The day is finally here. The day when Elon Musk's space company, SpaceX, makes its debut on the exchanges. The frenzy around the listing is seen to be believed. As the norm is with anything related to Musk, strong views abound across the spectrum. And they all sound convincing.
While the skeptics point out that the valuation is unreasonable and beyond the realms of reality for a company making losses, the optimists highlight how the company will be a vital player in a world of AI and for building data centers in space, among others. While the skeptics are crying foul over corporate governance issues, optimists are singing hymns about Musk's track record of creating enormous wealth for his shareholders.
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Oppenheimer Is In The Band Of Optimists About SpaceX
Reputed broker Oppenheimer is very clear about which side it is on the SpaceX trade. Assigning a rating of “Outperform” for SPCX stock, the firm's rationale for owning shares of SpaceX rests on the fact that the company is present across the technology stack, including AI models, communications networks, hardware, manufacturing capabilities, and expert technical personnel.
Notably, the firm has a price target of $190 for the stock, implying a possible upside potential of about 41% from its IPO price of $135, with the firm forecasting that SpaceX can generate $900 billion in annual revenue and $500 billion in EBITDA by 2035.
However, the firm also pointed out that achieving these milestones within this time period will require nothing short of executional excellence from the company.
About SpaceX
Many would be surprised to know that SpaceX has been around for more than two decades. Founded in 2002, SpaceX is the world's dominant commercial space company and operates three major businesses, which are Launch Services, Satellite Communications, and Defense and Government Services.
Some of its notable highlights include being the largest launch provider in the world, the largest satellite operator in the world, one of the fastest-growing internet providers globally through Starlink, a major NASA and Pentagon contractor, and having ambitions to populate Mars.
So, now that Oppenheimer has given its verdict on SpaceX's explosive IPO, does that make the case for going long on its shares even stronger? Let's analyze.
Loss-Making But Potential There, This Could Be A Literal Financial Rocket Ship
For a company coming out with the biggest IPO of all time and commanding a valuation of almost $2 trillion before its shares even start trading, the expectations are that SpaceX's financials will be stronger than any other run-of-the-mill companies making their debut on the bourses. And though there remains a lot of room for improvement, especially on the profitability front, encouraging signs are there.
SpaceX's revenues have grown from $10.4 billion in 2023 to $18.7 billion in 2025, with the company even reporting profits of $791 million in 2024. However, in 2025, the company's losses were at $4.9 billion.
Further, net cash from operating activities has also risen in the same period to $6.8 billion from $4.5 billion in 2023. Overall, SpaceX closed 2025 with a cash balance of $24.7 billion, with negligible short-term debt on its books, alleviating liquidity concerns.
Coming to Q1 2026, the company's revenues rose by 15.4% from the prior year to $4.7 billion. However, there was a considerable widening of net losses to $5 billion from just $528 million in the year-ago period.
Yet, there was a jump in net cash from operating activities in the quarter to $1.05 billion from $727 million in the same period a year ago, with the company exiting the quarter with a cash balance of $15.9 billion.
Overall, the past three years have seen capex jump from $4.4 billion in 2023 to $20.7 billion in 2025. Interestingly, the growth of the share of AI on this front is noteworthy. While AI capex at $463 million in 2023 was the smallest among the three key major business segments of Space, Connectivity, and AI, it soared to $12.7 billion to become the largest.
This indicates that while the company may have started with a focus on space missions and connectivity, AI will be the base upon which these segments will be built in the future.
However, a deeper look at the segments will reveal that connectivity remains the primary revenue driver for the company currently. Out of the $4.7 billion in revenues reported by the company in Q1 2026, the connectivity segment had revenues of $3.3 billion. AI occupied the second spot at $818 million, which is impressive considering it is the company's newest segment. Space stood at $619 million.
Now, coming to the valuations, there is no denying the fact that, based on where the company is at right now, it is vastly overvalued. With a valuation of $1.75 trillion, approximately, and on sales of about $19 billion in 2025, SpaceX will trade at a trailing price-to-sales multiple of 92. This has been cited as a crucial reason why many venerable names of the industry are not subscribing to SpaceX.
Yet, they might risk missing this ship if what SpaceX is promising delivers.
Looking Ahead
With SpaceX, it is all about looking ahead. With a market opportunity of $28.5 trillion, there is no other company in the world that offers what SpaceX is offering.
SpaceX's business focus is primarily threefold: space, commercial satellites, and AI.
Starting with space, the company achieved 165 orbital missions throughout 2025. This marked the sixth straight year of setting a new personal best and represented roughly 85% of all U.S. orbital launches while nearly doubling the total number of missions completed by China. In addition, the firm recorded its 500th successful landing of a reused rocket and pushed a single Falcon 9 booster to 32 flights, achievements that would have appeared impossible just ten years earlier.
Starship, the platform central to the company's future ambitions, made significant advances. By April 2026, SpaceX had completed around 20 or more full scale test and operational flights of the integrated system. It reached full reusability, bringing the vehicle to operational readiness for commercial and government assignments. Important accomplishments included the first tower-assisted catch of the upper stage, the initial in-orbit propellant transfer demonstration essential for the NASA Artemis program, and the debut deployment of Starlink version three satellites from the payload area.
In terms of market potential, the launch services sector totaled about $14 billion in 2025, with SpaceX securing more than 60% share based on launch volume. Launch activities are projected to generate between $5 billion and $6 billion of the company's 2026 revenue. Government and military agreements, including the Starshield program, are expected to add around $7 billion separately, with Starshield alone contributing $3.2 billion.
Notably, Starlink serves as the primary profit driver at present, supported by a constellation of over 10,000 satellites with plans to expand toward 42,000. The network delivers connectivity in locations where traditional fiber and ground-based wireless options are unavailable, including sparsely populated regions, remote sites, aircraft, maritime vessels, and areas affected by disasters. Subscriber numbers grew strongly in 2025, reaching 8.9 million, more than double the 4.4 million recorded in 2024.
Future expansion depends heavily on the Starlink version three satellites, each offering about one terabit per second of downlink capacity versus 80 gigabits on the version two mini models. These larger satellites cannot fly on Falcon 9 and require Starship, making the launch and connectivity operations closely linked.
Finally, AI forms another key pillar and the one where the company is putting in the most dollars, anchored by xAI along with the massive Colossus data centers in Memphis, the Grok model, and the social media platform X, previously known as Twitter. In the near term, SpaceX is generating revenue from its computing resources through agreements with Anthropic and Alphabet (GOOGL) (GOOG) that could total as much as $2 billion per month through the middle of 2029. Over the longer horizon, the business aims to develop data centers in orbit, where continuous solar energy and natural cooling would be readily available.
To support this vision, SpaceX submitted an application to the Federal Communications Commission in late January 2026 seeking approval for up to one million satellites as part of a SpaceX Orbital Data Center System. The regulator accepted the filing in February, and Musk has stated that within two to three years, the most economical location for artificial intelligence computing will likely shift to orbit rather than ground-based facilities.
Final Take
As I commenced this analysis, I had stated that the opinions around SpaceX are as diverse as the man helming it. Genuine reasons to worry are its current valuation, while the dual class structure and Musk's overarching presence have been cited as one of the many corporate governance headwinds for the company. Yet, for the believers, there is nothing like SpaceX in the market right now, with its place as a strategic tech company closely identified with the U.S. Government, along with its market-leading presence in industries that will be vital to humanity in the future makes this a compelling opportunity to own the stock now.
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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