WHAT ARE THE RISKS?
The main risk is that SpaceX may not grow fast enough to justify its valuation.
The company has been loss-making so far – reporting a net loss of US$4.9 billion in 2025, and another US$4.3 billion in the first quarter of 2026.
SpaceX also said in its IPO prospectus it does not expect to be profitable any time soon.
To justify its valuation, SpaceX must grow its revenues enormously and have large profit margins, Prof Ritter told CNA.
While he acknowledged Starlink’s service would probably grow and be a big future source of profits, he noted that SpaceX’s other goals were a different matter.
“Putting data centres into space is subject to a lot of uncertainties about whether this can be done,” he added.
“And sending people to Mars is unlikely to be profitable,” Prof Ritter said.
Morningstar gave SpaceX a “very high” uncertainty rating based on the company’s future financial outcomes.
It flagged substantial risk areas, including strategic execution, technological evolution and AI buildout.
Potential future revenue streams, such as orbital data centres, as well as Starlink’s long-term scalability, face significant technological uncertainties, Morningstar noted.
Long-term investors looking for a safer risk margin could wait out the hype, according to Morningstar’s analysts.
While there may be strong investor demand immediately after SpaceX’s IPO, the stock could face downward pressure in the following months as early investors and employees become eligible to sell their shares, they noted.
This could give long-term investors the chance to buy the shares at a lower-risk price, the analysts said.