June 2026 saw the most ambitious IPO in history.

A company built around rockets, satellites, artificial intelligence, social media, defence, data, and maybe one day infrastructure beyond Earth itself, is asking public investors to believe in a future that is more imagined than proven.

But let’s come back to earth.

The IPO valuation was $1.75 trillion, and trades at $2.5 trillion as of June 17th. The company’s latest fiscal year revenue is approximately $18.7 billion. That means investors are being asked to accept a valuation of nearly 130 times sales.

Elon Musk, depending on who you ask, is either a visionary or an over-promiser. Let’s ask ourselves…

What if Elon is right?

Why the valuation makes investors uncomfortable

Start with the numbers.

At the IPO valuation of $1.75 trillion valuation and $18.7 billion of annual revenue, the company would trade at roughly 93 times sales. That is an extraordinary multiple for any business, especially one still absorbing large losses across its most ambitious segments.

Starlink, the Connectivity segment, is the economic engine. In 2025, it generated approximately $11.4 billion of revenue, $4.4 billion of operating income, and $7.2 billion of adjusted EBITDA.

The Space segment, which includes the launch business, generated approximately $4.1 billion of revenue. It also reported an operating loss of around $657 million. 

Then there is the AI segment, including xAI, Grok, and X. It generated approximately $3.2 billion of revenue, but reported an operating loss of roughly $6.4 billion.

So the headline number describes three very different businesses: one profitable and scaling, one essential but capital intensive, and one potentially enormous but deeply loss-making.

The full stack pitch

The strongest version of the bull case views the company as an end-to-end stack.

At the base is Starship, the physical infrastructure layer. This includes rockets, launch pads, payload capabilities, government missions, satellite deployment, and one day perhaps lunar and deep-space logistics.

Above the infrastructure sits Starlink, the connectivity layer. This is where launch capacity supports a global consumer business. Starlink delivers broadband in places where terrestrial networks are unreliable. SpaceX reportedly has 9,600 satellites in low-Earth orbit, 10.3 million Starlink subscribers, and coverage across 164 countries. A competitor cannot copy this network by writing better software. 

Then comes X, a live stream of global conversation and real-time public sentiment.

At the top of the stack sits xAI and Grok, the intelligence layer. In theory, this layer could become a research assistant, coding assistant, customer support tool, enterprise agent, defense application, and real-time reasoning interface for businesses and governments.

SpaceX launches the infrastructure → Starlink connects it → X creates distribution and data → xAI attempts to turn that data into intelligence.

To say these companies are a random assortment misses the bigger picture.

How big is the vision?

The total addressable market (TAM) as per the IPO prospectus is $28.5 trillion. This includes a whole bunch of markets.

Some are direct: satellite communications, launch services, aerospace, government space contracts, defense communications, artificial intelligence, social media, digital advertising, and data distribution.

Others are adjacent: cloud infrastructure, industrial connectivity, Earth observation, remote sensing, advanced manufacturing, aviation connectivity, maritime connectivity, and emergency response networks.

Then there are the more speculative pools: harnessing solar power at unprecedented scale, space-based data centres, lunar logistics and a colony of a million people on Mars. Ever organised an international trip with 5 of your friends? Imagine that, but a million people going to a different planet. Safe to say that some parts of the pitch are easier to picture than others.

Take space-based data centers.

Earth-based AI compute is limited by energy availability, cooling equipment, and land permits. Elon’s argument appears to be that space may eventually offer a different answer: 24/7 solar energy, open physical space, compute placed closer to satellite-generated data, and the free cooling from sub-zero temperatures.

Even if the TAM were closer to $10 trillion, then 1% would imply $100 billion in revenue. A 2% share would imply $200 billion. A 5% share would imply $500 billion.

This shows why some investors are able to stomach the current valuation.

Where things can go wrong

Starship has operational weakness. As of the S-1 filing, Starship had completed 11 test flights and had not yet delivered a single paying commercial payload. Every single element of the stack relies on Starship’s operations.

xAI has financial weakness. The AI segment generated approximately $3.2 billion of revenue in 2025, but lost around $6.4 billion from operations. If that loss rate continues or expands, AI sucks up all the profits generated by the rest of the business.

Starlink has unit economics weakness. It is the strongest current business, but its average revenue per subscriber reportedly declined from around $99 per month in 2023 to about $66 per month in Q1 2026. That is a decline of roughly 33%.

Let’s not forget that valuation, business relationships and vision rely on one single person; and the same person holds a voting power of ~85%. The board also granted him one billion Class B shares, contingent on establishing a Mars colony of one million inhabitants and hitting a specific market cap target.

Bottom line

This IPO is divisive because both viewpoints are strong.

The skeptics are concerned over the financials, and the fans are asking the market to use a little imagination. 

A thoughtful investor can believe the vision is possible and still question whether the current price leaves enough upside adjusted to the risk.