Morningstar analyst Nicolas Owens published a $780 billion fair-value estimate for SpaceX on June 2, roughly half the $1.75 trillion IPO target that Reuters has reported (and that SpaceX has not confirmed). The gap is not rounding error. It is the difference between a price set by insiders buying illiquid stakes and a price backed by a discounted cash flow model that assigns a 43% probability to SpaceX’s entire AI strategy producing negative value.
The $970 Billion Gap: What Morningstar Actually Modeled
SpaceX’s path to a reported $1.75 trillion IPO valuation has been paved by a small number of large, insider-led transactions. The xAI acquisition in early 2026, valued at $250 billion, pushed SpaceX’s paper mark near $1.5 trillion. Secondary trades on Forge Global most recently valued shares at approximately $1.53 trillion. Neither price reflects independent analysis of discounted cash flows. Both reflect what a handful of buyers and sellers agreed to pay for non-voting or restricted shares in a company with no public disclosure obligations.
Morningstar’s June 2 report, authored by Owens and Equity Director Suryansh Sharma, is the first major sell-side valuation of SpaceX published ahead of the June 12 Nasdaq listing. It arrives one week before the roadshow. The $780 billion figure is $970 billion below the reported IPO target, and roughly $750 billion below the Forge Global secondary mark.
Inside the DCF: $611 Billion for Launch + Starlink, $170 Billion for AI
Owens split the model into two components. The core business, comprising launch services and the Starlink satellite constellation, received an enterprise value of approximately $611 billion. That figure is grounded in real operating data: Starlink reported $11.3 billion in 2025 revenue (50% year-over-year growth) with operating income above $4.4 billion, according to Morningstar. SpaceX launched 83% of all mass sent to orbit from Earth in 2025. Morningstar assigned the company a narrow economic moat based on these two advantages: reusable rocket economics and constellation scale that competitors have not yet matched.
The second component is a $170 billion probability-weighted valuation for SpaceX’s AI operations, which include the xAI assets (Grok, Colossus) absorbed in the early-2026 merger. That $170 billion is not a single estimate. It is the weighted average of multiple scenarios, some of which Morningstar considers more likely than others.
Morningstar also flagged that the AI business drags the overall moat rating down. Owens told TechStartups: “We don’t see Grok as one of the leading AI labs today,” citing competition from OpenAI and Anthropic as limiting visibility on future AI returns.
Orbital Data Centers: The 43% “No Go” Scenario
The most striking number in the report is not the $780 billion headline. It is the probability distribution behind the AI component. Morningstar modeled three scenarios for SpaceX’s proposed orbital data center business. The “moonshot” case values the AI operations at $1.3 trillion but carries only a 7% probability assignment. The “no go” case, assigned a 43% probability, would destroy more than $81 billion in value, per Morningstar.
That probability weighting matters. More than four times out of ten, Morningstar’s base expectation is that the orbital data center plan fails outright. In fewer than one time out of ten, it produces the kind of outcome that would justify something close to the IPO target. The weighted average lands at $170 billion because the downside cases are heavy and the upside cases are thin.
For context, SpaceX’s 2025 total revenue was $18.7 billion with a net loss of $4.9 billion, per public records. Total assets stood at $92.1 billion. The company is not unprofitable because it lacks revenue. It is unprofitable because capital expenditure for Starship development, Starlink expansion, and the xAI merger consumes everything the launch and connectivity businesses generate.
Governance Red Flags: Dual-Class Shares and a Related-Party Merger
Morningstar’s report does not limit itself to financial modeling. Analysts flagged governance structures that would be unusual for a company of this size approaching public markets. Musk holds approximately 42% of equity and 79% of voting control as of the latest available data, according to Wikipedia. Morningstar expects post-IPO voting control to reach approximately 85% through dual-class share structures, per the report.
The xAI merger compounds the governance question. The $250 billion deal was not conducted at arm’s length. Musk founded and controlled both companies. The transaction transferred xAI’s assets (including Grok and the Colossus training cluster) into SpaceX at a valuation that Morningstar’s independent model does not appear to support as standalone value. When the buyer and the seller share a CEO, the price signals less about market consensus and more about internal portfolio construction.
Dual-class structures are common in founder-led tech IPOs. An 85% post-IPO voting lock is not common. Public-market shareholders in SpaceX would have no mechanism to influence board composition, executive compensation, or strategic direction.
Secondary Market vs. Independent Valuation: Forge Global’s $1.53 Trillion Mark
The Forge Global secondary price of approximately $1.53 trillion and the Morningstar DCF of $780 billion are not measuring the same thing, and the difference is instructive.
Secondary-market prices on platforms like Forge reflect what a small number of buyers will pay for restricted, illiquid shares when no public market exists. These buyers may be pricing optionality (the chance that a public listing drives the price higher in the short term), or they may be pricing strategic access, or they may be pricing FOMO. What they are not doing is building a discounted cash flow model from first principles and anchoring to it.
Morningstar’s DCF model is doing exactly that. The result is a valuation that treats SpaceX’s core launch and connectivity businesses as genuinely valuable (the $611 billion figure is not small) but discounts the AI component heavily because the probability of the AI strategy producing returns at that scale is, in Morningstar’s view, well below 50%.
Why It Matters Beyond SpaceX
SpaceX is not the only company carrying a private-market valuation set by insider-led rounds. Anthropic, OpenAI, Databricks, and others have raised at prices determined by a small number of participating investors, often with structured terms (ratchets, liquidation preferences, information rights) that do not translate directly into public-market equivalents. When these companies eventually list, the question will be the same one Morningstar just raised for SpaceX: what does an independent DCF model say?
As of June 2026, the Morningstar report is the only independent, publicly available third-party valuation of SpaceX that discloses its methodology and probability assumptions in detail. That alone makes it a reference point for every other pre-IPO name currently trading on private-market marks that no outsider has independently modeled.
For employees holding RSUs, the gap between the internal 409A valuation (which sets the strike price) and an independent estimate like Morningstar’s is not abstract. If the public market eventually prices SpaceX closer to $780 billion than $1.75 trillion, the value of those RSUs at vesting will reflect the lower figure, regardless of what the internal valuation said at grant.
Morningstar acknowledged that the low float, roughly 3% of shares offered to the public, could drive early trading above the DCF estimate. That is a statement about supply and demand mechanics in the first weeks of trading, not about long-term value. The underwriter lineup (Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup, and J.P. Morgan) is built for a successful pricing event. The question is what happens after the lock-up expires and the float increases.
The $970 billion gap between the Morningstar estimate and the reported IPO target is the widest public discrepancy between an independent analyst and a private-market mark in recent memory. Whether the market eventually lands closer to one or the other will set a precedent that every late-stage private company and its investors will study.
Frequently Asked Questions
How does Musk’s expected 85% post-IPO voting control compare to other founder-led tech companies?
Mark Zuckerberg holds roughly 58% voting control at Meta through dual-class shares. Evan Spiegel controls about 44% at Snap. An 85% post-IPO lock would give Musk tighter voting dominance than any founder of a comparably sized US public company. Public shareholders would have no mechanism to influence board composition, executive compensation, or strategic direction, including any future related-party transactions like the xAI merger.
What would need to shift for Morningstar’s AI valuation to support the $1.75T IPO target?
Morningstar’s moonshot scenario values the AI operations at $1.3 trillion but assigns only 7% probability. To reach a total company valuation near $1.75 trillion, the orbital data center failure probability would need to drop well below 43%, and Grok would need to close the capability gap with OpenAI and Anthropic. Owens stated directly that Grok is not among the leading AI labs, so the model would require a competitive breakthrough Morningstar currently considers unlikely.
What happens to employees holding RSUs if the public price settles near the $780B estimate?
RSUs are taxed as ordinary income at vesting based on fair market value on the vest date, not the 409A valuation at grant. If the public price lands near Morningstar’s estimate, employees owe less tax than the private-market mark implied, but their net holdings are worth roughly half what internal valuations projected. The sharper risk falls on employees who exercised options early or borrowed against RSU values set during the Forge Global $1.53 trillion pricing window.
How many shares could hit the market when the lock-up expires?
With about 3% of shares in public float at listing and Musk holding 42% of equity, roughly 55% of shares sit with employees, early investors, and venture funds behind a standard 180-day lock-up. If even a fraction of those holders sell, the volume would dwarf the initial float. The underwriter syndicate can exercise a greenshoe overallotment option to absorb some selling pressure, but only up to about 15% of the offering size.