SpaceX just confidentially filed for what could be the largest initial public offering in history. The company is targeting a valuation of $2 trillion and plans to raise roughly $75 billion when it lists, potentially this summer.

When that occurs, retail investors will for the first time have a chance to own a piece of Elon Musk’s rocket and satellite empire.

SpaceX IPO: What we know so far

There’s a lot of excitement around this IPO — and I get it. Apart from my undying love for rockets and all things space exploration, the company has had one of the most impressive business trajectories of any private company over the last two decades. It dominates the space launch market, and its satellite internet division, Starlink, is generating significant operating profits.

SpaceX as a whole made roughly $8 billion in EBITDA (earnings before interest, taxes, depreciation, and amortization) on $15 billion to $16 billion in revenue last year.

And now, the company includes the social media platform X, Musk’s artificial intelligence (AI) project xAI, as well as the brain-chip company Neuralink.

But is that combination really worth $2 trillion today? Let’s look at the math.

The math behind the $2 trillion valuation

Projections for the combined company’s revenue next year sit at around $24 billion. A $2 trillion valuation would mean IPO investors are paying more than 80 times sales for the stock. That would be an astronomically expensive valuation, especially for a company in the trillion-dollar club — of which there are only 11 current members.

Nvidia, at the peak of its AI-driven rally, traded at only 40 to 45 times revenue. So you can see how extreme the premium SpaceX is seeking would be compared to other companies with at least a $1 trillion market cap in the table below.

Company	Market Cap	Price-to-Sales Ratio (TTM)
Nvidia	$4.3 trillion	20.1
Apple	$3.7 trillion	8.8
Alphabet	$3.7 trillion	8.9
Microsoft	$2.8 trillion	9.1
Amazon	$2.3 trillion	3.2
Taiwan Semiconductor	$1.8 trillion	14.9
Saudi Aramco	$1.7 trillion	2.3
Broadcom	$1.6 trillion	22.4
Meta Platform	$1.4 trillion	7.4
Tesla	$1.3 trillion	13.4
Berkshire Hathaway	$1.0 trillion	2.5

Data source: tikr.com. TTM = Trailing 12 months. Data as of April 7, 2026.

Keep in mind that these P/S ratios are based on these companies’ sales from the last year. SpaceX’s P/S of 75 reflects its forward expected earnings. As such, the massive valuation disparity is even worse than it looks in the table.

Why the retail investor allocation is a red flag

Beyond this, SpaceX is allocating 30% of its IPO shares to retail investors — that’s three to six times the norm. This may seem generous at first blush, but it seems opportunistic to me — as if the company is seeking to capitalize on the extreme hype surrounding the IPO. I think the company believes much of the “smart money” may be hesitant to buy in at this valuation.

Is SpaceX stock a buy around the IPO?

SpaceX is certainly an impressive company, and I mean, it builds reusable rockets — that’s just cool.

But if you buy this stock at 80 times forward revenue, you’d need everything to go perfectly for years for the company to even grow into its valuation, let alone deliver meaningful upside.

And while we are still waiting for the S-1 filing that will reveal the full financial picture, I suspect the company’s balance sheet and cash flows won’t be pretty. And the xAI acquisition detracts rather than adds value, in my opinion. That portion of the business is saddled with debt and incurred a more than $1.4 billion loss on just $107 million in revenue in the last quarter before it was absorbed into SpaceX.

I’m not saying to avoid SpaceX shares entirely. But I would wait for more information and a more reasonable valuation. I think you’ll get your chance at that following the IPO — mega-IPOs don’t have a great track record of holding their value in the near term.