The popular American financial services firm Morningstar decided to swim against the current in the sea of positivity with regard to the upcoming SpaceX initial public offering (IPO), according to a June 8 article it published.
Specifically, the article explains that the company estimates its ‘minimum viable product’ projection as the most likely outcome for Elon Musk’s space company in the next decade and that, under such circumstances, the fair stock price would amount to approximately $70.
Notably, SpaceX shares are set to go public at $135, for a total valuation of approximately $1.75 trillion, implying a 48% drop from the IPO target.
The financial services company also provided the weighted average target based on its three main projections that would see SpaceX valued at $63 for a 53% stock price crash.
Morningstar’s MVP SpaceX IPO scenario
Examining the ‘minimum viable product’ scenario reveals it assumes that orbital data centers prove viable, with the remainder of the firm’s business supporting 48,000 50-kilowatt satellites for a total of 2.4 gigawatts of artificial intelligence (AI) computing capacity.
Such a setup would generate $47 billion in annual revenue for SpaceX, backing the stock price target, Morningstar’s Nicolas Owens wrote. Crucially, the company gave only a 50% probability of the scenario playing out while emphasizing it extended significant ‘benefit of the doubt’ when constructing it.
The SpaceX stock IPO bear case
Unfortunately for SpaceX bulls, the ‘no go’ projection was the second-most likely with an assigned probability of 43%. In this scenario, space-based AI data centers would suffer the same fate as Tesla’s (NASDAQ: TSLA) small-car factory project sometime around 2028: cancellation.
Furthermore, this projection assumes that the firm continues developing terrestrial facilities but takes no significant market share, leading to a fair stock price of roughly $40 for a 70% drop from IPO.
The SpaceX stock IPO bull case
Lastly, Morningstar also outlined the other option with ‘a lot of benefit of the doubt’ – the ‘moonshot.’
This scenario would have SpaceX see triumphant success both in terms of orbital AI data centers and reusability of rockets, assuming nearly 12 gigawatts are deployed by 2035 for $225 billion in annual revenue.
The bull case, with a 7% chance of happening, would then justify a SpaceX share price of just under $160 for an 18.52% rally from the IPO.
Morningstar an outlier to Wall Street SpaceX stock IPO optimism
Elsewhere, Morningstar’s projections are a standout given the widespread institutional optimism regarding the SpaceX IPO. So far, perhaps the two most-discussed endorsements came from Nvidia (NASDAQ: NVDA) CEO Jensen Huang and the banking giant Morgan Stanley (NYSE: MS).
To begin with, the semiconductor giant’s top executive offered few specifics in a CNBC appearance on June 1, but noted that investing in Elon Musk’s space company – and in OpenAI and Anthropic after their own likely IPOs – would be akin to buying Google (NASDAQ: GOOGL), Meta (NASDAQ: META), and Amazon (NASDAQ: AMZN) stock in the early days.
Morgan Stanley offered more precise figures as it estimated that SpaceX could reach a revenue of $3.4 trillion by 2040 and approach $330 billion near 2030. Curiously, Goldman Sachs (NYSE: GS) – another IPO underwriter – came up with a remarkably similar $322 billion for the same year.
Why SpaceX stock is almost guaranteed a 2026 upsurge
Finally, no matter the fair value and the eventual success of the company, SpaceX is well positioned to rally shortly after going public on June 12.
Along with Elon Musk’s name and reputation – which has, admittedly, deteriorated severely in multiple traditionally-amicable circles – the equity will enjoy significant automatic buying within the first handful of weeks thanks to the fast-track inclusion into the Nasdaq-100.
Additionally, the firm is set to unleash an unusually small amount of shares: typically, IPO float ranges from 15% to 25%, while SpaceX’s will be between 4% and 5%, indicating demand is all but guaranteed to outstrip supply.
On the flip side, the offering leaves several questions about price sustainability. Despite being presented in a positive light, the decision to make 30% of initial equity available to retail – the standard number is closer to 10% – has been taken as a possible signal that institutional interest is disappointing.
The S&P 500’s lack of fast-track approval presented another limiting factor for demand, while Jim Cramer recently voiced some skepticism about the markets having enough money to fully invest in 2026 between SpaceX going public on June 12, the other two major anticipated AI IPOs, and Google’s $80 billion equity fund raise.
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