SpaceX IPO: What investors should know

Key Takeaways

• Largest IPO in history: SpaceX is reportedly looking to raise $75 billion at a $1.75 trillion valuation.
• Three businesses rolled into one: Connectivity profitability funds high-potential but loss-making Space and AI segments.
• Sum-of-the-Parts valuation: Space and AI segments drive much of SpaceX’s valuation.
• Retail involvement and index inclusion: These will be key factors in the stock’s early trading.
• Historical IPO performance: While near-term returns skew positive, performance is mixed at longer horizons.

Executive Summary

• SpaceX is poised to be the largest initial public offering (IPO) on record; current expectations are for the company to raise $75 billion at a $1.75 trillion valuation.
• Despite remaining unprofitable, this would place it among the ten most valuable companies in the world based on current market capitalizations.
• A substantial portion of the company’s value is driven by the Space and Artificial Intelligence (AI) segments, which are currently unprofitable.
• While this offering is unique, historical IPOs provide a useful reference for forward returns. Our review of 30 major IPOs shows forward returns skew negative at 6 and 12- month horizons, with the majority facing substantial drawdowns in the first year.
• The projected size and retail participation are likely to drive significant volatility alongside excitement around the SpaceX IPO. 

Our Take

Three businesses rolled into one

SpaceX can be viewed as a combination of three businesses.

The first is Connectivity, which houses the Starlink business and accounted for over 60% of the company’s revenue in 2025^{Disclosure 1} . Starlink offers satellite coverage to more rural areas that other major network providers are unable to reach^{Disclosure 3} .

Despite subscriber gains, Connectivity growth decelerated in the first quarter with a sharp decline in Average Revenue Per User (ARPU) as the mix shifted toward consumer and international customers^{Disclosure 2} . This is the only profitable segment of the three and its cash flows largely fund the other two businesses^{Disclosure 1} .

Next, the Space segment generated just over 20% of consolidated sales1 last year and can be bifurcated between the Falcon 9 and Starship businesses.

• Falcon 9 is a mature and profitable launch platform, supporting commercial satellite deployments, Starlink launches, as well as NASA and Department of Defense missions.
• Starship is a longer-term, capital-intensive program currently driving segment operating losses. It is a next-generation, fully reusable, super heavy-lift system. If successful, Starship would significantly lower launch costs and enable deployment of larger and more capable satellites for the Connectivity business. The program remains in the testing phase, and its success is a key swing factor in the overall outlook^{Disclosure 3} .

Lastly, the Artificial Intelligence segment includes X and xAI, which the company acquired in February 2026^{Disclosure 4} . The headliner is xAI and its Grok AI model, while subscriptions and advertising on social media platform X also contribute^{Disclosure 3} . Despite more than $3 billion in sales in 2025, the AI segment posted an operating loss well over $6 billion amid heavy AI infrastructure investment^{Disclosure 1} .

Early trading considerations

Retail participation will be a defining feature of the SpaceX IPO. While most IPOs allocate roughly 5-10% of shares to retail investors, the company is reportedly targeting a 30% retail allocation^{Disclosure 5} . This may amplify the heightened volatility associated with IPOs.

Another driver of early performance will likely be how quickly it is included in major indexes, which will fuel systematic buying as index funds and active managers buy shares when the stock enters the indexes. Newly approved fast entry rules put SpaceX on track to enter the Nasdaq-100 in early-to-mid July^{Disclosure 6} , but the timeline for S&P 500 inclusion is cloudier. Proposals are still being discussed, but it appears likely the stock will not join the S&P 500 until December at the earliest^{Disclosure 7}.

Historical IPO performance

The forward performance of thirty major IPOs over the last 15 years provides a useful historical reference, albeit an imperfect one, given the uniqueness of this offering.

• Of the 30 major IPOs we reviewed, performance was uneven with large gaps between stocks. Investors should be prepared for elevated volatility and the potential for significant drawdowns when participating in new listings.
• The table below shows that while returns relative to the closing price on day 1 tend to be positive over the first three months, median returns flip negative at the 6- and 12-month horizons.
• Notably, 19 of the 30 stocks reviewed endured maximum drawdowns of at least 50% in the first year

As an additional data point, the median return from an IPO’s opening price to its first-day close is -1.0%, with only 37% of stocks finishing above their opening price.

Bottom Line

The projected size and retail participation are likely to drive significant volatility alongside excitement around the SpaceX IPO. The longer-term outlook depends on balancing the Space and AI growth potential against near-term losses