Elon Musk at SpaceX in Brownsville, Texas on May 27, 2025.
Marvin Joseph Washington Post | getty images
Friday’s highly anticipated SpaceX public debut could prove to be a defining moment for capital markets — and a “referendum” on Elon Musk’s leadership, according to market watchers.
Musk’s $1.75 trillion valuation target implies a price-to-earnings ratio of about 100 times, compared with about 20-25 times for the chip giant. NVIDIA And for about 10-times Apple.
Nasdaq Recent rule changes have been made to make it easier for SpaceX and other companies planning mega IPOs to list nasdaq 100While S&P Global has refused to make an exception to allow the group’s early entry S&P 500.
Which voting rights will Elon Musk retain?
But investors are also being asked to make exceptions both on the valuation and Musk’s insistence that he retain an estimated 80-85% of SpaceX voting rights – something that often poses a hurdle. Investors are considering stocks, even those of companies that – unlike SpaceX – have a history of consistent profits.
Matt Calkins, CEO of enterprise software company Appian, told CNBC’s “Squawk Box Europe” on Thursday that the IPO was “a referendum on Elon and how much confidence investors have in this individual entrepreneur.”
“I think they have a lot, because they’ve done a lot, and they’re betting on their ability to open new markets, but that’s highly speculative.
“I wouldn’t want to invest (and) I wouldn’t want to speculate in any way on this kind of IPO.”
“We’re in an early stage where there’s tremendous uncertainty, and a lot of investments are going to be based on personal belief. It’s too early to be financially wise about things like this.”
Ben Ritchie, head of developed markets equities at Aberdeen Investments, said in a Thursday note that the IPO will test investors’ “willingness to embrace a new model of public equity ownership: high valuations, limited governance rights and confidence in a founder-driven approach.”
He added, “That combination has worked before. But on this scale?”
Will SpaceX Stock Reach $330?
Still, many investors are bullish and see near- and long-term upside in SpaceX shares, even though their debut has been quite valuable.
Analysts at New Street Research said in a note Thursday that they expect the company’s stock to reach $165 within 12 months of the IPO, which would reflect a 22% upside and a $2.3 trillion valuation for the group’s proposed acquisition of code-editing firm Cursor.
The analysts said: “The space opportunity is large and diverse and will last for more than a decade.
“With this in mind, we propose an alternative top-down approach to estimate the enterprise value the space opportunity represents in 2040, and project it into real terms today.
“Based on our low-end market growth projections, our $2.3 trillion valuation assumes (SpaceX) wins 75% of this market.
“If … the full opportunity rises to our high-end estimate and SpaceX wins a 50% share, it would be a fair value of $330/share.”
But James Dow, a professor in the Faculty of Finance at London Business School, urged caution when considering SpaceX’s long-term space trajectory.
“The valuation of SpaceX depends on what it’s going to do in 20 years,” he told CNBC’s “Squawk Box Europe” on Thursday.
“But, in 20 years, Musk will be quite old and I don’t know what he’ll be doing.” “SpaceX’s valuation is essentially tied to that, so I think that’s probably one of the biggest risks,” Dow said.
