Wall Street Scrambles to Justify SpaceX’s Staggering $1.75-Trillion Valuation
Wall Street investors and financial analysts are turning to unconventional benchmarks in a determined effort to put a defensible price tag on Elon Musk’s SpaceX ahead of what could potentially become the largest initial public offering in stock market history. The sheer scale of the company’s ambitions — and the absence of any truly comparable public peers — has left bankers reaching into unfamiliar territory.
At least one of SpaceX’s major institutional investors has reportedly been benchmarking the rocket and satellite giant not against traditional aerospace rivals like Boeing or Lockheed Martin, but against data-driven companies like Palantir Technologies and AI infrastructure heavyweights such as GE Vernova and Vertiv. The approach, described to Reuters by a source close to the matter, reflects just how extraordinary the challenge of pricing SpaceX really is.
The company has already filed confidentially for a US IPO and is expected to hold an analyst day on 21 April. At the much-discussed valuation of $1.75-trillion, SpaceX towers over traditional metrics that would typically be applied to businesses operating in aerospace or telecommunications — leaving investors and bankers in the uncomfortable position of inventing new frameworks on the fly.
SpaceX’s chief financial officer, Bret Johnsen, told IPO bankers on a recent conference call that selling into “the largest total addressable market in human history” was “pretty darn exciting.” He reportedly placed the total space economy opportunity at around $370-billion, while estimating the potential market for the company’s Starlink internet service at a remarkable $1.6-trillion.
Why Traditional Comparisons Fall Short for SpaceX’s Valuation
The usual go-to comparisons simply don’t hold up under scrutiny. In the launch services segment, Boeing and Lockheed Martin — whose United Launch Alliance joint venture competes directly with SpaceX — are the natural reference points. In internet connectivity, AT&T and Verizon would ordinarily fill that role. But financial backers insist these legacy companies fail to capture what SpaceX truly represents.
“I wouldn’t look at a legacy AT&T and Verizon as being very relevant to the economic model for Starlink, even though they’re both in the business of giving you communication,” a senior executive at one of SpaceX’s large institutional investors said anonymously. The argument is that legacy telecoms are weighed down by ageing fixed infrastructure, saturated domestic markets, and uninspiring growth trajectories — none of which apply to Starlink’s global satellite internet ambitions.
Instead, investors are gravitating toward Palantir Technologies as a spiritual comparable — citing its secular growth story, high return on invested capital, strong margins, and asset-light business model. Palantir recently traded at 43x expected revenue and 75x earnings, numbers that sceptics find alarming but SpaceX supporters view as proof that premium valuations are achievable when backed by exceptional performance.
Even so, the numbers are sobering. At $1.75-trillion, SpaceX would trade at roughly 110x its 2025 revenue estimates, according to calculations by PitchBook — making it more expensive on several measures than even Palantir itself.
PitchBook analyst Franco Granda framed it boldly in a recent note: “Investors should size positions with the understanding that they are paying a platform premium today for infrastructure monopoly economics tomorrow.” It’s a forward-looking bet on dominance, not a valuation rooted in today’s fundamentals.
For the rocket manufacturing side, investors are drawing comparisons to GE Vernova and Vertiv — industrial names that have seen their stock prices soar on the back of AI data centre spending. The argument is that SpaceX’s launch capabilities deserve a similar re-rating as the essential “picks and shovels” of the new space economy. GE Vernova trades at roughly 30x expected cash flow, while Vertiv sits at around 19x expected operating profit — both still well below what SpaceX’s proposed valuation implies.
Smaller funds are taking a different approach altogether. Jay Bala, a portfolio manager at Toronto-based AIP — which manages roughly $100-million in assets, with a significant portion concentrated in SpaceX — admitted the due diligence is largely a trust exercise. “I’m piggybacking on the largest funds in the world,” he said candidly, acknowledging that detailed financial data on SpaceX remains difficult to obtain.
Aswath Damodaran, a renowned valuation expert and finance professor at NYU’s Stern School of Business, cut straight to the heart of the matter. “Nobody else has that capacity to launch satellites in numbers and at the price that they can do — that’s their big advantage,” he noted. But he also raised an eyebrow at how investors are arriving at their numbers, suggesting much of the current pricing is rationalisation rather than rigorous analysis. “They’ve made the decision already that SpaceX is a great buy. Now they’re looking for some way that they can justify that,” he said.
With Musk’s companies historically commanding rich premiums driven as much by the founder’s personal brand as by balance sheet fundamentals — Tesla being the most obvious example — many expect the same investor psychology to fuel SpaceX’s public debut. Whether the numbers ultimately support the story remains the defining question as the company’s historic IPO edges closer.