SpaceX IPO Fever Grips Wall Street Amid Bubble Fears

Synopsis

As Elon Musk's aerospace firm SpaceX moves closer to going public, Wall Street buzzes with anticipation. But veteran analyst Jim Cramer has pointed to the speculative bubble that has formed in the IPO market today, likening it to Cerebras Systems, the AI chip maker that made its blockbuster offering. SpaceX's private valuation hit more than $350 billion, so analysts are split on whether it's a rational investment or more of a fever in the market.

When Hype Precedes the Listing

Marcus Webb, a retail investor from Chicago, invested in an electric truck company that went public in the spring of 2021, baited by its prospect of disrupting and the early-investor attraction of a transformative company. His investment had diminished in value by more than 60% within 8 months.

In May 2025, the veteran Wall Street commentator Jim Cramer sounded the alarm about "speculative excess" in the present IPO market, which seemed to be the cautionary arc that he was appealing to in his previous discussion. He specifically referred to the imminent public listing of his own company, SpaceX, the aerospace and satellite firm started by Elon Musk, which industry sources and media reports indicate could be as soon as June 2025.

A Valuation Based on Vision

SpaceX has a place in the technology and aerospace industry which few can equal. Since its inception in 2002, the Hawthorne, California-based company has accomplished a succession of milestones that were once considered technically impossible, including successfully reusing its rockets, flying with humans on board to the International Space Station as part of NASA's Commercial Crew Programme, and the company's own disclosures show that its Starlink broadband satellite constellation is growing quickly, now serving over 4.6 million subscribers in 100 countries.

As of the end of 2024, SpaceX was trading at about $350 billion on the secondary market, per data from private securities marketplace Forge Global. If it goes ahead, it would become one of the world's most valuable private companies and a possible IPO would also be among the biggest in American market history.

SpaceX has yet to file an S-1 with the U.S. Securities and Exchange Commission (SEC), and the company hasn't issued an official public statement about a timeframe. But since early 2025, the financial news has buzzed with rumors of investors that know the ins and outs of the matter.

Cerebras Comparison: Sentiment Over Substance?

Cramer's caution comes in part as a response to the treatment of AI chipmaker Cerebras Systems, which went public late in 2024. The initial trading was marked by heavy retail and institutional buying, with the stock trading much higher on the opening day of trading, as described in a note to clients reviewed by Bloomberg by analysts at JPMorgan.

The comparison is not a random one. SpaceX is in a space infrastructure business and Cerebras is in an artificial intelligence hardware one; both have generated an extreme amount of investor interest for long-term tech stories. These stories can result in a disconnect between the visibility of the current earnings and market pricing.

In the April 2025 Global Financial Stability Report, the International Monetary Fund warned of overvalued listings in technology-related areas as a potential risk, as risk appetite in equity markets appears to be higher than usual, especially in technology-focused areas.

The Business Case: Beyond Show and Tell

But not everyone agrees with Cramer's hesitation. There are several institutional voices saying that SpaceX's revenue profile is significantly different than the typical “speculative” listing that has failed to perform well following an IPO.

In a research note dated 26 March, 2025, Morgan Stanley analysts estimated that Starlink could generate revenues of $12 billion by 2026, due to subscriber growth and enterprise contracts, including those with government entities in NATO countries.

The company also has a significant contract portfolio with NASA, with an unusual level of revenue predictability compared to a space-sector firm, including the $2.9 billion Human Landing System (HLS) contract awarded by NASA in 2021 for lunar surface missions.