'Looks overpriced': Valuation expert Damodaran puts SpaceX worth well below $1.8 trillion

Valuation expert Aswath Damodaran has pegged SpaceX's equity value at roughly $1.3 trillion following a review of the company's IPO prospectus, a figure that remains well below its implied market valuation of about $1.8 trillion at the offering price.

In a detailed post on X, the New York University professor said the prospectus largely confirmed his earlier assessment of SpaceX as a high-growth but money-losing company whose valuation is driven more by its future narrative than its current financial statements.

"My updated valuation with those inputs leaves my value close to my pre-prospectus estimate, but the influx of $75 billion in offering proceeds pushes estimated value of equity to $1.3 trillion and per share value at about $100," Damodaran wrote. The company's IPO has reportedly been priced at $135 per share.

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The academic noted that the prospectus did not materially alter his overall valuation despite providing significantly more financial detail.

"If you are surprised that accessing the financial statements did not have a bigger impact on my valuation, it is because it is a young company, where the answers to the big questions are not in those financials," he said.

SpaceX reported revenue of $18.7 billion in 2025, up 33% from the previous year, with growth led by its Starlink connectivity business. Revenue from connectivity rose nearly 50% to $11.4 billion, while the space launch business generated just over $4 billion in revenue and AI-related operations contributed $3.2 billion.

However, the company remained deeply loss-making. The prospectus showed operating losses of $2.6 billion and net losses of nearly $5 billion in 2025, reflecting aggressive spending on expansion, infrastructure and research.

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According to Damodaran, the company's valuation story rests on three pillars: its space launch business, Starlink connectivity operations and artificial intelligence ambitions through xAI.

While he described the economics of the space and connectivity businesses as improving, he expressed concern about the AI segment.

"Digging into the details, the prospectus shows improving unit economics at the space launch and connectivity businesses, but worsening unit economics at AI, squeezed by competition and costs of delivering AI services," he wrote.

He was particularly critical of the total addressable market assumptions outlined in the prospectus, especially for artificial intelligence.

"The total addressable market (TAM) in the prospectus for the three businesses push into fantasy land for AI ($26 trillion) and the limits of plausible for space and connectivity," Damodaran said.

The professor also highlighted what he described as "mind-blowingly large" capital expenditure and research spending, much of it tied to the company's AI ambitions.

Following a review of the prospectus, Damodaran modestly increased his margin assumptions for the space business and raised capital expenditure expectations for Starlink. For AI, he doubled his long-term revenue forecasts but simultaneously reduced margin expectations and increased reinvestment requirements to reflect the highly competitive nature of the sector.

Despite those changes, his revised discounted cash flow model continued to indicate a valuation materially below the IPO pricing.

"As an investor, I like the company for its audacity and imagination, but worry that it will overreach in AI, and if it does, its governance structure leaves it with no guard rails," he said.

"At $1.8 trillion, it looks overpriced to me, but that is a personal judgment."

Damodaran drew a distinction between investing and trading, arguing that long-term investors should focus on fundamentals and execution, while traders are more dependent on market sentiment and momentum.

The latest assessment comes as investors debate whether SpaceX's dominant position in commercial space launches and satellite connectivity can justify one of the largest valuations ever assigned to a newly-listed company, particularly as it expands aggressively into artificial intelligence.