SpaceX Would Need to Out-Earn Berkshire Hathaway to Support a $1.5 Trillion IPO Valuation, a Highly Unlikely Scenario

Speculation is mounting that Elon Musk intends to take SpaceX public with an IPO this summer. Following the merger of the rocket company with xAI, another key part of his business empire, the combined entity is projected to secure $50 billion in capital. A raise of that magnitude would represent the largest single IPO fundraising effort in history and secure the second-highest total valuation ever, significantly surpassing Alibaba’s 2018 debut, which was valued at $167 million.

A comprehensive examination of SpaceX’s financial health will not be possible until the company files its prospectus for the offering. Nevertheless, some key data points are available. Musk has indicated that SpaceX had approximately $15 billion in revenue last year, and widespread reports suggest it recorded around $8 billion in EBITDA. A widely circulated and uncontested media report indicates a loss of $2.4 billion for the initial three quarters of 2025.

These figures do not account for interest and depreciation, with the latter covering SpaceX’s capital expenditures on facilities and equipment. Piecing together this limited financial picture of the newly merged companies suggests that the current SpaceX entity is likely reporting zero or even negative GAAP earnings.

The epic valuation may doom SpaceX stock by setting the bar too high

Consequently, SpaceX cannot be assessed based on its present profitability, but rather on its potential for massive growth in a highly pioneering industry with an uncertain future. However, two critical factors regarding SpaceX should cause significant investor concern about a $1.5 trillion valuation.

The first is that these are quintessential capital-intensive businesses. Musk has declared SpaceX’s goal to construct 10,000 fully reusable Starlink rockets, each standing over 400 feet tall. With Payload Research estimating a cost of $35 million per rocket, the total expenditure for components like krypton-gas burners, solar arrays, and stainless steel alloy would reach $350 billion. Similarly, xAI is a major developer of expensive data centers that power products like its GROK chatbot. In 2025, it was reported to have consumed $8 billion in cash, largely to finance massive projects like a $20 billion “MACROHARDRR” facility in Mississippi. The conclusion is that these are not low-investment software ventures capable of easily achieving 35% net GAAP margins upon success. Generally, it is exceedingly rare for “manufacturers,” whether in aircraft or data infrastructure, to reach such high levels of profitability.

The second known factor is the level of earnings SpaceX must generate to provide returns for shareholders in the future. It is important to remember that the company is starting from a standstill, given its apparent absence of current earnings. The question is where SpaceX needs to be in five years, which constitutes an extremely risky bet. Based on the returns investors typically demand from similarly high-risk ventures, it is reasonable to estimate that shareholders will expect total annual returns of at least 10% to retain the stock. Therefore, by 2031, its market capitalization would need to expand to at least $2.4 trillion to meet that goal. This would make it larger than all but four of the world’s current largest companies, far exceeding the size of entities like Saudi Aramco and sitting $1.2 trillion above Musk’s flagship Tesla.

If we assume it would then warrant a price-to-earnings multiple of 30, which is the median for the Mag 7 stocks, the required GAAP net earnings at a $2.4 trillion market cap would be a towering $80 billion per year. That figure is 33% higher than Meta’s earnings, 21% above another major tech firm, and roughly two-thirds of the earnings reported by Alphabet and Apple.

“Whether SpaceX can get there is really a moonshot,” remarks Jack Ciesielski, a leading U.S. accounting expert. “It’s anybody’s guess how big the space industry will become in the future.” It is possible for SpaceX to succeed, but it would require two conditions: an exceptionally rapidly expanding market and significant monopoly power. The company already competes with several smaller rivals, including Jeff Bezos’s Blue Origin. SpaceX’s most viable path is to establish an insurmountable lead, achieving economies of scale in rocket manufacturing that are unmatched by any competitor.

The likelihood of this outcome is highly uncertain, while the substantial price investors would pay to bet on the company’s success is already predetermined. Reports indicate that SpaceX is timing its stock market debut to align with a rare celestial event where Jupiter and Venus converge in the sky. The most probable scenario is that SpaceX will be recognized as a scientific marvel but prove to be an ill-fated stock investment.