Morningstar values SpaceX at $780B, half its IPO target

Original Article ↗ Hacker News Discussion ↗

Valuation and Market Rationality

  • Many see Morningstar’s ~$780B figure as already excessive, with some arguing SpaceX is worth closer to $150–300B based on current revenue/EBITDA, and that $1.5T is “science fiction.”
  • Others note SpaceX is already trading around ~$1.5T in secondary markets and argue markets are pricing a small probability of an enormous future payoff (e.g., “10% chance of a $10T outcome”).
  • Multiple comments argue today’s market behaves more like gambling or meme trading than a fundamentals-based weighing machine, citing Tesla, Bitcoin, and meme stocks.
  • Some push back that equity prices should be about future earnings, and SpaceX’s upside in launch and space infrastructure could be huge, though specifics are debated.

Index Inclusion and Retirement Funds

  • Major concern: changes to index rules (shorter waiting periods, relaxed float/earnings requirements) appear tailored to fast-track SpaceX into benchmarks (S&P 500, Nasdaq-100).
  • Since many pensions/401ks are in index funds, inclusion effectively forces broad passive ownership at whatever price the small IPO float clears.
  • Critics frame this as gaming passive investing and “enshittifying” index funds; fear that a later crash would damage trust in passive products.
  • Others argue SpaceX will initially be a small index weight, so even a collapse would look like a normal market fluctuation, and that indexes always contain dubious names.

Business Fundamentals: Launch, Starlink, xAI

  • Core launch business is praised as dominant and technically impressive but seen by some as low-growth (~7% YoY) and not run for maximum profit.
  • Starlink is viewed as the main economic engine with strong recurring revenue, but its total addressable market is questioned:
    • Competes poorly where fiber exists.
    • Rural/remote markets are large in area but relatively small in population and shrinking as terrestrial networks expand.
    • New LEO competitors and geopolitical reliability concerns are noted.
  • xAI is widely seen as a major drag: very high burn, intertwined with SpaceX to bail out earlier Musk ventures. One view claims recent compute rental deals could make it cashflow-neutral; others stress the revenue depends on a single competitor that can cancel quickly.

Space Debris and Kessler Syndrome

  • One camp argues Kessler syndrome in low Earth orbit is overstated: LEO is “self-cleaning,” Starlink orbits decay in ~5 years, and space is vast with separable orbital shells.
  • Another camp counters that parts of LEO can take decades–centuries to decay, satellites do collide, and debris growth could materially raise costs or restrict orbits, hurting everyone, including SpaceX.

Musk’s Role and Meme Dynamics

  • Many see the valuation as heavily tied to Musk’s persona and a “cult of personality,” similar to Tesla’s meme-stock behavior.
  • Several commenters believe the underlying engineering business would be valued far lower without Musk, while his involvement is also blamed for value-destructive side bets (xAI, social media).

AI/IPO Bubble and Passive Investing Risks

  • SpaceX, OpenAI, and Anthropic are grouped as AI-adjacent IPOs whose valuations rely on many low-probability, high-upside assumptions with scant historical precedent.
  • Expectation from some: at least one will drop sharply vs. the broad market within a few years; yet one might still be a long-term winner.
  • Broader worry: as passive investing dominates, more issuers will try to rewrite index rules and siphon risk onto passive savers before “the music stops.”