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We Think the SpaceX IPO Is Overvalued

• m-hodges 3mo ago
  > Even at $63 per share, we give SpaceX a lot of benefit of the doubt in two of the three scenarios, in which we assume the company can achieve a rapidly reusable Starship rocket enabling multiple launches per week and successfully commercialize data centers in space. > In our downside scenario, orbital data centers won’t work or offer any advantage over terrestrial ones. We surmise that the company, having invested tens of billions to find this out, would cut bait on the project sometime around 2028, the way management walked away from plans to build multiple small-car factories at Tesla.
  • kldavis4 3mo ago
    The orbital data center thing is really strange. Without some kind of massive technological breakthrough the physics of an orbital data center make no sense. Napkin math for a single data center including solar panels, radiators, compute and structure is somewhere on the order of ~6500 tonnes. Let's say Starship can put 100-150 tonnes into orbit per launch, that is somewhere between 40-65 launches for just one single orbital data center.
    • jiggawatts 3mo ago
      The actual “plan” is to just put a couple of GPUs in each Starlink satellite for inference. They’re not launching something the size of a building!
      • kldavis4 3mo ago
        That just doesn't seem to justify anywhere near the valuation though does it?
        • jbxntuehineoh 3mo ago
          shhhhhh the line WILL go up, whether you like it or not
        • jiggawatts 3mo ago
          Disclaimer: I suspect "data centers in space" is just blatant market manipulation by Elon, exactly the same as he'd done dozens of times before with self-driving, etc. Having said that... it might justify the valuation if every other data centre build-out gets blocked by insufficient power supply. Might.
          • fc417fc802 3mo ago
            Bear in mind that you could take the solar panels that you would have launched into orbit, use the launch costs to purchase additional solar panels, batteries, and some additional land, and build a data center plus solar farm plus grid scale battery bank on the ground for probably (almost certainly) less than the combined launch costs. I think the only way compute in space works out financially is if there's so much bulk data already up there that downlink bandwidth becomes a serious bottleneck.
      • SwellJoe 3mo ago
        Which is irrelevant to SpaceX bottom line. Launching GPUs into space, whether by twos or by tons is not going to be a profitable venture. It's just a wildly expensive bad idea, and it is obvious to anyone that understands how much it costs to put things in space. A man who runs a rocket company knows how much it costs. He knows it's dumb as hell. But, he also knows the average investor is even dumber, because TSLA still trades at ~357 PE.
    • credit_guy 3mo ago
      > Let's say Starship can put 100-150 tonnes into orbit per launch, that is somewhere between 40-65 launches for just one single orbital data center. Ok. And why does it follow from this that the physics of an orbital data center makes no sense?
      • adgjlsfhk1 3mo ago
        Because 50 rocket launches seems hard to make cheaper than a building.
        • tekla 3mo ago
          The cheapness of the building is not the problem that is being dealt with. The construction of the building w/ zoning and the political fights and utilities arguments and years of time and whatever is what is being dealt with by putting it in orbit.
          • ink_13 3mo ago
            I bet you could build a fully off-grid DC that didn't guzzle water for less money than launching a rocket today, and there would be thousands of people lining up down the block to sell you more than enough land to do it a thousand times for cheap. This just isn't happening yet because it is still quite possible to build on-grid DCs supplied with fresh water for cooling despite what some people would have you believe. And then when you build on the ground you could even send people to it to swap hard drives and GPUs when they inevitably fail or upgrade them to keep them current. At lower rates of failure than they would in space because we have a planetary magnetosphere protecting us from cosmic rays.
          • kaashif 3mo ago
            It would be extremely funny if putting things in space is cheaper and faster than dealing with zoning and local politics. It implies that China, which can cut through much red tape and has great (and improving) utilities and infrastructure, lots of energy, can just build normal datacenters and save the cost of dozens of space flights.
    • hparadiz 3mo ago
      The video they posted today outlines their specs. They are gonna be smaller. About 100T. Based on Starlink architecture but with way larger radiators and solar panels. Apparently the design is simpler than existing Starlinks because it has fewer different parts. Specs: https://x.com/SawyerMerritt/status/2064108916611420273?s=20 https://x.com/SawyerMerritt/status/2064108916611420273?s=20
      • pryce 3mo ago
        I feel like we are going to relive the hyperloop-decline with the specs of proposed orbital datacentres. But the hyperloop was in one regard a success, in that it built temporary hype. Maybe it was even named after that.
        • SwellJoe 3mo ago
          It also achieved Musk's actual goal: derailing and delaying mass transit initiatives, the California High-speed Rail project, in particular. He knew it was bullshit. He's dumber than most people realize, but he's not dumb enough to actually believe all the bullshit he spouts.
          • hparadiz 3mo ago
            He's sending the weirdest mixed signals. If we want to hit anywhere near 1 on the Kardashev scale we're gonna need a planet wide high speed rail system. They should just give the major tech companies naming rights to the stations for 35 years for like 2-3 billion a pop and scale up construction 5x. I don't get the slow roll on this thing. The stations in LA and SF are gonna end up sort of like Tokyo station for the Shinkansen. A giant mall area with a huge amount of commerce. Why isn't this thing done yesterday?
            • nine_k 3mo ago
              > Why isn't this thing done yesterday? Land rights. Environmental reviews. Various suits attempting to exert extra compensations for tangential (at best) issues. Basically the California around.
    • datadrivenangel 3mo ago
      They'll do smaller satellites, and if they can get an order of magnitude improvement on cooling and power generation to weight ratios, it'll be close to the same order of magnitude cost-wise as a terrestrial datacenter. 10x the cost is likely not enough to make it all work, so it's a bad idea, but it's possibly less bad than using lead ballast for starship launches... maybe.
      • toomuchtodo 3mo ago
        “Supervised Full Self Driving.” Buy the hope, sell reality.
      • jmalicki 3mo ago
        Is there some reason significant improvement on cooling and power generation to weight generation ratios is even remotely possible?
        • datadrivenangel 3mo ago
          Better integration allows for a lot of potential improvements, so if the cooling and power and compute are tightly integrated and use structural materials it may be plausible. Still not going to be cheaper, but if you get moderately optimistic it's cheap enough to maayyyybe start looking like a source of demand for starship if you can find suckers (government) to pay 10x the price per compute.
      • amluto 3mo ago
        I still don’t see it. The equipment is very, very expensive, is subject to shortages, and has residual value after five years. But these very low Earth orbit satellites literally burn up when they run out of fuel for station keeping. Even if you pay a bit more to position them in a higher, more stable orbit, you still can’t physically get to them to repurpose equipment. Check this datacenter gadget out: https://www.marvell.com/blogs/sustainable-computing-with-cxl.html https://www.marvell.com/blogs/sustainable-computing-with-cxl... That trick is a complete nonstarter if the modules you’re trying to reuse are in space.
    • overgard 3mo ago
      I'm pretty sure he's full of shit and has zero real intention of building orbital data centers. It makes for a good headline, which is what these AI companies are in the business of. The math doesn't math and the logistics of maintaining and building the datacenter seem insane.
      • ericd 3mo ago
        They claim they want to get to a gigawatt per year by the end of next year, so we won't have to wait long to see.
        • bandrami 3mo ago
          He also claimed in 2015 that nobody would be driving their own cars by 2018. Meanwhile I've seen a driverless car once in my life.
          • ericd 3mo ago
            Sure, I think everyone knows he's not batting 1000. I've used Waymos and FSD, and they were both great, so I don't think we're too far off now.
            • Sammi 3mo ago
              My man, it's 2026. How long will you have to wait for the spacex claims to become "not too far off now"?
              • ericd 3mo ago
                Which claims? I’ve been a SpaceX investor for about 8 years now, I’m completely satisfied with their progress, even despite the Starship setbacks, they’ve done astounding work on all fronts. I’m not holding my breath for humans on Mars or us becoming a Kardashev 2 civilization, if that’s what you’re asking.
                • 3mo ago
    • JoshTko 3mo ago
      It's a litmus test of who understand basic physics and thermodynamics
    • vagab0nd 3mo ago
      I think it comes down to scaling and removing the bottlenecks. If you build one data center on earth, you did just that. If you build one in space and make it work and cost effective, you can scale infinitely (which is why SpaceX is uniquely positioned), until you hit the next bottleneck (which is why Tesla is building a fab). Tangential: If you play Factorio or Satisfactory, this is _all_ you do. Removing bottlenecks.
      • lenerdenator 3mo ago
        > If you build one in space and make it work and cost effective, you can scale infinitely "If we can just keep consuming massive amounts of capital, at some point, we'll turn a profit. Maybe even a big one." It's not 2019 anymore, but this mindset acts like it still is. SpaceX, along with its wanna-IPO classmates OpenAI and Anthropic, are going public because there's basically no more private investor money left and there's no political will (outside of whatever the hell is going on in Donald Trump's head) to lower interest rates to what they were in the golden age of blitzscaling. They have to ask the public for more money. They just don't have enough humility to do it on decent terms, as evidenced by the IPO deals they're floating. If this fails to produce what you're talking about - which is likely given things like "speed of radio transmissions", "thermal conductivity in a vacuum" and other things governed by those pesky laws of physics - the game's over.
    • numpad0 3mo ago
      There are people arguing it has to be a signal processing backend for a realtime radar system based on Starlink Direct-to-Cell antennas. IMO, that lines up with a weird remark from Musk around stealth jet obsolescence few years ago, and makes sense.
    • wmf 3mo ago
      I see it as a hedge against NIMBYs. If terrestrial data centers literally can't be built then orbital is cheaper by definition. If not, just don't build them.
      • Atotalnoob 3mo ago
        Worse, it’s “don’t worry, the next data centers will be in space, so it’s okay if the ones we are building right now destroy the environment, there won’t be anymore!” It’s the exact tactic he used with California HSR
        • wmf 3mo ago
          I don't see anyone making that argument and we shouldn't allow it. The "temporary" generators are bad enough.
    • fc417fc802 3mo ago
      I think that's looking at it the wrong way. Just view it as a fleet of satellites with computers in them that exist for the purpose of selling capacity. I don't see any issues with the physical fundamentals but the economics in terms of dollars either per flop or per bit transferred is where I don't understand how it's supposed to work. Satellites are really expensive and electricity on the surface is relatively cheap. What hypothetical prospective customers are willing to pay the necessary rates? I understand that bandwidth back to the surface is expensive but are we really expecting so much raw data to be trapped in space that it justifies sending computers into orbit in order to crunch it at the source?
      • queenkjuul 3mo ago
        The physical fundamentals don't work. Radiating exhaust heat is exponentially harder in space than in the atmosphere.
        • fc417fc802 3mo ago
          What is the equilibrium temperature of a panel of black sheet metal hanging out at an orbit of 1 AU? Because if the thing is solar powered then it cannot exceed that temperature on average (ie across the entire mass) due to energy being conserved. You can do goofy things like using solar power coupled with a heating element (such as a GPU) to shift more heat to one part of the panel or another (ie employ an insufficient heat spreader design) but you fundamentally cannot exceed the equilibrium temperature on average.
          • queenkjuul 3mo ago
            Well the equilibrium temperature of outer space is roughly 0K. So how do you remove megawatts of heat in 0K?
  • ink_13 3mo ago
    > In our downside scenario, orbital data centers won’t work or offer any advantage over terrestrial ones Technologically, will they work? Shovel enough money at the problem and there's no reason they shouldn't. Rack up some GPUs in a shipping container, attach a couple of solar panels to the outside, zip-tie a Starlink to the door. Except for the little problem of heat. Space isn't cold, it's more of a giant Thermos bottle, and they gotta park in full sunlight, which is famously the only thing supplying the heat that keeps the entire planet alive. Good luck to them with their radiator setup. But economically? There's no chance. Too expensive to get into space, too many auxiliary systems required, no maintenance is possible, and, given the lead time of prepping payloads for launch versus the rate of new developments in AI hardware, likely badly behind the times if not outright obsolete on the day of liftoff. There is no shortage of land despite what some in the media would have you believe. Those same solar panels work at ground level. DCs don't have to be water guzzlers or grid destabilizers. They'd be better off by every metric solving terrestrial problems for the same money. Of course they won't work. It's ludicrous that we have to even entertain the thought of otherwise.
  • protocolture 3mo ago
    Do they have a projection for what the company will be valued when he gets to mars by 2017?
• bayarearefugee 3mo ago
  > We Think the SpaceX IPO Is Overvalued Well... yeah, sure, everyone thinks that. And the fact that it doesn't matter and won't impact demand for shares illustrates how increasingly and dangerously untethered the stock market is from reality.
  • nandomrumber 3mo ago
    The market can remain irrational longer than you can stay scared of it.
    • the_real_cher 3mo ago
      The federal reserve can keep printing money for longer than anyone can afford.
      • epistasis 3mo ago
        We can print more money, but it's not about "affording" it, the money printing at most changes the value of the dollar (i.e. inflation/deflation). The rest of the world wants dollars, and as long as they do, the US benefits massively from that demand, and it would be foolish not to satisfy that demand, as it's pure benefit to the US. It seems that many are devoted to ending the status of the dollar as the reserve currency of the world, but it's a strange and subversive thing for any US resident to want or desire.
    • epistasis 3mo ago
      Let's go check on the cautionary tales of the Tesla shorts.... poor folks, we let them run around in the yard of the asylum without a fence because they have lost the motivation even to run away. They just keep mumbling about PE ratios....
      • tananaev 3mo ago
        It doesn't mean it's a good investment. It's just a personality cult. I suspect it might take a generation or more to settle on some reasonable price.
• SeanAnderson 3mo ago
  Everyone says SpaceX IPO price is too high, but it's the most interesting IPO in a long time, it's critical to the US government, and America is, frankly, addicted to gambling. I'm not convinced it's going anywhere but up for a long while.
  • epistasis 3mo ago
    Very little of the IPO is related to anything government, or space for that matter. It's mostly a rental service for some GPUs that were hoarded, with the promise that somehow in the future the $2B/month that Anthropic and Google are paying SpaceX for compute infrastructure will somehow grow, that somehow SpaceX will grab valuable GPU real estate before others and continue renting it to others who actually make productive services.
  • thrownthatway 3mo ago
    [dead]
  • sumeno 3mo ago
    Even SpaceX's own documents estimate the space stuff to only have an addressable market of $370B, and it's not like it's a document full of conservative estimates considering they estimate their AI at approximately the entire GDP of the United States.
• p-e-w 3mo ago
  If SpaceX is indeed overvalued (which I have no opinion on), it above all else demonstrates how unimportant spaceflight still is. SpaceX has been the only game in town for quite a while now, to such an extent that the intelligence agencies of foreign governments have no alternative but to launch with SpaceX. They now do more orbital launches than the entire rest of the world combined. If they really are worth less than Microsoft, then it seems space just doesn’t matter that much, because SpaceX is space for all practical purposes.
  • killingtime74 3mo ago
    I think you are conflating mattering and making money. You can matter a lot, generate a lot of social good and not make money. This article is just about the making money part.
    • actuallyalys 3mo ago
      I think this is right. For example, GPS is tremendously useful, but you can use it for free. Similarly, while there are commercial weather services, a lot of people access the ad-supported versions[0] or get it from their government’s weather agency. [0]: which obviously provide some revenue, but much less than the value provided.
  • mlyle 3mo ago
    SpaceX is important to launch and telecom, which are two big space verticals but not all of space. Further, space is just reaching the point it can really grow. Space is strategically important but perhaps not as directly economically valuable as Microsoft yet, and SpaceX is just a fraction of that value.
  • adgjlsfhk1 3mo ago
    Part of the problem with this argument is that for them to be worth a lot, you need both the amount of stuff launched into space to go up massively and for no one else to be able to build a rocket that's anywhere near as good. Spacex is doing really well now, but if Rocket labs, China, Blue Origin, or anyone else manages to make a rocket that's half as good, spacex needs to maintain a monopoly despite not having anything especially magic.
• mrcwinn 3mo ago
  >However, we assign this scenario, in which both Starship is reusable and scaled orbital data centers are highly successful, a 7% chance of happening I may agree with their overall sentiment, but I think this sort of formulation is just silly nonsense from analysts who build models instead of companies.
  • throwaway85825 3mo ago
    You need a probability in order to estimate expected value.
  • ncallaway 3mo ago
    Okay, but if someone is going to invest money into companies they need some way of deciding what they think a company is likely to do in the future. Are these kinds of reports mostly a lot of window-dressing around a gut-feel about what might happen in the future? Yea, of course. But, there's not really other options. Pretty much all the other options for predicting how much money a particular company is going to make in the future will also boil down to a gut-feel.
• hparadiz 3mo ago
  I want some shares purely as a novelty. Don't really care about the price. It's not about making money. It's about owning a piece of the future.
  • bdangubic 3mo ago
    If you want to own a piece of future buy some coal stock, it is what future looks like in America :)
  • andyst 3mo ago
    well the good news is, you are exactly who they are looking for! you could just buy some merch though, which has the same effect otherwise using ROIC or CAGR might be more optimal way to evaluate your investments
    • hparadiz 3mo ago
      I already walked away with a 140k gain in TSLA. I did get some SpaceX t-shirts though. Most of my portfolio is decidedly boring right now.
    • laichzeit0 3mo ago
      Hey, I’m doing the exact same as OP and so is everyone at work I know who has a memefolio of shares. You never bet against papa Musk. You guys are looking at these IPOs all wrong. Nobody is looking at valuations. It could open at $200 a share it would make no difference.
• oldfuture 3mo ago
  And the prospectus says it plainly: "Mr. Musk will be able to control the outcome of matters requiring shareholder approval." Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%. What Musk Controls: - CEO removal = his consent. You can't fire him even if he destroys the company - Take business for himself. SpaceX gets a rocket deal? Musk can say "I'll do it at Tesla instead" - 85% voting forever. No expiration, no time limit, permanent control - Board elections. You have no power to elect directors you trust
  • glaucon 3mo ago
    I haven't read the prospectus but I would be interested to know, when he dies, to what degree the "... control the outcome of matters requiring shareholder approval" part will be inherited. Does that facility just go along with the Class B super-voting shares? And if it does what does it mean if more than one person inherits his shares? On the subject of the governance structure this [1] is worth a read ... "The company significantly limits shareholders' rights to sue. SpaceX's bylaws will make it clear that anyone who owns shares "irrevocably and unconditionally" waives all rights to pursue a jury trial. Shareholders will also be prohibited from bringing class actions against the company, its directors, officers, controlling shareholders or bankers tied to the IPO, according to the filing. Instead, shareholders will be subject to mandatory arbitration, which had long been illegal in the U.S. The Securities and Exchange Commission reversed its position, opens new tab in September, allowing companies to adopt mandatory arbitration policies, which are private proceedings overseen by arbitrators." ... I can't remember how much he spent in Pennsylvania but you might argue it was money well spent. [1] https://www.reuters.com/sustainability/boards-policy-regulation/spacex-ipo-gives-musk-sweeping-power-curbs-shareholder-rights-2026-05-06/ https://www.reuters.com/sustainability/boards-policy-regulat...
    • nickff 3mo ago
      The voting issue is problematic, but the limits on shareholder class-actions seems like a good idea. Do you know of any shareholder class-action lawsuit that actually benefited the shareholders? They only ever seem to benefit the plaintiff lawyers pursuing the case.
• chvid 3mo ago
  My trading app (Nordnet - big in Scandinavia) is plastered with ads for the SpaceX IPO. I don’t think I have ever seen this before.
• antonvs 3mo ago
  Not a criticism of the article, but... ...from the pages of Duh Magazine
• ancorevard 3mo ago
  You should beware of the predictive power of Morningstar before you read/take their advice.
• jmyeet 3mo ago
  From SpaceX's S-! it bases its valuation on the total addressable market of 3 markets, which is made up of: 1. Space operations: $370 billion; 2. Connectivitiy: $1.6 trillion, roughly split between mobile and broadband; and 3. AI: $26.5 trillion, which includes $22.4T in AI Enterprise applications, $2.4T in AI infrastructure, $760B in subscriptions (ie Grok) and $600B in digital advertising. So immediately we see the limits of the space market. SpaceX did 170 launches in 2025. At $100M each, that's $17 billion in revenue and Falcon 9 launches just don't cost that much. That brings Starship into the picture but that program is arleady at $15 billion spent without a single dollar in revenue. So we know from the outset that only the other markets can really justify the STarship prgoram because you have to remember that STarship has to compete with Falcon 9. Or, even worse for SpaceX, a Falcon 9 competitor. Now, as for Starlink, this one is interesting. Starlink has a big advantage when you need mobile broadband (eg planes, boats) as there's nothing really equivalent, Yes, there's 5G and that's fine in populated areas on, say, RVs and such. But the receivers are expensive. I think Starlink is going to have a hard time competing with 5G, mainly because 5G already exists and Starlink handhelds are predicated on STarship being able to launch sufficient low-altitude V3 Starlink satellites, which themselves have a more limited life because they are lower altitude. And you're still going to have to deal with per-country licensing, marketing, regulations, etc. I wonder how much of this is predicated on military applications. But let's get to AI as that's the most hand-wavy (IMHO) of all this. First, digital advertising. Well, when Elon bought Twitter it had $4.5B in ad revenuie. Now it's $1.8B. I also think Twitter is fundamentally limited so that's just not going anywhere. Twitter just isn't 10x'ing it's audience (IMHO). Subscriptions? I think this is a dead market. For everyone. Why? There'll be a race to the bottom, hardware will get cheaper, eventually AI agents will be run locally (even on phones, eventually) and it's just not the cash show OpenAI, SpaceX or Anthropic think it is. Let's also dispense with orbital AI data centers. It's a completely dumb idea. it's going nowhere. Don't believe anyone hyping it up. It makes zero sense and it will never amount to anything. SpaceX seems unable to monetize their AI investments thus far. How do I know this? Because you don't lease DC space and GPUs to Google if you have a better use for them. So it not only looks like you're falling behind but you also need the cash. Also, this is dependent on getting enough GPUs. Published details about the Google deal seems to allow Google to cancel or revise the deal if SpaceX is unable to deliver so there is a huge risk here. What none of these companies (SpaceX, Anthropic, OpenAI) seem to be addressing is what happens when future generations of hardware come out? What happens when running models locally becomes more and more viable? What if there is no expensive hardware moat? What happens when AI models get commoditized? I personally believe this last one will happen and China will make sure it happens. So all in all there are a ton of risks here. I am skeptical about the long-term prospects of OpenAI in particular and Anthropic less so but I think xAI's (ie Grok's) future is way more uncertain. I'm actually most confident in Google's future here because they haven't bet the company's future on AI not imploding.
• rpmisms 3mo ago
  I'm generally going to avoid betting against Elon.
  • jaimex2 3mo ago
    The downvotes are a good indicator you have the right idea.
    • rpmisms 3mo ago
      Doesn't really matter. Elon just has a good track record of delivering value for investors, and will move mountains to make it happen.
• dash2 3mo ago
  I wish Ed Zitron (currently also front page HN) would adopt this calm, measured writing style. It’s much more convincing and shorter to read too.
  • z3ugma 3mo ago
    Right?? His takes are so good but his brusque, smarter-than-you finger wagging is offputting
  • themafia 3mo ago
    > It’s much more convincing Shouldn't your concern be whether it's true? Who asks to be "convinced?"
• verandaguy 3mo ago
  I need to understand what possible benefit there is to doing DCs in space. The cost would be, no pun intended, fucking astronomical. The cooling situation would make no sense at all -- the major up-and-coming application of DCs, LLM training, has absurd cooling requirements even here on earth where convective cooling is an option, to the point where many DCs use open-loop cooling. Latency might be better, in some cases, I guess, but probably not by some groundbreaking amount. Who is this product for? How the hell did "data centres in space" make it into the prospectus at all? More to the point, why is Morningstar being so generous with their interpretation of that line of business? It's plainly insane, and you don't need an advanced degree in physics to understand why.
  • tim333 3mo ago
    The main argument is if you scale up a lot you run out of electricity supply on Earth.
  • NathanKP 3mo ago
    It's easy to see the benefit in DC's in space if you look at a few ingredients: 1. The recent Iran drone attacks on AWS data centers 2. Growing anti-AI and anti data center sentiment at home, plus Larry Fink (ceo of Blackrock) in a recent interview being terrified of dissident groups using consumer drones to attack data centers. 3. Anthropic, Grok, and other AI vendors becoming more and more integrated into defense and military, plus increasingly reliance on AI for other national surveillance systems Data centers are and will be targets, both for national military attacks as well as home grown dissident attacks, so they are proposing to move some of the critical workloads to somewhere that the only group that can attack the data center hosting the workload is a nation state with space launch capabilities. That significantly reduces the number of actors that can attack the data center. And if the US wants to they can probably bomb all the other space rocket launch facilities worldwide in less than 24 hours, leaving extremely limited capability to attack a space hosted DC. Is it insane? Probably, but the US has done insane things with military budget before, and will continue to do so for a long time. If you are Elon, its a great time to milk that US defense budget for some more R&D, and even if the main project doesn't work out, he's still going to be able to keep some innovations within the company and apply them to Starlink and other more realistic endeavors.
• Joel_Mckay 3mo ago
  Maybe, but his proposed share structure is hilarious. I can't tell if Musk is serious or trolling Wall Street again. =3
• 6stringmerc 3mo ago
  This is the most white collar “we call bullshit” type of writing I’ve seen in a long time and I’m here for it. Not a good sign for the next two AI IPOs either. SpaceX had the hubris to release their S-1 publicly and whatnot. This is going to be “Hot Garbage Summer” in the equities market lmao. GG VCs.
• JoshTko 3mo ago
  And water is wet
• GMoromisato 3mo ago
  A lot (everything?) hinges on orbital data centers. If they don't work, SpaceX is overvalued. SpaceX plans to launch 120 kW satellites, each weighing 1.7 tons. Let's be conservative and say it ends up being a 100 kW satellite massing 2 tons. Let's be conservative and say Starship can launch 50 tons to orbit for $20 million ($5 million more than a Falcon 9 launch). 50 kW per ton x $400K per ton = $8,000 per kW = $8 million per megawatt in launch costs. That means a 100 megawatt orbital data center will cost $800 million to launch. You need about 833 satellites for 100 megawatts, so let's round up to 1,000 satellites. Let's say one of these satellites cost $3 million (that's probably high, but let's go with that for now). That's about $3 billion for satellite manufacturing. Bottom line: It will cost SpaceX $4 billion to launch a 100 megawatt data center. Anthropic is paying SpaceX roughly $50 million per megawatt per year. SpaceX could sell access to its data center for $5 billion per year. Assuming the satellites last for 4 years, that's $20 billion in revenue from $4 billion in costs. Please correct my math/assumptions, but this rough calculation shows that SpaceX could be right and Morningstar could be wrong.
  • ncallaway 3mo ago
    Morningstar does think it's a possibility that Starship ends up being highly successful as a reusable platform and that orbital data centers end up being very successful, they just assign a 7% chance for that outcome.
    • GMoromisato 3mo ago
      Fair point. Even if the math works, SpaceX could fail at execution for any number of reasons.
    • crowcroft 3mo ago
      I guess to this point the argument for the valuation is just, do you think Elon will beat the (very bad) odds? I wouldn't take that bet, but I can see why some people would.
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• mattas 3mo ago
  Data centers at the bottom of the ocean make more sense than data centers in space.
• Hansenq 3mo ago
  You can absolutely level this claim against Tesla too. When deliveries dropped a year ago, the stock price didn't go down. Tesla's stock is disconnected from the fundamentals and every stock investor today knows this. Why would SpaceX be any different? If anything it would be even more disconnected from the fundamentals than Tesla is, given how much more control it gives Elon. SpaceX stock is a bet on Elon, full stop. It has nothing to do with space, data centers, AI, or whatever technology they're currently working on; it's a bet that Elon will figure something out. (and if you need any example of this, just look at Twitter--he engineered an exit for his X shareholders at a higher valuation [at the expense of SpaceX, but a positive exit nonetheless])
  • tyre 3mo ago
    Yeah you can’t go into this with any expectations or later complaints. Everyone knows at this point that he’s going to do whatever the fuck he wants. If you give him money, that’s what it’s for. I say this entirely neutrally. Some people want to invest in that—and he’s made a boatload of money for those who have thus far!—while others find it insane. But you don’t get to buy into this and complain.
    • kurthr 3mo ago
      If you have ETFs or index tracking funds in your 401k you're going to buy it. In fact, you'll buy more of it than is going on sale. Since they only need to issue 5% of the stock for it to show up as a 20% market cap in the QQQ index and tracking funds own over 20% of the market, they pretty much have to buy all the shares. Welcome to market manipulation 101.
      • fauchletenerum 3mo ago
        It's only being added to the Nasdaq 100, not the SP500, and only a very small number of people have their 401K tied to the Nasdaq Edit: Actually, I didn't realize that it's being added to MSCI, so I was wrong: https://www.reuters.com/business/media-telecom/msci-confirms-early-index-inclusion-rules-ahead-spacex-ipo-2026-06-08/ https://www.reuters.com/business/media-telecom/msci-confirms...
• a34729t 3mo ago
  IMO the purpose of going public is primarily to make it hard to nationalize SpaceX, which some people have called for.
• SilverElfin 3mo ago
  Also see Aswath Damodaran’s updated analysis. It’s not quite as dire as Morningstar but is still lower than what musk wants. > At the rumored pricing of $1.8 trillion for the company, it is too richly priced for my tastes, given my valuation of $1.25-$1.35 trillion for the equity in the company. https://aswathdamodaran.blogspot.com/2026/06/a-weeks-ago-i-assessed-value-of-spacex.html https://aswathdamodaran.blogspot.com/2026/06/a-weeks-ago-i-a...
• swader999 3mo ago
  I don't think euv capacity will ever make data centers in space a thing.
• signatoremo 3mo ago
  No matter what a stock broker thinks, the market decides. At this moment SpaceX’s shares are oversubscribed: https://www.bloomberg.com/news/articles/2026-06-08/spacex-ipo-is-said-to-be-well-oversubscribed-orders-close-wed https://www.bloomberg.com/news/articles/2026-06-08/spacex-ip...
  • tim333 3mo ago
    Also trading on crypto futures markets at ~$160 vs the $135 IPO price so you should probably buy and flip to a greater fool.
• exabrial 3mo ago
  No duh. This isn't different than any other tech IPO in the last 15 years.
• taffydavid 3mo ago
  Why are we considering data centers in space? What problem does it solve? I don't understand this concept at all. Surely putting server racks in orbit where you can't do basic maintenance without sending someone up there is a terrible idea? It just always puts me in mind of the story of an IT guy having to travel for two days to go to a premises and turn on a server that three separate people ensure him was already on.
  • martheen 3mo ago
    The only people considering data centers in space are those too out of touch to remember that their vacuum flask retain heat for hours. At any usable capacity we'd be talking about massive field of dissipators, which can't be possibly profitable considering there are far more lucrative payload compared to dumb panels. Some would pretend there's a just around the corner tech to solve the heat waste, but if such tech really exists one of the criticisms of terrestrial data center (wasting stupid amount of water) would've been solved anyway making space data centers even less viable. And there's also bitflips. Acceptable for astronauts carrying normal laptop to watch movies, but in a data center? Solving it through redundancy easily cut the usable capacity to half, and there's not enough shielding with any competition for the payload slot. The usual criticism of Mars colonization is maintaining a base in Antarctic is already a heroic effort despite being relatively easier. Google and Microsoft mostly abandoned their "data center underwater in nearby shore" plans even though in those the tech would've only sat for few minutes going down or alternatively waiting for the problematic module being floated to the surface.
    • taffydavid 3mo ago
      Great, so I'm not just some idiot who doesn't get it. Why then is anyone entertaining this IPO when it's clearly based on such a dumb plan?
• dlcarrier 3mo ago
  The real question is whether or not the stock will be more overvalued, immediately after the IPO. My brother earned a bunch on the Rivian IPO, despite considering it overvalued, because he figured it likely wasn't overvalued enough.
• marysol5 3mo ago
  For a moment then I thought this was the communist newspaper Morning Star https://morningstaronline.co.uk/ https://morningstaronline.co.uk/ No wonder they think it's "over valued"
• slowmovintarget 3mo ago
  80% of all mass launched from Earth in 2025 was launched by SpaceX, and 95% of those launches were with reusable systems. That dwarfs all other launch capabilities on Earth, including all governments. Short and medium term value may be shaky if you evaluate SpaceX as a typical business. Compute in orbit is "stupid" only to those who don't think it through. Their biggest initial customer for that feature will be Google, and through Google, Apple; two of the highest value tech companies on Earth. Seems like a fascinating flywheel to me.