After more hype than just about any initial public offering (IPO) in history, media outlets expect SpaceX to price its IPO on June 11 and officially hit the public markets on June 12, barring any unexpected delay.
The IPO will mark the end of SpaceX’s private life and the beginning of scrutiny from investors worldwide. How investors receive the SpaceX IPO will be a huge deal for the artificial intelligence (AI) trade and, therefore, a potentially make-or-break day for the entire stock market.
SpaceX is asking the public markets for a lot
Now, investors may be wondering what truly sets the SpaceX IPO apart. Plenty of other AI companies have gone public with massive hype and outperformed investors’ wildest dreams right out of the gate.
But founder and CEO Elon Musk is asking for a lot.
Image source: Getty Images.
The first big request is on valuation. Media outlets have reported that SpaceX plans to raise $75 billion to $80 billion at a valuation of $1.75 trillion to $2 trillion. That would value the company between 94 and 107 times 2025 revenue.
While SpaceX appears to have some game-changing businesses and is a pioneer in the space economy, it grew revenue by only about 33% in 2025, suggesting it still has much to prove.
Companies like SpaceX aren’t going to trade on fundamentals, given their potential in what is essentially a new sector. But at this valuation, SpaceX would instantly become a top-10 company in the stock market and set the bar high, with not much room for error.
SpaceX is also testing the market by reportedly allocating as much as 30% of the raise to retail investors, three times the normal amount. Musk is quite popular among retail traders, and his involvement alone will draw significant interest from them.
Musk is also asking investors for unprecedented control. Through supervoting shares, Musk controls over 85% of the company’s voting power, making it next to impossible to remove him as CEO.
Some will view that as a positive, but poor board governance and controls have been the undoing of more than a few companies.
Why the SpaceX IPO has huge ramifications for the stock market
Earlier this year, many AI stocks sold off, as investors questioned whether AI valuations and all of the planned AI-related capital expenditures by the hyperscalers made sense.
Most AI stocks seem to have rebounded at this point, but the AI trade remains critical to the broader market. That’s because the “Magnificent Seven” and Broadcom now consume over 37% of the broader benchmark S&P 500 (^GSPC +0.43%).
Additionally, memory stocks like Micron and SK Hynix recently surpassed $1 trillion in market cap. Immense AI-related capital expenditures are also contributing to gross domestic product growth (GDP).
So, if the AI trade falters, the market will likely struggle unless there’s an immediate rotation into other sectors, which seems unlikely given that all companies are starting to think about and focus on how AI fits into their business.
That’s why SpaceX is another big test for the AI trade. Even though it’s a space company at heart, it now owns xAI, and many believe the overall goal is to achieve sovereign AI, in which the company controls the full AI stack from the infrastructure to the chips to the intelligence.
Chipmaker Cerebras recently had an extremely successful IPO, popping 68% on day one. While the stock has come down significantly since then, the company still trades at over 100 times its 2025 revenue.
But at a market cap of roughly $53 billion, Cerebras pales in comparison to the magnitude of SpaceX. Whatever happens when SpaceX goes public, the market will learn a lot.
The company is asking for an enormous premium and for investors to essentially hand over complete control to Musk in exchange for the chance to own a potentially game-changing space and AI company.
If the IPO goes well, raising in the ballpark of what the company was looking for and performing well on its first day of trading, that means the AI trade and hype are alive and well. If the opposite occurs, it could suggest the AI trade is hitting a wall.
