On its first day of trading, only 4.2% of the total shares in SpaceX were available for public circulation, leading to high demand and strong investor interest, which naturally drove a short-term surge in the stock price. However, the company's price-to-sales ratio has exceeded 112 times, far surpassing the 15 times of Tesla Inc and the nearly 20 times of chip giant NVIDIA Corp.
Understanding the Business Model
In simple terms, SpaceX's operations present a structure of one highly profitable segment alongside two significant loss-making areas. The Starlink satellite internet service stands out as the undisputed cash generator. According to the prospectus, this business generated revenue of $11.39 billion last year, accounting for 61% of SpaceX's total revenue, and had served over 10 million customers by the end of 2025. The company further plans to expand into direct-to-cell phone services through spectrum acquisition and the deployment of an additional 15,000 satellites, potentially reaching around 6 billion mobile device users globally.
The rocket launch division, leveraging reusable technology, commands approximately 80% of the global commercial launch market. Despite this dominant position, it reported a loss of $657 million last year. Moreover, substantial capital investment and continued technological advancement are still required for the Starship program to achieve its goal of crewed missions to Mars.
The xAI initiative and prospective space-based computing ventures are viewed as major capital-intensive projects. Some analyses estimate that, at the current rate of losses, the xAI business alone could consume all the profits generated by the Starlink segment within the next four quarters. The prospectus reveals that since its founding in 2002, SpaceX has accumulated total losses reaching $41.3 billion.
Divergent Views on Valuation
This financial profile has led to sharply divided opinions on the company's valuation among different institutions. Investment banks serving as underwriters for the SpaceX IPO, such as Morgan Stanley and Goldman Sachs Group Inc, are bullish on the defensive moat of Starlink and the growth potential of AI-related businesses. In contrast, long-term investors like certain Danish pension funds have pointed to an overinflated market capitalization, arguing that a discounted cash flow analysis suggests a fair value not exceeding $1 trillion. Asset management firm Fidelity Investments, known for its conservative approach, has stated that roughly 30% of SpaceX's valuation is attributable to a premium for Elon Musk's personal brand and the AI narrative.