How much is SpaceX really worth?

The company’s deep commitment to Mars colonization and Elon Musk’s nearly total control make SpaceX stock an astonishingly speculative bet, our columnist says. (Giulio Bonasera/The New York Times) 

By JEFF SOMMER

Watching SpaceX stock trade in its infancy as a public company has been like viewing a successful rocket launch. The ascendance of the company’s shares has been pure spectacle.

The superlatives are still piling up: SpaceX had the largest initial public offering in history, making its founder, Elon Musk, the world’s first trillionaire. Its total market value stood at about $2.4 trillion on Thursday. At one point during the week, it trailed only Nvidia, Alphabet (Google) and Apple in market capitalization. Despite two rough days, it remains among the top 10 stocks. That’s an elite and impressive club.

But does SpaceX really belong there? Are its shares worth that much?

I have my doubts.

Musk is a visionary, with real achievements at both Tesla and SpaceX, and his unique abilities justify high share prices in the minds of his legions of fans. Nonetheless, the current price of SpaceX is difficult to justify by traditional measures. The company is losing money, but that’s the least of it.

Perhaps most troubling is that an investment in SpaceX is an extravagant bet on a sci-fi dream. The company’s prospectus says clearly that SpaceX is dedicated to the “establishment of a permanent human colony on Mars with at least one million inhabitants.”

This isn’t mere whimsy. Musk has said repeatedly, and in great detail, that he is wholly dedicated to “making humans an interplanetary species.”

This quest could siphon off any profits SpaceX will ever make. Even if the company is fabulously successful in every other respect, the Mars project could bankrupt it.

Would Musk blink before that happened? He is famous for persevering when others would falter — he has done so at Tesla — and he has set up SpaceX so he can’t be easily deposed. He controls more than 80% of its voting shares.

So if he wants to pour all of SpaceX’s future cash flow into the mission to Mars, he may be able to do so. That could lead to fantastic riches one day, but it’s not likely to do so soon. In the meantime, the financial drain could be devastating. From this perspective, SpaceX, as a company, could be worth absolutely nothing.

Soaring ambitions

As a publicly traded stock, SpaceX shares have plenty of financial virtues.

The company plays a dominant role in the U.S. space program. It is a military contractor, too. This side of its work is less well known and, potentially, highly lucrative. Its high-speed Starlink satellite internet system is a proven geopolitical force — helping Ukraine withstand Russia’s assault — as well as an expanding profit center.

The rapid cadence and large payloads of SpaceX launches, made with reusable rockets, give Starlink cost advantages, and enable it to regularly improve its network. If artificial intelligence is deployed widely in cars, robots and roaming devices, that might enlarge the market for constant, high-quality, mobile connectivity, which Starlink could provide.

Then there’s AI. The AI stock market frenzy has bolstered SpaceX shares. That’s the case even though the company’s chatbot, Grok, isn’t in the same league as those from OpenAI or Anthropic, which are expected to have their own $1 trillion IPOs this year. Google and Meta as well as Chinese companies such as DeepSeek are formidable competitors, too.

That said, SpaceX has used its richly valued shares to buy Cursor, a code-writing AI startup, which could give SpaceX more weight in the scramble for business. For now, AI is a positive factor in the stock’s valuation.

So is SpaceX’s manufacturing prowess. It is building big data centers in the United States, which already have excess capacity. Some of that computing power is being leased to two rivals, Google and Anthropic, which are paying more than $2 billion a month, combined. In addition, SpaceX is constructing a gigantic factory to churn out silicon chips for its own use, and for Tesla and other companies as well.

Another well-known part of the company barely features in most stock valuations. That’s X, the social media network formerly known as Twitter. It still makes headlines and retains heft in mass communications, but Musk’s use of it as a political vehicle has hurt its revenue.

The odds of success

Far more important, as a valuation issue, are Musk’s visions for extracting commercial value from audacious operations in space. The engineering challenges of some of Musk’s bigger space projects are so large as to veer toward impossibility.

He says he will place vast numbers of immense data centers into Earth orbit, where they will harvest virtually unlimited solar energy. But Douglas Natelson, a physics professor at Rice University, said in a blog post, “Data centers in space make no sense to me.”

The fundamental difficulty of “cooling large things in space,” as well as the radiation damage that would afflict the “high-end computational hardware” needed for data centers, made this idea a nonstarter, he said. A better approach would be to make earthbound data centers more energy efficient, he added.

Placing a monetary value on ventures like this isn’t straightforward. In a transparent assessment of SpaceX’s value as a public company, Nicolas Owens, a stock analyst for Morningstar, a financial services company, grouped the orbital data centers with other more speculative projects as “the optimistic moonshot scenario” for SpaceX.

Owens estimated that there was a 7% probability that the moonshot would be achieved. He assigned a 43% probability to a future without the data centers, and gave a 50% probability to a “minimum viable product” outcome, in which some “commercially viable” orbiting data centers function.

The Morningstar analysis chose to disregard “a long list of other projects and ambitions, including actual moonshots and interplanetary colonization.” Owens added, “These would most probably absorb massive investment, could come with dilution to stockholders and have a wide range of possible payoffs, positive or negative.”

This assessment strikes me as generous. Even so, Morningstar concluded that SpaceX shares were worth only about $63, about one-third of their price Thursday.

Another public, open-source evaluation of SpaceX came from Aswath Damodaran, a New York University finance professor who has valued tech stocks extensively. He was more optimistic than Morningstar, but concluded that SpaceX shares were worth just $98, a little more than half of their price Thursday.

Perhaps SpaceX shouldn’t be thought of as a conventional investment at all. It’s a hope and a dream.

The company excites and inspires many people. But if you buy a piece of it now, you are paying a lavish premium for Musk’s leadership. You are also accepting the risk that he means just what he says: Whatever it takes, he intends to put gigantic data centers in orbit and, eventually, to reach and populate Mars.

If he succeeds, Musk and SpaceX will forever be legends. But at SpaceX’s current share price, it’s surely worth asking whether that money may have better uses on planet Earth.