SpaceX IPO – Morningstar values SpaceX at $63 a share—far below the upcoming IPO offering price of $135—arguing that the upside depends on two major engineering breakthroughs that, in its view, won’t be solved until at least 2028.
The IPO price being set at $135 per share is the moment investors usually lean in. For Morningstar, it’s the moment the math starts to bite.
Morningstar’s valuation lands at $63 per share. framing it as a probability-weighted estimate built from three scenarios—rather than a straightforward rejection of SpaceX’s future. The firm says its $63 target reflects a wide range of financial outcomes. especially around two assumptions: that Starship can become rapidly reusable enough to fly multiple times per week. and that SpaceX can commercialize data centers in orbit.
Even when Morningstar gives the company substantial credit in two of those scenarios. it still lands far below the offering price because the engineering work—both the reusable Starship rocket and the orbital data center business—is. in its view. not solved and not expected to be solved until at least 2028.
In the most optimistic “moonshot” scenario. Morningstar assigns a valuation that would be hard to ignore: $1.97 trillion in total value. or $154 a share. That would be 14% above the offering price. and the firm says shares could even reach something like that level in the short term after the public launch. buoyed by broad investor enthusiasm around SpaceX. artificial intelligence infrastructure. and the IPO.
But the firm also assigns that moonshot path only a 7% chance of happening. That single probability choice is what keeps its final fair value estimate from moving anywhere near $154.
Morningstar’s “Buy” threshold also makes the gap clearer. With its “Very High Uncertainty Rating. ” it says it would only think the shares offered a compelling risk-adjusted return if they were priced with at least a 50% discount to its fair value estimate (it describes that as the condition for a 5-star outcome below a 50% discount).
Using its own numbers, Morningstar says that to earn a “Buy” view from $135 offering price, its fair value estimate would have to rise to $270 per share—while holding other factors equal.
To understand how it arrives at $63, Morningstar breaks the valuation into components.
First, it says the firm assumes SpaceX will raise $85.7 billion for 639 billion shares offered in the IPO, which amounts to $6.50 per share of its fair value estimate. It then adds SpaceX’s existing $1.80 of cash and investments and subtracts $2.30 per share of debt.
From there, Morningstar estimates the core space and connectivity businesses add around $40 per share, and it says a slower-growth Starlink scenario after 2028 would reduce that estimate by $5.
Finally, the probability-weighted average of three wide-ranging AI scenarios adds $16.50 to the overall valuation. Morningstar describes that slice as more like the value of a call option on the commercialization of orbital AI infrastructure.
In the firm’s own math, the components add up to $62.51, which it rounds up to $63.00: $6.51 + $1.80 − $2.30 + $40.00 + $16.50.
The foundation across all three scenarios is SpaceX’s ability to deliver on space and connectivity forecasts—assumptions Morningstar says come from PitchBook. It assumes that by 2035. SpaceX will be able to launch 340 Starship missions. which the firm characterizes as nearly one a day. It also assumes a reusability rate of 85% on those missions. Morningstar argues that this level of reusability extends cost and time savings beyond booster reuse to the upper stage spacecraft.
On top of those shared base-case assumptions, Morningstar builds the three AI scenarios.
In the “moonshot” case, Morningstar says SpaceX’s orbital AI platform works and achieves operating cost advantages over terrestrial computing. It then assumes the company deploys and commercializes one-fifth of Morningstar’s forecast of AI infrastructure computing capacity (excluding Russia and China) by 2040.
The firm also points to SpaceX’s estimates that satellites can be engineered and deployed with the equivalent of 100 kilowatts of AI processing capacity each. It assumes more than 100 of those satellites fit into the fairing of a Starship. leading to an orbital computing cluster of about 59. 000 satellites by 2035. That cluster is forecast to provide the equivalent of 11.6 gigawatts of AI computing capacity and generate $225 billion of annual revenue.
In the downside “No Go” scenario. Morningstar says orbital data centers won’t work or offer any advantage over terrestrial ones. It says SpaceX. having invested tens of billions to test the idea. would cut the project sometime around 2028—comparing the decision to management walking away from plans to build multiple small-car factories at Tesla.
In that case, Morningstar says SpaceX would continue to commercialize its terrestrial Colossus data center, but would not take a meaningful share of global computing capacity.
The most likely case is “Minimum Viable Product.” Morningstar says orbital data centers prove viable, but with capacity constraints. It also says this scenario benefits from SpaceX’s decreasing cost to launch large payloads on Starship. Under this path. Morningstar assumes SpaceX deploys and commercializes around 4% of its forecast AI computational capacity. targeting use cases that can tolerate higher data transmission latency.
For the hardware assumptions. Morningstar says satellites are engineered and deployed with the equivalent of 50 kilowatts of AI processing capacity each. It assumes more than 90 satellites can fit into the fairing of each Starship launch. That leads to an orbital computing cluster of about 48. 000 satellites by 2035. delivering the equivalent of 2.4 gigawatts of AI computing capacity and generating $47 billion of annual revenue.
Morningstar then ties those scenarios back to its $63 fair value estimate through probabilities.
It assigns the optimistic moonshot scenario a 7% chance of happening. It says this represents the combined probability that Starship is reusable 85% of the time and that orbital data centers scale well commercially. In that unweighted scenario. Morningstar says it adds $108 to the fair value estimate. and it lifts the final result by $7.56 per share.
It assigns the “No Go” scenario a 43% chance. It says even if Starship is successful, orbital AI data centers may not be, which detracts $6.20 from its fair value estimate on its own and weighs on the average by $2.67.
The “Minimum Viable Product” scenario is treated as the most likely, though “far from guaranteed.” Morningstar values it at $23.50 unweighted, adding $11.75 to the fair value weighted at 50% probability.
Morningstar’s valuation also reaches beyond orbital AI data centers, even while it refuses to forecast several other ambitions. It points to other projects and goals—moonshots and interplanetary colonization—saying these would likely require massive investment. could come with dilution to stockholders. and carry payoffs that could be positive or negative.
Because of that uncertainty, Morningstar says it views the broader set of projects as having “optionality” value. It says it did not explicitly model or forecast these projects, adding that its valuation is either agnostic to them or gives the group a net present value of zero.
Then comes the question investors really care about: what would it take for SpaceX to be fairly valued at $135 per share?
Morningstar frames one way to evaluate the opportunity as pricing “call options. ” where an investor pays a premium upfront to buy into a project at a predetermined strike price. If the project works and is worth more. the investor wins; if it doesn’t. the premium is lost and the option expires without value.
In Morningstar’s view. if its weighted $63 fair value estimate is accurate. the $135 offering price contains $72 per share of “option premium” for investors to participate in the long list of future projects SpaceX may undertake. It argues that the more investors believe cost-competitive orbital AI data centers will be. the closer a reweighted valuation would get to the offering price.
It says that by reweighting scenarios—77% likely for Moonshot and 23% likely for MVP, excluding the No Go scenario—the valuation equals the $135 offering price.
For Morningstar, the takeaway is simple even if the numbers aren’t: the IPO price assumes a much higher probability of its highest-upside orbital AI path than the firm is willing to price in today.
SpaceX IPO Morningstar SpaceX valuation Starship reusability orbital AI data centers $135 offering price $63 fair value AI infrastructure option value