{"id":595247,"date":"2026-04-10T17:51:09","date_gmt":"2026-04-10T17:51:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/595247\/"},"modified":"2026-04-10T17:51:09","modified_gmt":"2026-04-10T17:51:09","slug":"the-unconventional-logic-behind-spacexs-1-75-trillion-price-tag","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/595247\/","title":{"rendered":"The unconventional logic behind SpaceX\u2019s $1.75-trillion price tag"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

SpaceX’s rocket, as the company prepares to file for an initial public offering (IPO), in Starbase, Texas, U.S., March 31, 2026.Gabriel V. Cardenas\/Reuters<\/p>\n

Wall Street is reaching for \u200bsome unusual yardsticks to price Elon Musk\u2019s SpaceX.<\/p>\n

At least one of SpaceX\u2019s large institutional investors is privately benchmarking the rocket and satellite company not against aerospace rivals like Boeing (BA-N<\/a>) or \u200btelecom giants like AT&T (T-N<\/a>), but against market darling Palantir Technologies (PLTR-Q<\/a>) and AI infrastructure plays like GE Vernova (GEV-N<\/a>) and \u200cVertiv (VRT-N<\/a>) – in a bid to justify a US$1.75-trillion valuation ahead of what could be the largest IPO in history.<\/p>\n

The framework, described to Reuters for the first time by a source familiar with the company\u2019s thinking, illustrates the unusual challenge of pricing a company with no obvious public peers – and the lengths to which Wall Street is going to rationalize a premium valuation.<\/p>\n

SpaceX has confidentially filed for a U.S. IPO, Reuters reported last week. The company is scheduled to hold an analyst \u2060day on April 21, \u200bReuters previously reported.<\/p>\n

At a potential valuation of US$1.75-trillion, SpaceX looks expensive by many traditional measures, including comparisons to the earnings and revenue multiples at firms often cited as reference points for parts of its business. In space that means Boeing and Lockheed Martin, whose United Launch Alliance joint venture competes with SpaceX in launch services. In internet access, the peers would be AT&T and Verizon.<\/p>\n

But financial backers of the firm, on track to raise US$75-billion in an IPO this year, contend that comparisons to established firms in legacy businesses miss the point of SpaceX and other Musk companies – to take advantage of the emergence of long-term, \u201csecular\u201d economic \u200bshifts at a time when few competitors are equipped to do so.<\/p>\n

Musk\u2019s companies have historically commanded rich multiples in part because investors are \u200cbetting on him personally – Tesla being the clearest example \u2014 and SpaceX investors expect that dynamic to carry over into any public offering.<\/p>\n

It\u2019s \u201cpretty darn exciting\u201d to sell into \u201cthe largest total addressable market in human history\u201d – a potential $370 billion in space business, SpaceX CFO Bret Johnsen told IPO bankers on a conference call this week, according to two people familiar with the matter. He tabbed the potential market for the firm\u2019s Starlink internet service at US$1.6-trillion, the people said.<\/p>\n

SpaceX did not respond to a request for comment.<\/p>\n

Finding the right comparables for SpaceX lies at the centre of a fierce debate over the pricing of the massive IPO, as bankers and investors grapple with how to value the company despite few, if any, closely comparable public peers.<\/p>\n

It \u200cis common for investors and \u200bbankers to sort for comparables by sector, using the longstanding assumption \u200cthat industry is a good proxy for financial opportunity and risk. But many investors contend that comparable companies do not need to operate in the same industry – because, in this view, what matters are a firm\u2019s potential \u200bcash flows, growth profiles and risk characteristics. This approach holds that a better comparison for SpaceX comes from companies selling \u2060into the AI data-center buildout, which have famously been rewarded with rising shares and high multiples.<\/p>\n

For smaller funds, the calculus is different, said Jay Bala, portfolio manager at Toronto-based AIP, which \u2060manages roughly US$100-million in assets, a large portion concentrated in SpaceX. \u201cI\u2019m piggybacking on the largest funds in the world. A huge amount of due diligence has already been done. I\u2019m not going to second-guess some of the biggest investors on the planet,\u201d he said. He acknowledged it \u200bis difficult to obtain detailed financial information about SpaceX: \u201cYou can only get so much. It\u2019s hard to get numbers sometimes.\u201d<\/p>\n

For Starlink \u2014 or what SpaceX calls its \u201cconnectivity\u201d business \u2014 the reflexive benchmarks are legacy telecom firms, but some investors argue those comparisons are skewed by aging fixed infrastructure, saturated domestic markets and years of modest growth.<\/p>\n

\u201cI wouldn\u2019t look at a legacy AT&T and Verizon as being very relevant to the economic model for Starlink, even though they\u2019re both in the business of giving you communication,\u201d a senior executive at one of SpaceX\u2019s large institutional investors told Reuters, speaking on condition of anonymity to discuss confidential internal work.<\/p>\n

Instead, SpaceX investors point to Palantir for its secular growth, high return on invested capital, good margins and asset-light \u2060composition \u2014 qualities that fans say justify the high multiples the stock commands and suggest greater opportunities down the road.<\/p>\n

Palantir is well known as one of the priciest stocks in the market, recently trading at 43 times expected revenue and 75 times earnings. Skeptics say those levels are likely unsustainable, but SpaceX fans contend that the figures show that premium valuations are attainable if backed by outstanding financial performance.<\/p>\n

That said, at US$1.75-trillion, even Palantir would be cheaper on some of these measures than SpaceX, which would trade at 110 times 2025 revenue estimates, according to a PitchBook calculation.<\/p>\n

\u201cInvestors should size positions with the understanding that they are paying a platform premium today for infrastructure-monopoly economics tomorrow,\u201d PitchBook analyst Franco Granda said in a note last month.<\/p>\n

For the rocket manufacturing side of the business, SpaceX investors contend that the firm\u2019s accomplishments \u2013 for instance, it has built a reusable launch \u2060system, driven down unit costs dramatically and expanded into a commercial market where demand for launch capacity continues to grow \u2014 demand valuations \u200bfar above those prevailing at Lockheed, which traded recently at around 20 times next year\u2019s expected earnings. Boeing\u2019s current high multiples mostly reflect its state as a turnaround story.<\/p>\n

Instead, they turn to industrial names such as GE Vernova and \u2060Vertiv – companies whose stocks have soared on the back of AI data-center spending – arguing that SpaceX\u2019s launch operations deserve a similar re-rating to the \u201cpicks and shovels\u201d of the data-center age.<\/p>\n

Even these preferred comps do not look a lot like SpaceX, however. GE Vernova was recently trading at around 30 times \u200cexpected cash flow and four times last year\u2019s revenue.<\/p>\n

Vertiv, which sells power and cooling equipment for data centers, traded recently at 19 times expected operating profit and 6 times last year\u2019s sales.<\/p>\n

Bankers and investors say SpaceX \u200bis difficult to price because of the company\u2019s unique space operations and AI business, which is particularly difficult to value at an early stage.<\/p>\n

\u201cPricing is always going to be messy here,\u201d said Aswath Damodaran, a valuation expert and finance professor at New York University\u2019s Stern School of Business. \u201cNobody else has that capacity to launch satellites in numbers and at the price that they can do — that\u2019s their big advantage.\u201d<\/p>\n

He adds that much of the current pricing reflects investors justifying their decision to purchase the shares rather than relying on traditional metrics. \u201cThey\u2019re hoping there\u2019s enough mood and momentum behind SpaceX, and when it \u200bgoes public, the mood and momentum will take the stock up.\u201d<\/p>\n

\u201cThey\u2019ve made the decision already that SpaceX is a great buy,\u201d Damodaran said. \u201cNow they\u2019re looking for some way that they can justify that, and this pricing sounds like that exposed rationalization.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: SpaceX’s rocket, as the company prepares to file for an initial public offering…\n","protected":false},"author":2,"featured_media":595248,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[901,888,902,879,877,903,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,66,306,865,61,900,892,886,883,913],"class_list":{"0":"post-595247","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-space","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-ca","15":"tag-canada","16":"tag-canada-news","17":"tag-canada-sports","18":"tag-canada-sports-news","19":"tag-canada-trafficcanada-weather","20":"tag-canadian-breaking-news","21":"tag-canadian-news","22":"tag-economy","23":"tag-education","24":"tag-environment","25":"tag-federal-government","26":"tag-foreign-news","27":"tag-globe-and-mail","28":"tag-globe-and-mail-breaking-news","29":"tag-globe-and-mail-canada-news","30":"tag-government","31":"tag-life-news","32":"tag-lifestyle","33":"tag-local-news","34":"tag-manitoba","35":"tag-national-news","36":"tag-new-brunswick","37":"tag-newfoundland-and-labrador","38":"tag-northwest-territories","39":"tag-nova-scotia","40":"tag-nunavut","41":"tag-ontario","42":"tag-pei","43":"tag-photos","44":"tag-political-news","45":"tag-political-opinion","46":"tag-politics","47":"tag-politics-news","48":"tag-quebec","49":"tag-science","50":"tag-space","51":"tag-sports-news","52":"tag-technology","53":"tag-travel","54":"tag-trudeau","55":"tag-us-news","56":"tag-world-news","57":"tag-yukon"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/595247","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=595247"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/595247\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/595248"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=595247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=595247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=595247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}