Wall Street is currently attempting to solve a mathematical riddle: how to price a company that essentially has no equal. As Elon Musk’s SpaceX moves toward what could be the largest initial public offering in history, investors are abandoning traditional aerospace benchmarks in favor of a more aggressive, unconventional logic to justify a SpaceX $1.75 trillion valuation.
The company has confidentially filed for a U.S. IPO and is scheduled to hold an analyst day on April 21. To reach a valuation of $1.75 trillion, financial backers—who are on track to raise $75 billion in the offering—are arguing that SpaceX should not be compared to the “legacy” titans of the sky or the earth. Instead, they are benchmarking the firm against AI infrastructure plays and data-center powerhouses, treating the rocket company less like a transportation service and more like the foundational plumbing of the next economic era.
This shift in perspective reflects a broader trend on the Street, where “secular” economic shifts—long-term trends that fundamentally alter how business is done—are being used to override traditional revenue and earnings multiples. For SpaceX, this means distancing itself from the slow-growth trajectories of established aerospace and telecom firms to embrace the high-velocity valuations of the AI age.
Moving beyond the legacy aerospace model
Under a traditional valuation framework, SpaceX would be measured against the likes of Boeing and Lockheed Martin, or their joint venture, the United Launch Alliance. However, investors argue that these comparisons are obsolete. While legacy firms often operate on government contracts with predictable but modest growth, SpaceX has fundamentally disrupted the unit economics of space through its reusable launch system.
Because SpaceX has driven down the cost of reaching orbit and expanded into a rapidly growing commercial market, backers contend that the company deserves a “re-rating.” Rather than looking at aerospace, some institutional investors are pointing toward industrial names like Vertiv and GE Vernova. These companies have seen their stocks soar not because they are “industrial” in the vintage sense, but because they provide the “picks and shovels”—the cooling and power infrastructure—required for the AI data-center buildout.
By framing SpaceX’s launch operations as the essential infrastructure for the satellite age, investors are attempting to apply the same premium multiples that have rewarded AI-adjacent stocks over the last two years.
Starlink: From telecom to platform economics
The most contentious part of the valuation lies in Starlink, the company’s satellite internet constellation. The reflexive comparison for any connectivity business is legacy telecom giants like AT&T and Verizon. But for SpaceX investors, these companies represent a dead end of aging fixed infrastructure and saturated domestic markets.
Instead, some backers are privately benchmarking Starlink against Palantir Technologies. The logic here is not based on what the companies sell, but on their financial profiles: high return on invested capital, strong margins, and an asset-light composition once the initial infrastructure is deployed. Palantir, often one of the priciest stocks in the market, has traded at 43 times expected revenue and 75 times earnings.
Even with that aggressive benchmark, the numbers remain staggering. According to calculations from PitchBook, a $1.75 trillion valuation would place SpaceX at 110 times its 2025 revenue estimates—making it significantly more expensive than even Palantir on a relative basis. Franco Granda, an analyst at PitchBook, noted that investors are essentially paying a “platform premium” today in anticipation of “infrastructure-monopoly economics” tomorrow.
| Business Segment | Legacy Benchmark | Unconventional Benchmark | Valuation Logic |
|---|---|---|---|
| Launch Services | Boeing / Lockheed Martin | GE Vernova / Vertiv | AI “Picks and Shovels” Infrastructure |
| Connectivity | AT&T / Verizon | Palantir Technologies | Secular Growth & Platform Margins |
| Overall Firm | Aerospace & Defense | High-Growth AI Tech | “Musk Premium” & Total Addressable Market |
The ‘Musk Premium’ and the risk of rationalization
Central to this valuation is the personal brand of Elon Musk. As seen with Tesla, Musk’s companies often command rich multiples because investors are betting on his ability to execute on futuristic visions. SpaceX CFO Bret Johnsen recently told IPO bankers that the company is selling into “the largest total addressable market in human history,” estimating the broader space business at $370 billion and the specific market for Starlink at $1.6 trillion.
However, not everyone is convinced that these unconventional yardsticks are grounded in financial reality. Aswath Damodaran, a valuation expert and finance professor at New York University’s Stern School of Business, suggests that the current pricing may be more about psychology than math.
Damodaran argues that because SpaceX has a unique capacity to launch satellites at a scale and price no one else can match, it is inherently difficult to price. He suggests that investors may have already decided SpaceX is a “great buy” and are now searching for a way to justify that decision through “exposed rationalization,” hoping that market momentum will carry the stock upward once it hits the public exchange.
For smaller funds, the strategy is often simpler: trust the giants. Jay Bala, a portfolio manager at Toronto-based AIP, noted that he is “piggybacking” on the due diligence of the world’s largest funds, acknowledging that detailed financial data for the private company can be difficult to obtain.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.
The financial world now looks toward the April 21 analyst day, where SpaceX is expected to provide more clarity on its operational trajectory and the specific metrics it wants the market to employ for its valuation. This event will serve as the first major litmus test for whether Wall Street accepts the “AI infrastructure” logic or returns to the traditional rules of aerospace accounting.
Do you feel the AI-infrastructure logic holds water for SpaceX, or is the valuation overextended? Share your thoughts in the comments below.
