The company that combines two of the hottest addressable opportunities, artificial intelligence (AI) and the space economy, is expected to raise up to $75 billion and slot in directly ahead of Musk’s other trillion-dollar company, Tesla, in market cap.<\/p>\n
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue \u00bb<\/a><\/p>\n Image source: Getty Images.<\/p>\n But narratives are rapidly shifting ahead of SpaceX’s IPO<\/a> and following the public release of its registration statement (S-1).<\/p>\n Report: SpaceX just slashed its valuation target by $200 billion<\/p>\n It was reported shortly after SpaceX confidentially filed its IPO with regulators on April 1<\/a> that Musk’s company might seek a valuation of up to $2 trillion. But according to people familiar with the SpaceX IPO, via Bloomberg News, the company is now seeking a valuation of “at least $1.8 trillion,” which is down $200 billion from its initial target.<\/p>\n It’s likely no coincidence that this reduction comes a little over one week after the company made its prospectus public. While SpaceX attempted to dazzle investors with a $28.5 trillion addressable market (TAM) led by AI, several aspects of the company’s operating performance left much to be desired<\/a>.<\/p>\n SpaceX in IPO filing: “We believe we have identified the largest actionable total addressable market in human history. We estimate that our quantifiable TAM is $28.5 trillion, consisting of $370 billion in Space from space-enabled solutions; $1.6 trillion in Connectivity across… https:\/\/t.co\/CBTpfJECik<\/a>pic.twitter.com\/yh54mKFlQE<\/a><\/p>\n — Sawyer Merritt (@SawyerMerritt) May 20, 2026<\/a><\/p>\n For example, combined sales at SpaceX were just $18.67 billion in 2025. At a $2 trillion market cap, SpaceX would command a price-to-sales (P\/S) ratio<\/a> of 107! To offer some historical context, companies at the forefront of game-changing technologies have consistently been unable to sustain P\/S ratios above 30.<\/p>\n Lowering the valuation target to $1.8 trillion still assigns an egregious P\/S ratio of 96 to SpaceX stock. Its prospective valuation would need to fall by an additional $1.25 trillion just to get below the historical P\/S ratio that indicates the presence of a bubble.<\/p>\n Perhaps even more worrisome than its valuation is SpaceX’s relatively mediocre growth from AI start-up xAI. The company behind large language model Grok and social media platform X grew sales by just 12.5% in the first quarter compared with the previous year. With Anthropic and OpenAI delivering eye-popping estimated sales growth, xAI has been stuck in the proverbial mud. xAI isn’t demonstrating that SpaceX’s $28.5 trillion TAM is attainable.<\/p>\n SpaceX adjusted EBITDA pic.twitter.com\/0YRgALXqFX<\/a><\/p>\n — Kevin Gee (@kevg1412) May 20, 2026<\/a><\/p>\n Additionally, prospective investors may be a bit gun-shy after digging into SpaceX’s bottom line. While the company has reported three consecutive years of positive adjusted EBITDA<\/a>, this doesn’t mask SpaceX’s sizable net loss in 2025 of more than $4.9 billion. The capital-intensive nature of the space industry, coupled with the costs of the AI data center build-out, is likely to keep Musk’s company in the red for years to come.<\/p>\n Although the new fast entry rule for the Nasdaq exchange may perk up institutional and retail investor demand<\/a> ahead of SpaceX’s expected June 12 IPO, the prospectus points to a valuation that’s wholly unsustainable.<\/p>\n Where to invest $1,000 right now<\/p>\n When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor\u2019s total average return is 978%* \u2014 a market-crushing outperformance compared to 211% for the S&P 500.<\/p>\n They just revealed what they believe are the 10 best stocks<\/a> for investors to buy right now, available when you joinStock Advisor.<\/p>\n See the stocks \u00bb<\/a><\/p>\n *Stock Advisor returns as of June 1, 2026. <\/p>\n Sean Williams<\/a> has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy<\/a>.<\/p>\n![\"A](\"https:\/\/barchart-news-media-prod.aws.barchart.com\/FC\/876eaa344624c0314587a4252de7d4f2\/%3Furl%3Dhttps%253a%252f%252fg.foolcdn.com%252feditorial%252fimages%252f872143%252frocket-coins-calculator-financial-metrics-to-moon-crypto-invest-getty.jpg%26amp%3Bw%3D700\"\/)
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