SpaceX's upcoming initial public offering will be shaped more by the limited number of shares available for public trading than by its eye-catching $1.77 trillion valuation. Gene Munster, managing partner and co-founder of Deepwater Asset Management, argues that the $75 billion primary stock sale represents the more critical metric for understanding how the rocket company will perform in its first month as a public company.

What Makes SpaceX's IPO Structure Unique?

SpaceX has set its IPO price at $135 per share, positioning itself to become the largest initial public offering on record if completed as planned, surpassing Saudi Aramco's 2019 listing. However, the headline valuation tells only part of the story. Munster explained that the structure of the offering creates what investors call a "limited float," meaning fewer shares will be available for everyday traders to buy and sell in the open market.

The primary raise could expand to approximately $86 billion if underwriters exercise overallotment options, further concentrating share availability. This tight supply, combined with what analysts expect to be intense demand from institutional and retail investors, creates conditions for what's known as an IPO "pop," a sharp price increase in the immediate aftermath of the public listing.

"When discussing how SpaceX will trade in the month after its IPO, the $1.77T valuation is less important," stated Gene Munster.

Gene Munster, Managing Partner and Co-Founder of Deepwater Asset Management

How Should Long-Term Investors Think About SpaceX?

Beyond the immediate trading dynamics, Munster frames SpaceX as a "core tech holding" for investors with longer time horizons. He describes Elon Musk as a "generational founder" and argues there "should be little debate" about owning the stock for those building diversified technology portfolios.

Munster's bullish stance rests on SpaceX's unique position in what he calls "sovereign artificial intelligence" infrastructure. Unlike traditional technology rivals, SpaceX controls multiple layers of a closed-loop system that competitors cannot easily replicate.

• Hardware Control: SpaceX manufactures proprietary chips and rockets, giving it direct command over the physical infrastructure that powers its operations.
• Software Integration: The company operates Grok, an artificial intelligence system that processes data and makes decisions within the SpaceX ecosystem.
• Distribution Network: Starlink, SpaceX's satellite internet service, provides the connectivity layer that ties hardware and software together globally.
• Reusable Rocket Technology: SpaceX's ability to land and reuse rockets reduces costs and increases launch frequency, creating a sustainable competitive moat.

This integrated approach stands in sharp contrast to traditional tech companies that rely on external suppliers for chips, cloud infrastructure, or connectivity services.

What Do Market Participants Expect From the IPO?

Wedbush analyst Dan Ives called the SpaceX listing a "watershed moment," describing it as the first major test for public markets after years of muted initial public offering activity. The successful launch of SpaceX could pave the way for other high-profile artificial intelligence companies, including Anthropic and OpenAI, to pursue public listings of their own.

Traders on Polymarket, a prediction market platform, are betting heavily on SpaceX's post-IPO performance. They assigned a 75 percent chance that SpaceX's market value would exceed $2 trillion after the IPO and a 90 percent chance it would surpass $1.8 trillion.

Not all observers share this optimism. According to a Reuters report, Morningstar has argued that SpaceX may be worth significantly less than market expectations, citing uncertainty about future revenue streams from artificial intelligence and space computing applications. This disagreement highlights the challenge of valuing a company with multiple revenue sources and ambitious long-term goals.

The SpaceX IPO will test whether investors are willing to pay premium valuations for companies that control integrated technology ecosystems and have visionary leadership. The answer will likely influence how the market values other ambitious technology ventures in the years ahead.