SpaceX prepares for the biggest stock market entry in history.

Elon Musk's space venture starts trading on the Nasdaq this Friday using the symbol SPCX. Shares were set at $135 apiece, generating $75 billion in proceeds and placing the firm at a $1.75 trillion market value in the largest public offering to date.

The transaction would easily surpass Saudi Aramco's earlier mark of $29.4 billion from 2019, which grew later via an extra share option.

SpaceX actively courted individual buyers, including those across Europe. Bloomberg reported that retail participants submitted around $100 billion in bids via platforms such as Robinhood, Fidelity and SoFi throughout the IPO phase.

This interest alone topped the firm's $75 billion capital goal, highlighting strong enthusiasm from smaller buyers ahead of the listing.

Despite the excitement, several caution signals stand out. Below are five risks investors should evaluate before trading begins.

1. Does SpaceX justify a $1.75 trillion price tag?

At $1.75 trillion, buyers would be assigning SpaceX a multiple near 94 times its yearly sales of $18.7 billion recorded for 2025. For context, Nvidia, among the priciest tech names, trades at under one-fourth that ratio.

Morningstar, which assigns the firm a $780 billion fair value, labeled the price "significantly overvalued," while Goldman Sachs figures indicate the share price would need sales exceeding $100 billion by 2030, pointing to annual growth above 40 percent.

Past patterns provide perspective. Studies from University of Florida professor Jay Ritter, known as "Mr IPO," showed that offerings from 2012 to 2021 gained 23.6 percent on average on day one yet delivered only 10.6 percent across the next three years.

2. Quick index entry and a narrow share supply

SpaceX's anticipated addition to major benchmarks has sparked debate. Officials from four large US states asked Nasdaq and FTSE Russell to justify recent policy shifts that might speed up inclusion in popular indexes.

Opponents claim the adjustments could draw passive funds into an expensive stock earlier than planned, whereas the providers maintain the updates align with evolving market conditions.

The issue is relevant because only a small slice of SpaceX equity will trade at first. Though valued at $1.75 trillion, roughly 3 percent to 4 percent of shares will be offered publicly at launch.

Consequently, the market price will rest on activity in a limited portion of total equity. More than 75 percent of the $75 billion raise reportedly went to current holders and insiders, reducing the open-market supply.

Morningstar notes the tight float and interest in AI themes could buoy the price early on, even above its estimated fair value. A fuller view of demand may appear once lock-up periods end and additional shares enter circulation.

Some observers expect the limited supply to keep supporting the stock. Projections indicate $22 billion to $27 billion in passive inflows could arrive once SpaceX joins the Nasdaq 100, adding demand from index funds.

3. Losses instead of earnings

SpaceX's results may also prompt second thoughts.

The prospectus reveals rapid expansion alongside continued shortfalls.

The firm runs the Starlink satellite service, which produces most revenue and remains its sole profitable segment. It also controls the AI firm xAI, which combined with SpaceX in February.

The filing lists an accumulated shortfall of $41.3 billion as of 31 March and a quarterly net loss of $4.27 billion in the first quarter of 2026.

That compares with a $528 million loss in the same quarter a year earlier.

A large share of the recent deficit traces to xAI. The filing shows the AI unit posted an operating loss near $6.4 billion in 2025 and continued heavy spending early in 2026 to grow its infrastructure.

Morningstar views the AI division as "a material threat of value destruction," observing that Grok has not captured significant share against competing models.

Backers maintain the shortfalls reflect deliberate spending rather than a core weakness.

Revenue rose 33 percent to $18.7 billion in 2025 from $14.1 billion the prior year. The core launch and satellite operations turned a profit as recently as 2024. The shortfalls largely stem from AI build-out, which supporters say is already generating offsetting compute revenue.

4. The AI expansion wager

Advocates contend buyers are paying for expected expansion rather than present earnings.

Starlink stays the primary revenue driver, while the AI segment is projected to grow in importance. Optimists highlight SpaceX's leading role in launches and satellite links, positioning it to capture rising demand for connectivity, compute and AI facilities.

SpaceX performs more orbital missions yearly than all other providers combined and serves over nine million Starlink users, yet its newest growth area is the AI data-center capacity gained via the xAI merger.

Last Friday, Google committed to paying SpaceX $920 million monthly for compute access at xAI centers under a 32-month agreement running from October 2026 to June 2029 and covering roughly 110,000 Nvidia GPUs.

That followed a May pact in which Anthropic pays $1.25 billion monthly to use the full output of the Colossus 1 center through May 2029, bringing combined annualized compute revenue near $26 billion.

Supporters say this contracted revenue, secured in under four months, demonstrates rapid monetization potential. Critics note both deals include 90-day exit options after December 2026 and that Google described the arrangement as temporary bridge capacity.

5. The Elon Musk factor

SpaceX's prospects remain tightly linked to Elon Musk, whose visibility and history have drawn investors, clients and partners. This creates classic key-person exposure regarding performance if he steps away.

The governance setup deepens that reliance. Musk's Class B shares deliver roughly 85 percent of voting rights, leaving outside owners minimal sway over major choices. In effect, only Musk can decide his continued role as chief executive.

Critics also cite SpaceX's Texas base, where only holders of at least 3 percent of shares may file derivative suits. Danish pension fund AkademikerPension has excluded the stock, calling the setup "catastrophic."

Supporters note dual-class structures are standard at US tech companies such as Meta and Alphabet. Concentrated control, they argue, lets founders pursue extended objectives free from short-term pressures.

Musk's profile also introduces political exposure. Senator Elizabeth Warren has called on the SEC to review the listing, warning that index inclusion could place millions of passive investors in the stock without their direct selection.

Others observe the SEC finished its review ahead of schedule, permitting the IPO to proceed without delay and indicating regulators see no immediate barrier.

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