By Telis Demos and Miriam Gottfried

SpaceX aims to sell shares in its anticipated public offering this week at a valuation of around $1.77 trillion. That value could go even higher once it begins trading.

The question investors will have to answer for themselves: Is it really worth that much?

According to Aswath Damodaran, an academic known as the "dean of valuation," it isn't -- at least not yet.

The professor of corporate finance at NYU's Stern School of Business estimates SpaceX's equity value at around $1.3 trillion.

Speaking on WSJ's Take On the Week podcast, Damodaran said one of the big reasons his answer differs from what SpaceX is seeking is how he values its artificial-intelligence business.

In its IPO paperwork, SpaceX estimated a so-called total addressable market -- a business term for potential revenue opportunities -- for the AI unit of around $26 trillion. That is most of the $28.5 trillion total addressable market SpaceX sees for the entire company, including the space unit that launches commercial rockets and the connectivity unit offering Starlink internet service.

The AI figure is "reaching the end of what's plausible and pushing beyond," Damodaran said. SpaceX acquired its nascent AI unit when it bought xAI earlier this year. It also includes the Grok chatbot.

Damodaran constructed his own valuation model by valuing each of SpaceX's three business segments. He used estimates of the size of each unit's market, and of SpaceX's likely share of it. He also incorporated an estimated target operating profit margin for each of those segments.

The unit "that's furthest away from profitability is xAI," he said.

Despite his more conservative overall valuation, Damodaran doesn't believe the company's shares will necessarily underperform.

"It's going to be one of the most heavily traded investments out there -- people buying and selling based on mood and momentum," he said. There is the possibility that "it's going to stomp you, even if you're right on value."

Watch or listen to the episode to hear more about how Damodaran is thinking about SpaceX, whether he thinks index providers should fast-track the addition of SpaceX and how to approach valuation questions in today's market.

Write to Telis Demos at Telis.Demos@wsj.com and Miriam Gottfried at Miriam.Gottfried@wsj.com

(END) Dow Jones Newswires

June 07, 2026 07:30 ET (11:30 GMT)

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