Morningstar wasn't shy about its skepticism on SpaceX before Thursday's debut, saying it should be valued around 50% below its IPO valuation.
The firm gave SpaceX a 7% chance of capturing a "moonshot" 21% share of the global compute market through its plan to launch AI data centers into space. The most likely scenario, the firm said, is that it captures around 4% of global market share.
Morningstar wasn't shy about its skepticism on SpaceX before Thursday's debut, saying it should be valued around 50% below its IPO valuation.
The firm gave SpaceX a 7% chance of capturing a "moonshot" 21% share of the global compute market through its plan to launch AI data centers into space. The most likely scenario, the firm said, is that it captures around 4% of global market share.
"Even giving SpaceX the benefit of the doubt in several key forecasts, only the most optimistic 'moonshot' scenario approaches the IPO offering price," the firm wrote earlier this week.
Morningstar's Nicolas Owens and Suryansh Sharma say long-term investors would be better off waiting to buy the stock.
"In the months following the IPO, when successive tranches of stock held by private investors and employees are slated for sale into the public market, selling pressure may weigh on the shares," the analysts wrote.
In the weeks before the IPO, we asked investing pros whether they'd buy the SpaceX IPO on day one.
A couple of them, including Altug Dincturk, the chief investment officer at Madison Partners, gave data-driven answers as to why they'd stay away. Historically, stocks have suffered in the months following their IPOs.
While University of Florida data from 1980-2024 shows an average gain of 19% on the first day of trading after an IPO, Nasdaq data from 2010-2020 shows that 64% of stocks underperform the market by at least 10% over the three years following their IPO. Around half post negative absolute returns in their first 12 months.
"High-profile names are often the worst offenders. Look at 2025 alone: StubHub debuted 8% above its IPO price on day one and has since fallen 40%," Dincturk told Business Insider. "CoreWeave opened below its offer price but is up 78% for patient investors who weren't scared off by the first-day dip. The lesson isn't 'don't buy SpaceX.' The lesson is: the opening bell is the worst time to decide."
Dincturk said his firm will wait for the dust to settle after the IPO to decide whether to buy.
After Elon Musk, Antonio Gracias, one of Musk's closest confidants and an early SpaceX investor, could be the second biggest winner in the IPO.
Gracias owns more than 500 million shares of SpaceX stock through investment firms affiliated with Valor Equity Partners, the private equity firm he founded, which represent roughly 7.3% of SpaceX's Class A stock. That stake could be worth north of $90 billion.
That gain is one of the largest fortunes ever created by a venture investor, though it is unclear how much Gracias personally invested.
After the S-1 was released, Gracias posted on X: "While I'm a large partner in the funds, the majority of the gains go to our LPs. We're deeply grateful for their belief in us and SpaceX beginning with our first investment in 2006."
Real estate agents and developers in Southern California have been eagerly anticipating this day, bracing for a potential influx of newly wealthy buyers.
Even after SpaceX shifted its headquarters to Texas in 2024, its Hawthorne manufacturing hub remained a major local employer, with 7,661 workers last year, according to city records.
"This is LA's Google moment," Chris Tourtellotte, managing director at LaTerra Development, a Los Angeles real estate investment management and development company, told Business Insider, referring to Google's 2004 IPO that is estimated to have minted over 900 millionaires. "All of a sudden, you will wake up, and there will be thousands of brand-new millionaires."
Agents say Manhattan Beach will likely benefit the most, and prices will spike after lock-up periods end in the fall.
Austin, Texas, is also hoping for a boost from Space's IPO, with 1,590 employees working in nearby Bastrop County.
Data shows that retail traders were net sellers of stocks three days in a row this week, the first time since 2020 that's been observed by Vanda Research, which tracks retail flows in ETFs and single stocks.
According to the firm, they've been offloading chip stocks and other AI favorites, possibly to build a stash of "dry powder" to throw at new stocks that hit the market this year.
Data shows that retail traders were net sellers of stocks three days in a row this week, the first time since 2020 that's been observed by Vanda Research, which tracks retail flows in ETFs and single stocks.
According to the firm, they've been offloading chip stocks and other AI favorites, possibly to build a stash of "dry powder" to throw at new stocks that hit the market this year.
"We're already seeing signs that retail investors are rotating out of recent AI favorites ahead of the IPO wave," Vanda said on Thursday.
SpaceX is the first of the 2026 mega-IPOs to exit the pipeline, with trillions of dollars of additional market cap set to be added from AI titans Anthropic and OpenAI later this year.
Importantly, the debut of Musk's rocket company will set the tone for others to come.
"I expect that the SpaceX IPO will be the high tide that lifts all boats, resulting in flood of new IPOs, and all-time highs in the market," Ross Carmel, a partner at capital markets law firm Sichenzia Ross Ference Carmel, told Business Insider this this week.
On the flip side, an IPO flop could thwart investor enthusiasm and make less high-profile companies hesitant to jump into the market in a year with a handful of major whales dominating the conversation.
Some have flagged a possible merger between SpaceX and Tesla given both companies are run by Musk and have similarly high-tech ambitions.
The two companies are already intertwined and it wouldn't be the first time Musk merged entities under his control, with SpaceX acquiring xAI earlier this year.
Wedbush Securities' Dan Ives, who is among Tesla's loudest bulls on Wall Street, said he expected a SpaceX merger in 2027.
The pair's combined valuation would sit around $3 trillion.
Ed Elson, host of the Prof G Markets podcast, recently shared why he's not rushing to buy SpaceX when it debuts. In a Substack post, he highlighted concerns about a supply shock that could negatively impact the broader market as SpaceX, Anthropic and OpenAI bring massive offerings in relatively quick succession.
Regarding SpaceX specifically, Elson's big issue is with the valuation.
"Compared to previous go-publics, SpaceX's valuation falls nothing short of insane, " Elson wrote. "Meta went public at 28 times sales with 88% revenue growth. Google went public at 10 times sales with 234% growth. Put another way, SpaceX is growing seven times slower while asking for a multiple ten times higher."
SpaceX's S-1 filing showed that the company posted a $4.9 billion loss and a revenue of $18.7 billion in 2025, raising the question: What exactly are SpaceX investors buying?
The company's rocket launch business is the "foundation" and the Starlink satellite internet business is the "financial engine," Cathie Wood's ARK Invest, which holds a stake in SpaceX, said.
The more out-of-this-world ambitions, according to the company's S-1 filing, include things like data centers in space, Mars colonies, asteroid mining, and opportunities in frontier tech like AI.
The sense on Wall Street is that SpaceX stock is a bet on the future, similar to how much of the bull thesis propping up Tesla's valuation is rooted in visions of robots and cybercabs.
We knew the retail hype was big, but demand for SpaceX stock from everyday traders is shaping up to be astronomical.
Bloomberg reports that $100 billion of orders have been submitted by individual investors, but with just 30% of the planned $75 billion capital raise earmarked for retail, there's likely to be a lot of disappointed traders out there.
The rush to open the IPO to more traders kicked off in the weeks leading up to the deal. Fidelity lowered its account minimum to particpate in the IPO to $2,000, and SpaceX itself courted day traders in its marketing materials.
For those who can't get in on the action at the IPO price, the stock will begin trading on Nasdaq on Friday under the ticker SPCX.
