SpaceX Is Going Public: Here's the 1 Thing the Company Must Get Right to Justify a $1.5 Trillion Valuation

SpaceX submitted its S-1 filing ahead of a potential IPO, merging its operations with Elon Musk’s AI company xAI and X (formerly Twitter) under a single entity. The filing breaks down revenue for three segments—Space, Connectivity (Starlink), and AI—for 2025 and early 2026, showing Connectivity as the only profitable division with $11.4 billion in revenue and a 49.8% growth rate. The Space segment lost $657 million in 2025, while AI, which includes X’s ad revenue and xAI’s Grok models, reported $3.2 billion in revenue but a $6.4 billion net loss, with first-quarter 2026 revenue flatlining. Starlink’s growth is the bright spot, but its $11.4 billion in revenue would need to justify a $1.5 trillion valuation—equivalent to 131 times sales—which analysts deem unrealistic. The AI segment faces scrutiny due to stagnant revenue and xAI’s reliance on renting capacity to competitors like Anthropic for $1.25 billion monthly, adding $15 billion annually but with unclear profitability. SpaceX projects $28.5 trillion in total addressable market potential, with 93% tied to AI enterprise applications, though current financials raise doubts about achieving those ambitions. The filing highlights X’s ad revenue decline from $5.1 billion in 2021 to $3.4 billion in 2023, while xAI’s Grok models lag behind competitors like Anthropic, which hit a $30 billion annualized revenue run rate. SpaceX’s first-quarter 2026 revenue for Space dropped below $1 billion, though seasonality may play a role. The company’s ability to turn around unprofitable segments—especially AI—will determine whether the IPO valuation holds, given current financial struggles and heavy dependence on Starlink for profitability.