SpaceX Stock Could Soar to $5 Trillion on IPO Day, According to a Wall Street Expert

SpaceX is set to launch its initial public offering (IPO) on June 12, listing on Nasdaq under the ticker SPCX at $135 per share, targeting a $1.77 trillion market capitalization. Analyst Jim Cramer forecasts the stock could jump 180% on its first trading day, potentially reaching a $5 trillion valuation, driven by high demand and limited available shares. However, Morningstar analysts value SpaceX at $780 billion, a 56% decline from its IPO market value. The IPO aims to raise a record $75 billion, nearly triple Saudi Aramco’s 2019 record of $26 billion. With institutional investors holding only 3.9% of portfolios in cash—near historic lows—and high-net-worth individuals at less than 10%, demand for SpaceX shares may force investors to sell other stocks to fund participation. Cramer warns this could pressure major holdings like Amazon, Microsoft, and Nvidia, which together make up 17% of the S&P 500. SpaceX plans to sell 555,555,555 shares at $135 each, but its float will represent just a fraction of its $1.77 trillion valuation. Historically, IPOs underperform the broader market over the long term, raising questions about whether SpaceX’s valuation will sustain momentum. The company’s high-profile status and Elon Musk’s influence may drive short-term hype, but fundamentals like revenue and profitability remain key factors for long-term performance. Institutional investors face a dilemma: either raise cash by selling existing holdings or miss out on SpaceX’s IPO. The potential selling pressure on major tech stocks could create volatility in the market, particularly if demand for SpaceX shares outpaces supply. Analysts suggest monitoring how institutional portfolios adjust to accommodate the IPO, as forced liquidations could impact broader market trends. The IPO’s success hinges on whether investors view SpaceX as a transformative asset despite its unproven public-market track record. While Cramer’s optimism highlights potential upside, the company’s valuation contrasts sharply with Morningstar’s more conservative estimate, signaling potential risks. Investors will closely watch trading activity on June 12 to gauge whether SpaceX’s debut lives up to expectations or faces early challenges.