As its initial public offering (IPO) draws ever nearer, market hype has fully intensified. The space company founded by Elon Musk has secretly submitted a listing application to the U.S. Securities and Exchange Commission (SEC), potentially marking the largest IPO in history. SpaceX’s target valuation ranges between $1.75 trillion and $2 trillion. However, one Wall Street analyst points out that investors may be overlooking the most important reason to invest in SpaceX’s IPO.
Even before its official announcement, the SpaceX IPO has already sparked a frenzy, with investors in the space age riding a wave of enthusiasm. The bullish case is strong: According to estimates, SpaceX’s 2025 revenue stands between $15 billion and $16 billion, with earnings before interest, taxes, depreciation, and amortization (EBITDA) reaching $8 billion.
Underpinning these solid financial figures is SpaceX’s launch business, which has successfully completed 635 Falcon rocket launches. Additionally, the Starlink satellite internet service has deployed over 10,000 satellites in orbit, providing internet connectivity to more than 9 million users.
Gene Munster, a veteran technology analyst and managing partner at Deepwater Asset Management, believes that while these profitable operations are reason for optimism, they represent only two pieces of a much larger puzzle. In a post on X, Munster stated: “Investors focused on SpaceX’s IPO are zeroing in on the launch business and Starlink subscribers. They’re missing the real story. Through its network of Elon-controlled entities, SpaceX has quietly assembled the only set of assets capable of building full-stack sovereign AI.”
Sovereign AI refers to each nation’s ability to develop and utilize artificial intelligence to improve society. According to estimates from global management consulting firm McKinsey, this market could be worth up to $600 billion by 2030.
Munster believes that SpaceX possesses the four essential pillars required to deliver full-stack sovereign AI:
The first pillar is SpaceX’s launch monopoly and high-margin logistics business, which provides the company with the resources to “deploy computing and data centers into orbit.” xAI, which merged with SpaceX earlier this year, supplies critical artificial intelligence infrastructure.
The second pillar is Starlink’s massive-scale network. Munster notes that Starlink also functions as a global internet service provider (ISP), enabling SpaceX to control computing traffic on the ground or in orbit without relying on other providers.
The third pillar is Grok, xAI’s frontier model. According to Munster, this model is trained on “proprietary high-velocity data assets (X)” and possesses a “real-time data advantage.”
The fourth pillar is Terafab, Musk’s upcoming high-performance semiconductor manufacturing facility, a joint venture between Tesla and SpaceX. The factory aims to solve the current “chip bottleneck” and achieve an annual computing capacity of one terawatt (one trillion watts)—more than the current global total combined.
Munster argues: “If vertical integration is the path to profit in the intelligence economy (and we believe it is), then SpaceX has a structural advantage unmatched by any company in the world.” He also notes that the value of this opportunity is difficult to estimate.
For SpaceX to realize the vision Munster describes, many conditions must fall into place. But if all goes well, the room for growth is limitless. For investors, the SpaceX IPO story is far more than just rockets and satellite internet; the potential sovereign AI play may be the true long-term source of value. However, whether this vision will materialize remains to be tested by time and the market.
