Nasdaq has revised its rules, ETFs have launched a wave of new products, and passive funds are already estimating buying demand—SpaceX has altered the way markets operate even before going public. However, a price-to-sales ratio as high as 93 and ongoing losses are causing an increasing number of investors to question whether this capital bonanza can be sustained.
Over the coming weeks, Elon Musk’s SpaceX is set to launch its IPO, with an expected valuation of $1.75 to $2 trillion and a fundraising target of up to $75 billion, potentially becoming the largest IPO in history.
However, facing this unprecedented transaction, many retail investors have chosen to remain cautious.
Several investors interviewed by Business Insider believe that, despite its popular concepts such as rockets, satellites, and artificial intelligence, SpaceX's current valuation is too high and has already priced in future growth expectations.
Neil Rozenbaum, an investor holding technology stocks such as TSLA.O, said SpaceX is a “remarkable company,” but market hype has become excessive. He expects the company to follow the pattern of many popular IPOs: a sharp rise on the first day of trading, followed by a pullback. He said:
Will I want to hold SpaceX in the future? Yes, but I likely won’t buy on its first day of listing.
Canadian investor Bilaal Dhalech is also optimistic about the company’s long-term prospects but plans to wait for a pullback before considering an entry. He noted that while SpaceX generated $18.7 billion in revenue in 2025, it incurred losses of nearly $5 billion, whereas tech giants such as NVIDIA (NVDA.O), Meta Platforms (META.O), and Microsoft (MSFT.O) have stronger profitability and cash flow support.
Some investors have even questioned SpaceX’s development plans. Trader Marko Greguric believes that the prospectus’s plans for asteroid mining and Martian communities sound more like “crazy science fiction.”
He said, "The main purpose of an IPO is to allow smart money and early investors to sell their holdings to retail investors." He also believes that a $2 trillion valuation is clearly too high.
Similar discussions have also appeared on investment communities like Reddit. Some users have questioned what revenue and profit growth would be required to support a valuation of over $1.5 trillion, while others have bluntly stated that the market is not focused on corporate profitability, but rather on whether the stock price can continue to rise.
Index providers and funds are beginning to position themselves early.
Despite ongoing controversies, SpaceX has grown large enough to influence the rules of capital markets.
Nasdaq has amended its rules to allow SpaceX to be included in the Nasdaq-100 Index just 15 trading days after its listing, reducing the previous minimum waiting period of three months. FTSE Russell has adopted similar measures, and S&P Dow Jones Indices is currently evaluating potential adjustments.
Brian Hartigan, Head of Global ETF and Index Investments at Invesco, said that the role of an index is to cover the largest and most liquid companies in the market.
However, Lynn Martin, President of the NYSE Group, parent company of the New York Stock Exchange, criticized Nasdaq for altering its rules to attract SpaceX, arguing that market integrity should not be used as a competitive tool.
According to Bloomberg Intelligence, if SpaceX rapidly enters major indices, passive funds tracking those indices could generate nearly $20 billion in buying pressure, equivalent to about a quarter of its IPO fundraising amount.
AI stories and Musk's halo effect drive the hype
The enthusiasm around SpaceX comes not only from index funds.
An increasing number of investors are accepting Musk’s view that SpaceX is essentially an AI infrastructure company, not just a rocket enterprise.
Jeff Muhlenkamp, portfolio manager of the Muhlenkamp Fund, said: “Now is an era of buying growth and buying stories.”
Many investors have already positioned themselves by investing in funds that hold equity in private technology companies. Janice Vines, a 65-year-old retiree, said she has purchased related ETFs and plans to invest an additional $20,000 in SpaceX stock after its listing.
SpaceX plans to allocate up to 30% of its offering to retail investors. Based on a $75 billion fundraising target, retail investors could receive approximately $22.5 billion in shares—an unprecedented amount in U.S. IPO history.
Steve Sosnick, Chief Strategist at Interactive Brokers, believes that such a high proportion of retail allocation may prematurely exhaust post-listing buying demand, with some investors even needing to sell assets like Tesla or Bitcoin to raise funds.
Meanwhile, Wall Street is rapidly developing products around SpaceX, with over 20 related ETFs submitted this year, covering leveraged, inverse, and options strategies.
The super IPO will impact the entire tech industry.
There is significant market disagreement over whether SpaceX's valuation is reasonable.
Yale University Emeritus Professor of Finance Roger Ibbotson believes the market has already granted SpaceX a clear "superstar premium."
Based on revenue over the past 12 months through March of this year, SpaceX has a price-to-sales ratio of 93x at a $1.8 trillion valuation, approximately 15 times the average of the Nasdaq 100 Index.
A Danish pension fund with $25 billion in assets under management has explicitly stated it will not invest in SpaceX, with its chief investment officer even describing the company’s governance structure as “catastrophic.”
However, the bullish camp remains steadfast. David Wagner, portfolio manager at Aptus Capital Advisors, plans to continue buying SpaceX shares in the first month after its listing, betting that passive funds will continue to drive the stock price higher.
To Owen Lamont, portfolio manager at Acadian Asset Management, SpaceX’s significance extends beyond that of a single company.
As OpenAI and Anthropic also prepare for major IPOs, the outcome of SpaceX’s listing could serve as a key indicator for the entire tech industry. A successful IPO could spur more super unicorns to enter public markets, while a failure might cool the momentum behind future large-scale tech IPOs—and even impact the listing timelines of companies like OpenAI and Anthropic.