SpaceX readies for the biggest IPO in history – but investors should beware the ‘momentum

SpaceX will list its shares on Nasdaq today in what is expected to be the biggest IPO in history at a £1.75trillion valuation.

The deal is reportedly over two times subscribed, with demand double its $75billion fresh capital raise.

With up to 30 per cent of the offer earmarked for retail investors, it is expected to be a blockbuster market debut for Elon Musk’s rocket firm.

Ed Croft, founder and chief executive of investment research platform Stockopedia, runs through the numbers and gives his verdict on whether SpaceX’s debut will rocket or be brought back down to earth.

A week ago, my son came back from a post-university trip reporting his friendship group’s entire investment thesis is to pile into the SpaceX, Anthropic and OpenAI IPOs ‘because they will all double.’ 

That, for what it’s worth, is about as pure a sentiment signal as we’ll ever get.

At Stockopedia, we’ve looked at the prospectus and run the numbers… and I’m afraid we have bad news for the bulls. 

By our StockRanks methodology, SpaceX looks like a textbook ‘Momentum Trap.’

I want to be fair here. SpaceX is, plausibly, the finest engineering company of its generation. The published numbers on the operating business are really rather impressive.

Starlink – its connectivity segment – booked over $11 billion in revenue in 2025, up 50 per cent year on year, with operating income of nearly $4.5billion growing 120 per cent.

Its space business is a near-monopoly. We can’t deny the growth here. The problem is the price.

The numbers don’t fit the fairytale

SpaceX has spent roughly $20.7billion of capex against just $18.7billion of revenue. Free cash flow was deeply, structurally negative. 

This is a company that consumes more cash than it earns, by design, to fund an AI build-out.

And the valuation rests almost entirely on that AI build-out.

The world’s foremost valuation guru, Aswath Damodaran, said the prospectus total addressable market pushes ‘into fantasy land for AI ($26 trillion) and the limits of plausible for space and connectivity’. 

He values the equity at about $1.3trillion.

Lead underwriter Goldman Sachs reportedly shared potential forecasts with investors that have SpaceX’s AI revenue growing roughly 100x, from about $3.2billion in 2025 to about $322billion by 2030. 

Total revenue is modelled to reach $474billion by 2030 (Starlink $144billion, Launch $8.3billion).

So there it is – the $1.75trillion valuation rests on an assumption that a unit which lost $6.4billion last year, and rents capacity to rival Anthropic because its own Grok hasn’t gained traction, will outgrow the entire history of corporate America – while commercialising space-based data centres.

Of course, SpaceX can and will grow – and of course let’s hope the Dyson swarm sci-fi fantasies come true.

But the argument is that the price already assumes it grows faster than any company ever has, in the one segment where it’s struggling.

The share price has grown by roughly five times in 18 months, which has been set entirely by private tender rounds with no open-market price discovery.

The IPO doesn’t test that valuation – it ratifies it and hands it to willing retail investors who are buying the dream. 

Don’t get me wrong, even I love the story. I listen to the Moonshots podcast every single week. I want data-centres in space. I’m a believer. But I’m also a skeptical value investor.

Where does SpaceX score on quality and value?

The StockRanks score every company 0–100 across three evidence-based characteristics – Quality, Value and Momentum.

We can’t compute the actuals till after the IPO, but here’s my estimate for SPCX from its prospectus.

Low Quality + low Value + high Momentum is, precisely, the Momentum Trap – this is the classic profile of ‘popular story stocks’ whose strong price action isn’t matched by improving fundamentals.

In Stockopedia’s research, this is what we call a ‘losing’ style.

Hyped tech IPOs usually give you a better entry 

History is not kind to the buyer of hyped tech IPOs like SpaceX.

Data shows that of 14 IPOs with sales above $100million that came to market at a price-to-sales above 40, 12 underperformed the market over the first three years if they were bought at the first close.

SpaceX is making its debut at 94x sales. Recent IPOs only reinforce the negatives. From the offer price, there have been twelve-month declines of roughly 65 per cent (Lyft), 55 per cent (Coinbase) and 67 per cent (Rivian) – and Robinhood a 78 per cent wipeout.

The cautionary tale that rhymes best may be Facebook. In May 2012 it IPOd at $38, fell more than 50 per cent to a low near $17 by September 2012, and didn’t get back to the float price till August 2013. 

But it then went on to be a generational compounder.

But there may be a melt-up… 

But Momentum Traps can be very profitable for a while, and betting against one is how careers end. As we’ve seen from the uni students, the structural demand here is unusual and global.

With 30 per cent retail investor allocation, around two-times oversubscribed, and fast-track index inclusion from Nasdaq, FTSE Russell and MSCI, there is a wall of largely price-insensitive buying coming. 

And last time I looked, 95 cents on every $1 saved in America goes into index funds.

This stock could very well melt up, especially if the free float is tight, before there’s a reckoning.

The verdict 

SpaceX may be a great company – and I’m a bull on the impact of AI on society and on computers in space. 

But the StockRanks aren’t a measure of how good a company is – they’re a measure of the odds you’re being offered right now.

And at $1.75trillion, with a Quality of ~30, a Value of ~2 and a Momentum of ~96, the odds say avoid for now. 

History says hyped tech IPOs usually hand you a better long-term entry within 12-18 months.

Especially as insiders will start selling as soon as the lockup expires, which is on second quarter earnings.

Nonetheless, there’s no doubt that breakout momentum traders are going to have fun with SpaceX. Strap in, set your stops tight. Good luck with the ride.