Why investors price SpaceX at $1.75 trillion

SpaceX is at the center of a Wall Street debate over how to justify an extraordinary $1.75 trillion valuation ahead of what could become one of the largest IPOs in history.

With no clear public-market peers, investors and bankers are relying on unconventional comparisons to justify pricing the rocket and satellite company—stretching far beyond traditional aerospace benchmarks, News.Az reports, citing Reuters.

Instead of comparing SpaceX to legacy defense and aviation firms like Boeing or Lockheed Martin, some institutional investors are now benchmarking it against high-growth technology names such as Palantir and AI infrastructure companies like GE Vernova and Vertiv.

The reasoning, according to investors familiar with internal discussions, is that SpaceX should not be valued as a traditional aerospace or telecom company, but as a platform positioned to benefit from long-term technological shifts.

A major focus is SpaceX’s Starlink satellite internet business, which some investors believe should be measured against global digital connectivity markets rather than traditional telecom giants like AT&T or Verizon.

Supporters of the valuation argue that legacy telecom firms are weighed down by mature infrastructure and slow growth, while Starlink operates in a rapidly expanding global market for satellite connectivity.

On the rocket manufacturing side, investors point to SpaceX’s reusable launch systems, reduced launch costs, and dominance in commercial space missions as justification for premium pricing—comparing its position more to high-growth “AI infrastructure” companies than traditional aerospace contractors.

However, even these alternative benchmarks raise questions. At $1.75 trillion, SpaceX would trade at extremely high revenue and earnings multiples compared with most public companies, including some of the most richly valued technology firms.

Valuation experts say the lack of comparable companies makes pricing highly subjective. As one analyst noted, SpaceX’s dominance in satellite launches and cost efficiency is unmatched, but that uniqueness also makes traditional valuation models difficult to apply.

Some economists warn that the current valuation narrative may reflect investor enthusiasm as much as financial fundamentals, with expectations of future dominance in space and communications markets playing a central role.

Despite skepticism, investor interest remains strong, driven in part by confidence in Elon Musk’s track record and the belief that SpaceX is positioned at the center of multiple long-term growth industries.

The debate underscores a broader challenge for markets: how to price companies built on emerging technologies with no direct historical precedent.

News.Az 

By Aysel Mammadzada