SpaceX's stock could trade like Tesla 'on steroids' after IPO, analyst says

By William Gavin

SpaceX plans to go public this year. If it does, its stock could be even more volatile than Tesla's.

SpaceX and Tesla will likely both benefit from the so-called "Musk premium," says an analyst.

Interest in SpaceX has grown exponentially over the past few years as the company morphed into a space-sector titan. But investors should expect some turbulence as the company prepares for its public debut.

Shares of a publicly traded SpaceX will act like Tesla's stock (TSLA) "on steroids," PitchBook analyst Franco Granda wrote in a Tuesday report. Tesla is known for having a volatile stock.

SpaceX is poised to file confidentially for an initial public offering as soon as this month, according to Bloomberg, which reports that the company may seek a valuation of more than $1.75 trillion. It's targeting a June IPO to coincide either with Musk's birthday or a rare planetary alignment.

The Starbase, Tex.-based company is estimated to be worth about $1.25 trillion following the acquisition of xAI, Musk's artificial-intelligence firm, which is behind the controversial Grok chatbot.

PitchBook estimates that SpaceX will be capable of generating $150 billion in revenue by 2040, as well as adjusted profit of $95 billion. That would be up from as much as $16 billion in revenue on $8 billion of profit last year. Some $42 billion in future annual revenue could come from Starlink, a satellite-internet business that currently accounts for most of SpaceX's cash.

The estimate does not account for xAI, which has been bleeding cash fast but could pick up additional work with the U.S. Defense Department. The projections also assume that Tesla and SpaceX do not merge, though that possibility has been floated by Musk and analysts in the past.

"My companies are, surprisingly in some ways, trending toward convergence," Musk wrote on X last November.

A lot of lessons investors have learned from Tesla will likely be applicable to SpaceX, Granda said. For one, both are subject to Musk's infamous optimism.

Granda pointed to Tesla's promise that it would produce 5,000 units weekly by late 2017, before the company suffered "production hell" and missed its target. But when it finally hit that milestone in mid-2018, the stock surged.

Read: You can invest in SpaceX before its IPO - but should you?

SpaceX has had similar delays. Development of the Starship mega-rocket has suffered several setbacks, as have other vehicles in the company's history. Musk had once pinned 2022 as an "aspirational" timeline to send an uncrewed mission to Mars, a task still years away.

However, investors have grown to expect Musk's timelines to be flexible.

That's why they were calm as a December robotaxi deadline came and went. The stock then popped when Musk achieved the target slightly behind schedule. Granda calls this a "credibility ledger," where investors automatically price in delays while focusing on the overall vision.

That could be useful for SpaceX, which recently pushed back its plans to colonize Mars. It's also filed with regulators to launch up to 1 million space-based data centers into orbit, which would be reliant on progress with Starship. SpaceX now plans on developing a city on the moon.

See: Why SpaceX is putting a 'self-growing' city on the moon over Elon Musk's Mars dreams

But a public SpaceX, answering to a Wall Street investor base, will still have to hit those goals while also showing progress with xAI and Starlink. Expect potentially extreme stock reactions: Granda predicts that major news items which would have driven 10% to 15% moves for Tesla's stock will end up causing SpaceX shares to swing by as much as 20% to 30%. That's partially because SpaceX is expected to have a public float of just 3.3%, he added.

SpaceX stock will also likely benefit from the so-called "Musk premium," which has helped keep Tesla shares high even as its core EV business declines. But that halo also leaves Musk's companies overly dependent on him.

"Over 50% of the shareholders today would say that Tesla is Elon in Elon is Tesla," Cantor Fitzgerald analyst Andres Sheppard previously told MarketWatch. "There are a lot of people, maybe even a majority, who correlate Tesla's success with Elon's tenure."

Tesla's annual report notes the company's reliance on Musk and warns that shares could take a dive if Musk had to sell some of his stake. SpaceX, which Musk founded over two decades ago, could be just as dependent on its CEO, who owns an estimated 44% of the company.

Negative news from Tesla will likely put pressure on SpaceX shares and vice versa, according to Granda. Meanwhile, Musk's politics have also been a source of controversy - and lost sales - for Tesla.

"The combination of lower float, earlier-stage technologies and concentrated Musk exposure suggests volatility exceeding Tesla's historically turbulent patterns," Granda said.

-William Gavin

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03-03-26 0724ET