provides one of the clearest gauges of SpaceX’s ability to achieve its long-range operational targets. As of late May 2026, the vehicle had flown 12 times, with 7 successful missions, underscoring that the program remains in an iterative development phase where failures are still part of the path to maturity.
The timing and outcome of upcoming Starship tests will be closely watched, as they bear directly on whether the company can achieve the economies of scale and cost efficiencies embedded in current growth forecasts.
Concentrated bets on unproven businesses
Taken together, the financial data reveal a mixed profile. Starlink is delivering substantial cash flow. The AI division is driving heavy operating losses and unprecedented capital spending. Starship’s progress remains crucial to any breakthrough in launch economics and the viability of large-scale orbital infrastructure.
The proposed valuation leans heavily on a narrative that fuses dominant global satellite connectivity with frontier AI capabilities. That story resonates with today’s market appetite for high-growth technology offerings, where trader attention often gravitates toward long-term potential rather than near-term earnings.
Yet the structure of SpaceX’s business also amplifies risk. A single profitable division is funding a speculative AI effort and an ambitious new rocket platform, while the balance sheet absorbs billions in lease-related obligations tied to related parties and the governance framework concentrates control in one individual.
For traders, the central question heading into the IPO is how much to pay now for a future defined by unproven technologies, against a backdrop of ongoing losses, rising leverage and limited shareholder recourse.
What traders will watch next
Traders assessing the deal are likely to focus on a small set of metrics in the coming quarters: Starlink subscriber and revenue growth and its ability to sustain high margins; the pace of cash burn and milestone delivery in the AI division; and Starship’s test record and cost trajectory. How those indicators evolve will help determine whether the $1.75 trillion price tag reflects a sustainable franchise or a premium built primarily on promise.
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