Twenty years ago, SpaceX was a startup that couldn’t keep its rockets from exploding.

Today, it accounts for 86% of all US orbital launches. It built Starlink, the world’s largest satellite internet network, from scratch. And through its acquisition of xAI, it’s now one of the biggest artificial intelligence (AI) companies on the planet.

This Friday, it goes public in what will be the largest IPO in history, with the goal of raising $75 billion at a $1.75 trillion valuation.

Millions of investors will finally get their shot at owning a piece of it.

Today, it’s time to answer if SpaceX justifies its unprecedently high valuation… and whether you should buy the stock on Day 1.

• First, the positive.

SpaceX is the single most important company in America today. It’s the Roger Bannister of innovators.

We used to think it was impossible to run a mile under four minutes. Then Roger Bannister did it in 1954, and something strange happened. Over 40 runners beat the clock in the next few years.

The barrier was never physical. It was psychological.

By making rockets reusable and launching the largest-ever 5,000-plus-ton flying object into orbit, SpaceX showed it’s possible to do really hard things in the physical world.

SpaceX also built Starlink, bringing high-speed internet to remote villages… ships sailing the open seas… planes… and other places traditional telecom companies never cared to reach.

It quickly built two of the world’s largest AI clusters—Colossus and Colossus II—through its xAI division.

And SpaceX will become key to unlocking space businesses that don’t exist yet. If it can execute its plan to create orbital data centers to supply compute to AI, it will be worth many multiples of its current valuation.

• The problem? Only Starlink is profitable.

Starlink was hugely profitable in 2025, throwing off billions in operating profit. But SpaceX as a whole posted a net loss of about $4.9 billion. The first quarter of 2026 brought another net loss of around $4.3 billion.

Meanwhile, our proprietary Real Cash Flow metric showed SpaceX ringing in at about negative $10 billion in 2025.

The reason for the big losses: enormous capital expenses (or CapEx) to build AI infrastructure and Starship, its massive next-gen rocket. In 2025, SpaceX’s CapEx hit about $20.7 billion.

These investments are part of the plan. SpaceX’s current losses are intentional, even healthy.

The company generates positive cash flow from its operations. And if you strip out the heavy growth investments, the business was profitable in 2025, making about $6.6 billion.

In other words, this is a company deliberately spending big today to build something much bigger tomorrow. I think these bets will pay off.

But…

• It violates one of the core rules in our Disruption Investor advisory.

We only invest in profitable companies.

SpaceX fails that test.

Now, if you know your disruption investing history, you may be scratching your head.

Because several of the greatest disruptors in history followed this exact playbook of “grow now, profit later.”

Both Amazon (AMZN) and Tesla (TSLA) reinvested all their profits and then some back into their businesses in their early days, “intentionally” losing money to build for the future.

Their stocks each gained more than 10,000%. It didn’t seem to matter whether they were profitable.

The difference is Tesla and Amazon were still small at that point in their journeys. Amazon turned reliably profitable in the early-to-mid 2000s. It was worth $10 billion to 15 billion at that time.

That’s less than 1/100th the size of SpaceX today!

See the problem? I think SpaceX is going to win. But it’s priced like it already has won.

At a roughly $1.75 trillion valuation on $18.7 billion of 2025 revenue, you’re paying nearly 100X sales to own the stock.

For comparison, AI company Anthropic trades at something closer to 20X sales on the private markets and is growing much faster than SpaceX. Of course, Anthropic is the fastest-growing company of its size in history. It too will IPO this year.

Elon has an amazing track record. And having met several SpaceX engineers, I’m confident the company will achieve its grand ambitions.

But when expectations are this high, some disappointment is almost inevitable.

So we wait.

• That doesn’t mean we ignore SpaceX.

We’ll be watching its progress closely the next several quarters. Specifically, we’re looking for three key things that could make SPCX a buy.

These include:

1.     Starship proving it’s a true workhorse.

2.     Starlink’s growth continuing to accelerate—and its subscriber base pushing toward 20 million or more.

3.     Grok gaining ground across consumers and businesses, and more lucrative agreements being made to rent out AI compute.

If you’d like to follow along with us to keep track of these milestones, one of the easiest ways to do that is by signing up for our free letter, The Jolt.

We track all things involving disruption investing in The Jolt, and we’ll have a lot more to say on SpaceX once its IPO is in full swing.

You can join our mailing list here. 

Stephen McBride  Chief Analyst, RiskHedge