By now you've heard the news: Elon Musk plans to IPO SpaceX in July 2026 -- just a little less than six months from now. This will happen after he already:
- Conducted an insider sale of SpaceX shares valuing the company at $800 billion (in December).
- Merged his money-losing social media platform X (formerly Twitter) into his even-more-money-losing artificial intelligence company xAI (in March).
- And, most recently, merged the result of that merger with SpaceX itself (just last month).
The result? Like it or loathe it, when SpaceX IPOs later this year at its purported $1.5 trillion valuation, you'll be able to buy into Twitter, xAI (i.e., Grok), and SpaceX all at the same time.
In fact, if you want to participate in the SpaceX IPO at all, you must buy all three.
Image source: SpaceX.
Elon Musk's merger math
If you've been wondering (as I have) how SpaceX was expecting to take a company valued at $800 billion just a couple of months ago, and sell it to investors for nearly twice that sum -- $1.5 trillion -- five months from now, this might be the answer: Perhaps SpaceX itself isn't worth $1.5 trillion, but maybe SpaceX plus X plus xAI, all combined, are worth $1.5 trillion?
Elon Musk hopes you'll think they are.
So how exactly does the math work?
Let's begin at the beginning, with the merger between X and xAI in March 2025. At the time, Musk hired law firm Sullivan and Cromwell to establish fair valuations for both companies. The firm concluded that X was probably worth $33 billion, while xAI was worth $80 billion -- so $113 billion in total.
Nearly one year later, and after an eventful year for xAI, that company's board concluded that its fair value has doubled to $250 billion (as The Wall Street Journal reported last week). SpaceX's board, meanwhile, believes SpaceX is worth $1 trillion today -- up 25% from two months ago.
Thus, when xAI and SpaceX concluded their merger on Jan. 30, this was the valuation they used: SpaceX plus X plus xAI are worth $1.25 trillion combined. Viewed from that starting point, the idea of the tripartite tech giant growing to $1.5 trillion by the time the SpaceX IPO rolls around in July isn't far-fetched at all.
It would only be going up 20% in five months, after all. That's not at all unheard of in tech circles!
How much are SpaceX, X, and Grok really worth?
But that doesn't necessarily mean we must agree with this valuation.
Consider: Both before and after the mergers they've already completed, SpaceX, X, and xAI were and still are private companies. Thus, none of them have had to divulge their financial details publicly. Until an actual IPO prospectus appears, we're all guessing at how much revenue and profit the companies are generating.
That said, a lot of very smart people have spent a lot of time trying to do just that, and making the very best guesses they possibly can. What have they concluded?
According to Payload Space, SpaceX proper generated $15 billion in 2025, and will generate $23.8 billion in 2026. Reuters, citing "two people familiar with the company's results," adds that SpaceX's profit might have been as high as $8 billion last year.
xAI, meanwhile, is believed to have generated approximately $250 million in revenue over the past six reported months, and lost $2.5 billion in the process. This implies a run rate of approximately $500 million in annual revenue and $5 billion in annual losses (although both revenue and losses are growing, so these numbers might be higher).
As estimates go, this is enough to work with. Take profitable SpaceX and combine it with unprofitable xAI. By the time SpaceX IPOs as a single, combined company, you can think of it as a company with about $16 billion in revenue, $3 billion in profit, and a sales growth rate of 50%.
How to value SpaceX
What does this mean for investors in the SpaceX IPO? $1.5 trillion divided by $16 billion values SpaceX at just under 94 times trailing sales. $1.5 trillion divided by $3 billion values SpaceX stock at 500 times trailing earnings.
I personally find both those valuations a bit extreme. Unless the IPO prospectus shows numbers significantly better than what I've calculated above, I will not be investing in the SpaceX IPO.
