SpaceX’s $1.8 trillion IPO: what the valuation reveals

The paper traces the economics of the launch industry – from high fixed costs during the expendable era, to NASA procurement rules enabling fixed-price commercial spaceflight, to a reusable model that lowered the advertised cost of reaching orbit by a factor of about 20.

The launch business is too small to support the valuation of SpaceX, argues the paper – entitled The $1.8 Trillion Question: Inside the Economics of SpaceX – but investors are instead betting on such second-order consequences as a dominant satellite-broadband utility in Starlink, the promise of fully reusable heavy lift in Starship and orbital computing following last year’s acquisition of artificial intelligence-focused xAI by SpaceX.

A valuation near $1.8 trillion against about $18.7 billion of 2025 revenue implies a price-to-sales multiple in the mid-90s, the paper notes, adding that SpaceX reported a consolidated net loss of roughly $4.9 billion in 2025 due to heavy investment.

The 4 key assumptions behind SpaceX’s $1.8 trillion valuation

“No conventional aerospace or telecom valuation framework gets close to justifying that number on current financials. To make sense of it, you have to identify the specific assumptions the market is pricing in, and then ask how likely each is to hold,” the paper says, breaking down these assumptions to:

1. Starlink becomes a globally dominant broadband utility, which is the foundation for the valuation
2. Starship works, and works cheaply
3. the AI and orbital computing story is real
4. the competitive ‘moat’ keeping out rivals holds for a decade or more

Can SpaceX deliver? The conditions that must hold for its valuation to stand

“The honest answer to the $1.8 trillion question is conditional,” the paper concludes. “The valuation can be justified if a demanding sequence of things goes right: if Starlink continues to compound and expand its margins, if Starship crosses the gap from promising test vehicle to cheap, fully reusable workhorse, if the orbital-AI thesis turns into revenue, and if no competitor closes the gap for a long time. Remove any one of those and the number looks stretched. Remove two and it looks indefensible.

“The company changed the economics of getting to space. Whether it has correctly priced the economics of being in space is the question its new public shareholders have just agreed to answer with their money. The engineering case is closed. The financial case is still in flight.”