SpaceX Valued at $2T+ Despite Fundamentals Suggesting $489B, Analyst Says

SpaceX went public on June 12th in what became the largest initial public offering in history, raising $75 billion at a $1.75 trillion valuation. The stock climbed even higher after that opening, reaching new peaks as investors rushed in. But one analyst who has spent years studying undervalued companies and their cash flows looked at the numbers and concluded the market had detached from reality.

Louis Gerard, writing for Seeking Alpha, argues that SpaceX's current $2 trillion-plus valuation bears almost no relationship to what the company's actual businesses are worth. Using a sum-of-the-parts analysis—breaking the company into its constituent operations and valuing each separately—Gerard arrives at a figure of $489 billion, or $38 per share. That's a gap of more than $1.5 trillion between what the market is paying and what the fundamentals suggest the company is worth.

The heart of SpaceX's profitability is Starlink, the satellite internet business. It generated $11.4 billion in revenue last year and produced $4.4 billion in operating income. Those are real numbers from a real business serving real customers. But Starlink faces a familiar challenge: average revenue per user is compressing as the market matures and competition increases. More troubling, Starlink is being forced to subsidize another division—xAI, Elon Musk's artificial intelligence venture—which is hemorrhaging money at a scale that threatens the entire enterprise.

xAI is burning through $8 to $10 billion annually in losses. The company has committed to spending $119 billion on capital expenditures, much of it directed toward building the computational infrastructure that AI development demands. That's not a temporary investment phase. That's a structural drain on cash that Starlink's profits, however substantial, cannot indefinitely cover. The math becomes harder to ignore the longer you stare at it: one division is being systematically depleted to fund another that shows no clear path to profitability.

Gerard's skepticism rests on two observations about the current market. First, the float—the number of shares actually available for public trading—remains extremely limited. Most SpaceX shares are held by insiders and early investors who have no immediate reason to sell. That scarcity artificially inflates the price of the shares that do trade, creating a feedback loop where limited supply and high demand produce valuations untethered from earnings. Second, there is a speculative premium baked into the stock price, the kind of enthusiasm that attaches itself to space exploration and artificial intelligence regardless of whether the underlying business can justify it.

But Gerard expects that float to expand. As lockup periods expire and insiders begin to diversify their holdings, more shares will enter the market. When that happens, the scarcity that has been supporting the valuation will evaporate. A stock trading at $2 trillion on the back of extreme float constraints and pure speculation is, in his view, a sell—not because SpaceX lacks interesting businesses or real revenue, but because the price has moved so far ahead of what those businesses can actually earn that the risk of disappointment is asymmetric and severe.