NYU finance professor Aswath Damodaran pegged SpaceX at $1.3 trillion after reviewing its IPO prospectus, roughly $500 billion below the $1.8 trillion valuation the company is seeking from public markets.
The $500 billion gap between independent analysis and management’s target price sets up a critical test for retail and institutional investors deciding whether to participate in what could be one of the largest IPOs in history.
Key Takeaways
- Damodaran values SpaceX at $1.3 trillion, or ~$100 per share.
- SpaceX’s AI segment faces margin compression from intense competition.
- Damodaran would not short the stock despite the stretched valuation.
Valuation Gap in Context
At $1.8 trillion, SpaceX would be priced at roughly 100 times last year’s adjusted operating earnings – a multiple that dwarfs even high-growth technology peers currently trading on public markets. 1 Damodaran’s $1.3 trillion figure, while still historically elevated for a company generating under $7 billion in adjusted EBITDA, at least reflects a more conservative set of assumptions on total addressable market and margin trajectory.
For reference, the gap between Damodaran’s estimate and SpaceX’s target is larger than the entire market capitalisation of most S&P 500 companies. The divergence mirrors debates that surrounded the Facebook (now Meta) and Uber Technologies IPOs, both of which traded significantly below their offering prices within months of listing before eventually recovering.
Segment-by-Segment Breakdown
Damodaran identifies three distinct businesses inside SpaceX: launch and space infrastructure, Starlink satellite connectivity, and an artificial-intelligence services division. The space segment carries the strongest unit economics, with a current gross margin of 67%, and Damodaran raised his long-run margin estimate for that segment to 45% from a prior 40%. 1
Starlink’s connectivity business, he said, benefits most from scale once the satellite constellation is deployed, and he projects long-run margins of 60% for that division. The AI segment, however, is a materially different story: current gross margins are already falling amid intense competition, and Damodaran slashed his forward margin estimate for AI to 25% from a prior 45%. 1
TAM Skepticism
One of the sharpest critiques in Damodaran’s analysis targets the total addressable market figures disclosed in SpaceX’s prospectus. The company identified a $26 trillion TAM for its AI business; Damodaran put the realistic figure at $3 trillion to $4 trillion, a reduction of more than 85%. 1
He said he applied the same skepticism to TAM projections in past high-profile listings, including Uber Technologies and Airbnb, calling large TAM calculations a standard feature of IPO marketing rather than rigorous financial analysis.
The Bull, Bear and Short Case
Damodaran said he is staying on the sidelines at the $1.8 trillion offering price but would reconsider if the stock declines meaningfully post-listing.
“It is worth remembering that Facebook was selling at half its offering price a few months after its IPO, and that Uber lost more than 50% of its market cap in the year after its public offering, moving both companies from over to under valued,” he said.
Despite the stretched valuation, Damodaran explicitly ruled out a short position, citing the unpredictable role of momentum and investor sentiment – dynamics he said are especially powerful around Elon Musk-led companies. 1 He drew a direct parallel to Tesla, where narrative has historically driven price far beyond what traditional discounted cash-flow models would support.
Conclusion
For macro and sector-focused investors, the SpaceX IPO presents a textbook tension between narrative-driven pricing and fundamentals-based valuation. The prospectus data confirmed Damodaran’s pre-IPO story in broad strokes but introduced greater volatility in the AI segment outlook, while strengthening the case for Starlink’s long-run economics.
At the $1.8 trillion target, investors are paying a premium that even a sympathetic valuation model struggles to justify on current financials – though history suggests that, for Musk-affiliated ventures, narrative momentum can sustain elevated multiples longer than sceptics expect.
Not investment advice. For informational purposes only.
References
1Goldstein, Steve (June 5, 2026). “What SpaceX is really worth, according to the professor called the dean of valuation”. MarketWatch. Retrieved June 5, 2026.
2Damodaran, Aswath (June 2026). “SpaceX Valuation: A Post-Prospectus Assessment”. Musings on Markets. Retrieved June 5, 2026.
3(June 5, 2026). “What SpaceX is really worth, according to the professor called the dean of valuation”. MarketWatch via Facebook. Retrieved June 5, 2026.
4MarketWatch (June 5, 2026). “What SpaceX is really worth, according to the professor called the dean of valuation”. X (formerly Twitter). Retrieved June 5, 2026.
5MarketWatch (June 5, 2026). “‘Dean of valuation’ says this is what SpaceX stock is really worth”. X (formerly Twitter). Retrieved June 5, 2026.
6Inko-Tariah, Omiete (May 19, 2026). “Space X is preparing for the biggest IPO in human history”. Facebook. Retrieved June 5, 2026.