Aswath Damodaran, finance professor at New York University—often referred to as the "dean of valuation"—published a detailed assessment following SpaceX’s Nasdaq debut on Thursday. Whereas the market priced the company at roughly $1.77 trillion at listing, Damodaran estimates its intrinsic value at $1.25–$1.35 trillion.
In his analysis of the company’s recently released offering materials, he emphasized that he approaches these questions as an investor focused on fundamentals rather than as a trader swayed by market momentum. He did note, however, that the near-$1.8 trillion listing price is not without precedent: as a private company a few months earlier SpaceX had been valued at about $1.2 trillion.
Three business lines: launches, Starlink and xAI
Damodaran examined SpaceX’s three main businesses—the space operations (rockets and launches), the Starlink satellite internet service, and the xAI artificial intelligence division. He found that in 2025 Starlink was clearly the company’s driver in both revenue and profitability.
By contrast, the AI business is the largest source of uncertainty. While it offers the greatest growth potential, it is also the weakest structurally: among the three segments it showed the lowest gross margins in 2025. Damodaran pointed out that intense competition among large language models and rising production costs for AI products further depressed margins that year, even as the AI segment requires the largest capital investments.
A risky bet on AI and Elon Musk
Damodaran characterized buying SpaceX at the current market price as a significant bet on xAI and on Elon Musk. He also warned that Musk-led companies inevitably carry large, disruptive swings—an onslaught of good and bad developments arriving at high speed—and that investors in SpaceX effectively buy that package.
He did not rule out the possibility that the market will eventually correct the stock. As historical examples he cited Meta Platforms (Facebook), whose share price fell to about half the IPO price within months of debut, and Uber, which lost more than half its market value within a year of listing.
Conclusion
Damodaran’s review suggests SpaceX’s fundamental value could be lower than its initial public valuation. The greatest risks stem from the xAI business—low gross margins, increasing costs and heavy capital needs—while Starlink appears to have been the main contributor to 2025 revenue and profitability.
This article is not investment advice or a recommendation.
(Source: CNBC — analysis by Aswath Damodaran.)
