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, was the first major sell-side valuation of SpaceX published ahead of the June 12 Nasdaq listing. It landed 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.
What the Market Decided: The June 12 Listing [Updated June 2026]
The test arrived faster than any DCF could be revised. SpaceX priced its IPO at $135 per share on June 11, offering roughly 556 million Class A shares and raising more than $75 billion, the largest stock-market debut on record. That price valued the company at about $1.77 trillion, almost exactly the reported target and more than double the Morningstar mark. The stock opened near $150 on June 12 under the ticker SPCX, climbed through the session, and closed its first day at $161, up about 19%, for a roughly $2.1 trillion market capitalization.
Then it kept going. Retail demand, fed by an unusually large 30% retail allocation in the offering, drove a buying frenzy: SPCX was the most-bought name among retail investors for consecutive sessions, with net buying near $100 million a day. The stock hit an intraday high around $225 on June 16, briefly pushing the implied valuation toward $2.9 trillion. It then gave most of that back, touching $147 on June 23 before settling near $153 by June 25, a market capitalization in the $2 trillion range.
Morningstar did not blink. Its fair-value estimate of $780 billion translates to roughly $63 per share, and the firm held that mark after the debut, reframing it as a wait-for-the-pullback call rather than a price prediction. At $153, the stock trades at about 2.4 times what Owens’s model says the business is worth. The market, for now, has sided overwhelmingly with the secondary marks over the independent DCF. Whether that holds is the open question the lock-up schedule will start to answer.
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 split inside that $611 billion matters more than the headline. Starlink is the part of SpaceX that looks like a real cash-generating business: $11.3 billion in 2025 revenue against more than $4.4 billion in operating income is a margin profile closer to a maturing telecom than a launch provider, and it is growing at 50% a year. Launch is strategically dominant but financially smaller. A 2.5-ton-to-orbit cost advantage does not by itself produce telecom-scale recurring revenue. In a DCF, the discounted future cash flows that justify most of the $611 billion come from the constellation, not the rockets, which is why Morningstar’s narrow moat rating leans on Starlink’s subscriber base and orbital slots rather than reusable boosters. The rockets are the cost advantage that makes the constellation cheap to deploy. The constellation is what the model actually capitalizes.
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%.
The deeper issue is that the two numbers answer different questions. A DCF asks what the future cash flows are worth today, discounted for risk and time. A market price asks what the marginal buyer will pay right now, which folds in scarcity, momentum, index-inclusion demand, and the belief that someone else will pay more next week. The first is an estimate of intrinsic value; the second is a clearing price, and clearing prices for a newly floated mega-cap with about 5% of shares available are dominated by supply mechanics. The June 16 spike to $225 was not a revision of anyone’s cash-flow forecast. It was a thin float meeting a 30% retail allocation and forced index buying. That gap is also reflexive: a high listing price lets SpaceX raise more capital, which funds the Starship and orbital-data-center spending that the bullish scenarios assume, so the market mark can partially finance the future it is pricing in. A DCF, by design, refuses to credit that loop until the cash flows actually appear.
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. Anthropic’s roughly $965 billion private mark and OpenAI’s nine-figure-per-share rounds sit on exactly the same footing SpaceX did on June 1: a number no outside analyst has independently modeled. When these companies eventually list, the question will be the same one Morningstar just raised for SpaceX: what does an independent DCF model say?
The SpaceX result complicates the easy reading of that question. If the lesson is that independent DCFs are right and private marks are inflated, the first two weeks of SPCX trading argue the opposite, with the market clearing at more than double Owens’s estimate. The more careful lesson is that a public listing does not resolve the disagreement so much as relocate it, from a handful of secondary buyers to a thin early float driven by the same momentum. The real repricing comes later, when lock-ups release supply and the second quarterly report forces SpaceX to disclose numbers no private company has to. That same dynamic is what makes an S-1 a repricing event for the whole private-AI cohort: the first audited disclosure resets every comparable mark, up or down.
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, about 5% of shares offered to the public [Updated June 2026], could drive early trading above the DCF estimate. The first two weeks proved the point in the firm’s favor on the mechanics if not the level. That is a statement about supply and demand in the opening sessions, not about long-term value. The underwriter lineup (Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup, and J.P. Morgan) was built for a successful pricing event, and it delivered one. The question is what happens as the tiered lock-up releases supply and the float grows.
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? [Updated June 2026]
With about 5% of shares in public float at listing and Musk holding 42% of equity, the large majority of stock sits with employees, early investors, and venture funds behind lock-ups. The structure is not a single 180-day cliff. Musk and other insiders face a 366-day restriction, while other pre-IPO investors hold a 180-day lock-up with earlier partial releases tied to benchmarks: roughly 20% becomes sellable after the first quarterly report covering Q2, with a further tranche freeing up if the stock holds at least 30% above the IPO price for several sessions, and employee equity becoming sellable in increments through the months after listing. The staggered design means selling pressure arrives in waves rather than at one date. The underwriter syndicate exercised a greenshoe overallotment of about 83 million shares, roughly 15% of the offering, to absorb early demand.
