SpaceX is expected to launch its IPO in the coming weeks, with a valuation range of approximately $1.75 trillion to $2 trillion and a maximum fundraising target of $75 billion. If it proceeds at this scale, it will be one of the largest IPOs in U.S. market history. Market sentiment surrounding this deal is clearly divided: on one hand, retail investors remain cautious about the valuation and profitability, while on the other hand, exchanges, index providers, and fund companies have already begun adjusting their preparations.
Retail investors are more focused on valuation and earnings.
Several investors interviewed by foreign media believe that SpaceX possesses popular narratives such as rockets, satellites, and AI, but the current pricing already largely reflects future growth expectations. Some investors indicated that even if they are optimistic about the company's long-term prospects, they may not buy on the first day of trading, but rather prefer to wait for the stock price to fluctuate before deciding whether to invest.
The report mentions that SpaceX is projected to achieve $18.7 billion in revenue by 2025, but will incur losses of nearly $5 billion during the same period. Compared to large tech companies like Nvidia, Meta, and Microsoft, SpaceX currently lacks comparable support in terms of profitability and cash flow. This is a major reason why some investors remain reserved about its high valuation.
Some investors have questioned the company's long-term plans, arguing that the prospectus includes details about asteroid mining and a Mars community, which are still far from verifiable commercial returns. Discussions on investment communities like Reddit have also been extensive, focusing on how high a revenue and profit growth rate the company would need to justify a valuation exceeding $1.5 trillion.
Index institutions pave the way for listing in advance
Despite market controversy, SpaceX's potential size is large enough to influence index compilation rules. Nasdaq has amended its arrangements to allow SpaceX to be included in the Nasdaq 100 index 15 trading days after listing, down from a previous minimum waiting period of three months. FTSE Russell has taken similar measures, while S&P Dow Jones Indices is studying whether to follow suit.
Lynn Martin, president of NYSE Group, the parent company of the New York Stock Exchange, criticized the move, arguing that the exchange should not adjust market rules to attract large listings. Supporters, however, believe the index itself needs to quickly cover large-cap, highly liquid companies to maintain representativeness.
According to Bloomberg Intelligence, if SpaceX is included in major indices quickly, passive funds tracking those indices could generate nearly $20 billion in buying interest. This is roughly equivalent to a quarter of its IPO proceeds, meaning the pace of index inclusion could directly impact post-IPO funding.
Wall Street's product offerings are heating up simultaneously.
The buzz surrounding SpaceX isn't just coming from the primary market. A growing number of investors are accepting Musk's narrative that SpaceX is more than just a rocket company; it can also be viewed as an AI infrastructure enterprise. This narrative has further fueled market attention.
Reports indicate that some investors have already positioned themselves in advance through funds or ETFs holding equity in unlisted technology companies. Meanwhile, Wall Street is accelerating the launch of related products; more than 20 SpaceX-related ETFs have been submitted for approval this year, covering various strategies including leverage, inverse strategies, and options.
SpaceX also plans to allocate up to 30% of its offering to retail investors. Based on a $75 billion funding round, retail investors could receive approximately $22.5 billion worth of shares. Interactive Brokers chief strategist Steve Sosnick believes this arrangement could preemptively absorb some of the new buying interest after the IPO, and some investors might even sell assets like Tesla or Bitcoin to free up funds for the subscription.
May become a bellwether for large-scale technology IPOs
There is still significant disagreement in the market regarding whether SpaceX's pricing is reasonable. Roger Ibbotson, emeritus professor of finance at Yale University, stated that the market has given the company a clear "star premium." Based on revenue over the 12 months ending in March of this year, if the valuation reaches $1.8 trillion, its price-to-sales ratio would be approximately 93, about 15 times the average of the Nasdaq 100 index.
However, bulls are still betting that post-IPO funding will continue to drive the share price. Some institutional investors plan to continue buying in the first month after the listing, citing the potential for continued inflows of passive and thematic funds.
With OpenAI and Anthropic also preparing for large IPOs, SpaceX's listing results may be seen by the market as an important benchmark for tech unicorns entering the public market. A successful offering could encourage more large, unlisted tech companies to accelerate their IPOs; conversely, a weaker-than-expected performance could slow the pace of subsequent mega-IPOs.
