Key Points
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Analysts covering SpaceX have set a median price target of $227 per share, indicating a potential 33% increase from the current $170 level.
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SpaceX estimates its total addressable market at $28.5 trillion, with the artificial intelligence segment representing the bulk of that opportunity.
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The company trades at 114 times its revenue, making it twice as costly as the most heavily valued S&P 500 stock, Palantir.
Space Exploration Technologies (NASDAQ: SPCX) completed its initial public offering on June 12, marking the largest IPO ever by both capital raised—$75 billion—and market capitalization—a $1.7 trillion valuation at an IPO price of $135 per share.
By the end of June, SpaceX was trading at $170 per share—roughly 26% above its offering price and 16% below its post‑IPO high. Nevertheless, Wall Street views the stock as undervalued; the median analyst target of $227 implies a 33% upside.
Image source: Getty Images.
SpaceX values its total addressable market at $28.5 trillion
SpaceX is renowned for its reusable rockets and satellite broadband services, yet its operations are divided into three principal segments: space, connectivity, and artificial intelligence (AI). The following overview summarizes each segment.
- Space: Revenue derives from launch and mission services. SpaceX enjoys a cost advantage, having reduced orbital launch expenses by 85% with Falcon 9 and plans to cut costs further by 99% with Starship.
- Connectivity: Income stems from satellite broadband and mobile services. SpaceX runs the world’s largest satellite constellation, Starlink, measured by both subscriber count and orbital assets.
- Artificial Intelligence: Revenue originates from infrastructure and application services. SpaceX’s subsidiary xAI manages extensive data centers that together constitute Colossus, the world’s largest AI training cluster.
In Q1 2026, SpaceX reported a 15% revenue increase, reaching $4.7 billion. Connectivity services represented 70% of total sales, with space and AI each contributing roughly 15%. However, the company posted a net loss of $4.3 trillion—far larger than the $528 million loss in the comparable quarter of the prior year—largely driven by elevated R&D expenses in the AI segment.
Looking ahead, SpaceX is uniquely positioned to develop orbital data centers, leveraging its integrated capabilities across rockets, satellites, and AI. CEO Elon Musk argues that orbital data centers represent the most viable path to scaling AI compute, citing abundant solar energy and naturally cold temperatures that mitigate power and cooling challenges faced by terrestrial facilities.
Consequently, SpaceX estimates its total addressable market at $28.5 trillion, comprising $370 billion from space operations, $1.6 trillion from connectivity services, and the remaining $26.5 trillion attributed to the AI segment.
SpaceX is twice as expensive as the most richly valued stock in the S&P 500
SpaceX is an intriguing company with ambitious goals, yet its lofty valuation raises questions about its suitability as an investment. Investors should weigh two significant risks.
- Companies that debut with large market capitalizations have a history of underperformance. Of the 15 largest U.S. IPOs since 2006, the average stock experienced a 50% decline at some point within its first year and finished the year 33% below its offering price, per data from First Trust and Bloomberg.
- SpaceX generated $19.3 billion in sales over the past four quarters, resulting in a market capitalization of $2.3 trillion and a price‑to‑sales ratio of 114—an exceptionally high valuation rarely seen among public companies.
For context, Palantir Technologies currently trades at 54 times sales, making it the most heavily valued S&P 500 stock. SpaceX’s valuation is double that multiple. Moreover, Palantir’s revenue grew 85% in the first quarter, compared with SpaceX’s 15% growth.
In my view, investors should steer clear of SpaceX at present. Although Wall Street’s median target may materialize, history shows that many large IPO stocks tumble in their early trading year—an outcome that appears probable for SpaceX given its elevated valuation.
Should you buy stock in Space Exploration Technologies right now?
Prospective investors should weigh the following factors before purchasing Space Exploration Technologies shares.
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