A $1.77 trillion IPO price can make almost any company look untouchable. If you’re trying to decide whether that kind of number reflects SpaceX’s strength or investor fever, Morningstar’s Nicolas Owens offered a simple answer: the business may be exceptional, but the stock can still be expensive.
That tension sits at the center of the SpaceX debate. Owens sees real competitive advantages, real upside, and real ambition, yet he still thinks investors may find a better margin of safety after the first rush fades.
Why Morningstar Sees a Big Gap Between Price and Value
Owens’ headline number is much lower than the IPO price implies. With SpaceX priced at $135 a share, the company lands at about $1.77 trillion. Morningstar’s valuation, by contrast, comes in at $780 billion.
That doesn’t mean Owens thinks SpaceX is mediocre. His point is narrower, and more useful. The $780 billion figure is a weighted average across three scenarios, not a flat claim that SpaceX can never be worth more. In other words, he is asking what the company is worth today once you account for both upside and failure.
The gap matters because the IPO price already leans hard into the best-case view. Owens described that upside case as “priced for perfection.” In Morningstar’s model, the most optimistic scenario values SpaceX at $1.9 trillion, or about $154 a share. But that outcome depends on two major bets paying off at the same time: Starship becoming reusable at scale, and data centers in space becoming a real business.
These are the key figures Owens laid out:
| Item | Figure | Why it matters |
|---|---|---|
| IPO price | $135 per share | The price public investors are being asked to pay |
| Implied IPO valuation | $1.77 trillion | The market value at that offering price |
| Morningstar valuation | $780 billion | Weighted average across three scenarios |
| Bull-case valuation | $1.9 trillion | Assumes the biggest projects work as hoped |
| Bull-case share price | $154 | The “priced for perfection” outcome |
| Probability of bull case | 7% | Morningstar’s estimate today |
| Time for clearer answers | 2 to 3 years | Owens’ window for learning more about the key projects |
The takeaway is sharp. SpaceX doesn’t need to be a weak company for the IPO to be hard to justify. It only needs to be a company whose boldest plans are still unproven.
A wider summary of that valuation gap appears in Investors.com’s report on the Morningstar estimate. The math is only one part of the story, but it explains why Owens isn’t chasing the opening price.
The Bull Case Depends on Starship and Orbital Data Centers
Owens was careful not to talk past the strength of the business. He said SpaceX has a moat, and that matters. The company has built a cost advantage through the design of its rockets and the pace of its launch operations. It has also learned by doing, again and again, through the deployment of thousands of Starlink satellites.
That kind of repetition is hard to match. Every launch sharpens operations. Every satellite batch adds experience. Owens’ view is that no likely competitor is close to catching up at SpaceX’s current rate, and that lead becomes even more powerful if Starship works and scales.
Starship sits near the center of his upside case because reuse is the hinge. If SpaceX can repeatedly fly and scale that system, its launch cost edge could widen. Then the company would have more room to support larger and more ambitious businesses in orbit.
The second part of the bull case is even more speculative, and more fascinating. Owens pointed to the company’s AI project around data centers in space as the main new growth story. He made a striking point there: he couldn’t think of another company with a reasonable chance of achieving it. SpaceX’s launch advantage is what makes the idea plausible at all.
SpaceX’s strongest argument is that its next big bets build on an advantage it already owns: getting payloads into orbit at lower cost and higher speed than rivals.
Still, plausibility isn’t the same as proof. Owens assigns only a 7% chance to the full upside scenario because both pieces have to work. Starship must become reusable at scale, and orbital data centers must turn into a commercial business. If either leg breaks, the trillion-plus math changes fast.
That tension is why SpaceX attracts such wide valuation ranges. For a broader look at how narrative, rarity, and valuation collide in this IPO, Aswath Damodaran’s SpaceX IPO odyssey captures the same push and pull. SpaceX may be building toward something huge, but investors are still being asked to pay before the evidence is complete.
Why the Musk Factor Doesn’t End the Debate
One of the most revealing moments in the discussion came when the market case ran into the Elon Musk case. The host’s point was plain: Musk companies don’t always trade like normal companies. Investors often pay for surprise, speed, and the chance that Musk changes direction in ways a spreadsheet can’t predict.
That matters here because SpaceX doesn’t arrive as an ordinary industrial business. It carries the glow of a founder whose companies have often pulled markets into stories first and numbers later. The host even floated the idea that no one knows what Musk might do next, including a future move that links SpaceX more closely with Tesla. That isn’t part of Owens’ model, and that gap is the point.
Owens didn’t pretend the “Musk factor” is easy to capture. He answered it by pulling the conversation back to probabilities. Yes, there is a nonzero chance that the whole vision works. Yes, there is room for outcomes that standard valuation work struggles to fully reflect. But that still doesn’t erase the need to weigh what must go right.
The contrast with Musk’s other businesses sharpened the discussion. The host argued that Musk is facing tougher competition in several fields: BYD in electric vehicles, Waymo in autonomous driving, Grok against stronger large language model players, and X against a crowded social media market. Space may be different. Owens said the two strongest lines at SpaceX today are rockets and Starlink, and he sees the company winning in those markets. The AI business, by comparison, is still undetermined.
That distinction is important. SpaceX is not being valued only on what it already dominates. A big slice of the excitement comes from what investors hope it can dominate next. Owens’ framework separates those two ideas. The current business is strong. The future business could be enormous. But the leap from one to the other still needs evidence.
IPO Technicals Could Lift Shares Before Fundamentals Catch Up
Owens also made a point that has little to do with rocket science and everything to do with market plumbing. The IPO setup itself may push SpaceX higher in the short run, even if the valuation already looks stretched.
The most obvious reason is supply. Only about 4% of the company is being floated. That is a tiny amount of stock for a company with this much name recognition, institutional demand, and retail fascination. Scarcity can act like fuel in a hot IPO, and Owens said market conditions are primed for exactly that.
He also pointed to fast-tracked index inclusion. If funds need to buy the stock soon after listing, that adds another source of demand. Put that next to Musk’s retail following, and you get a setup where more buyers may show up than shares available. Owens said those are rational moves by the company to manage supply and demand, and they help explain why the deal could lock in a price without even working through a range.
This is where the timing issue becomes critical. A stock can trade above fair value for a while when the float is thin and enthusiasm is thick. Early price action, then, may tell you more about demand mechanics than long-term worth.
Owens’ caution shows up on the other side of that initial squeeze. Over the next 180 and 360 days, more supply is likely to enter the market. That changes the balance. When scarcity eases, price support from technical factors can weaken. At that point, investors tend to look harder at execution, capital needs, and whether the grander projects are moving from promise to proof.
A broader look at how spending and ambition feed the IPO narrative appears in NPR’s report on SpaceX’s IPO plans. That broader context helps explain why the stock could be crowded early and questioned later.
Owens’ argument is not that SpaceX will fall apart after listing. His point is more measured, and more useful. The first phase may be driven by enthusiasm and forced buying. A better margin of safety may appear only after the market has more shares to trade and more facts to judge.
Final Thoughts
A huge IPO price can make a company look like a sure thing. Owens’ view is a reminder that even rare businesses can arrive with a stock price that asks too much, too soon.
SpaceX has real strength in rockets and Starlink, and Owens doesn’t dispute that. What he disputes is the idea that public investors should pay near-perfect prices before Starship reuse and orbital data centers prove themselves. For anyone watching this IPO, the clearest lesson is simple: great company and good entry point are not always the same thing.
