Reports that SpaceX has filed confidentially with the US Securities and Exchange Commission (SEC) for a historic US initial public offering have led to a flurry of chatter over a possible USD 2tn valuation at listing, a figure that is almost impossible to justify using traditional market math.

SpaceX reportedly recorded revenue of USD 16bn in 2025, according to Reuters.

Assuming that the valuation figures refer to SpaceX’s market capitalization, this would represent a Price/Sales multiple of around 125x.

There is no one close to this figure in the much vaunted Magnificent 7 stocks that make up the current cohort of equity trillionaires.

As of 7 April, closing share price, Nvidia had a 2025 Price/Sales multiple of 35.4x, Alphabet of 8.9x, Apple of 9x, Meta Platforms of 7.2x, Microsoft of 9.9x, Amazon of 3.1x, and Tesla of 14.3x, according to data from Fidessa, compiled by FactSet.

The combined 2025 Price/Sales ratio of the entire Mag7 is 87.8x, meaning on a trailing basis SpaceX would be more valuable than all of them put together.

Even at a more bearish valuation figure of USD 1.75tn, which has also been mooted publicly, the trailing multiple would still be 109x 2025 revenue.

While SpaceX, will price its IPO on forward numbers, early third-party revenue projections for SpaceX in 2026 don’t get close to narrowing the ratio gap.

Now, SpaceX is by its nature an investment in what investors should believe is champion of the future and therefore comparing it to mature high revenue earning Mag7 businesses is a little unfair.

But even at its IPO in 2004, Google was valued at USD 23bn, according to Dealogic, around 15.6x its trailing 2003 revenue.

On these possible numbers, SpaceX exists apart from anything else currently trading on US stock markets. It is in another galaxy, another dimension, even.

Will this matter?

Not if SpaceX and its founder Elon Musk are successful in convincing investors of SpaceX’s ability to meet its lofty and gargantuan ambitions.

To be successful at its IPO, SpaceX can’t be sold as a leader in satellite broadband and space launch technology. Investors must believe they are buying into “the” company of the future.

SpaceX must be sold as a galactic behemoth, supporting regular commercial and government space travel and the development of the leading generative artificial intelligence model powered by vast data centers in space that circumvent the vast energy challenges facing earth bound competitors.

But this is far from an easy task.

“For data centers in space to be economically viable, launch costs per kilogram would need to fall by at least an order of magnitude from today’s levels, and stay there reliably,” one investor cautioned. “SpaceX may be able to drive costs down via Starship, but there are still massive constraints: payload mass, thermal management, power generation, and maintenance in orbit.”

Even if it’s technically possible, the investor said the question is whether the cost curve can bend fast enough to compete with terrestrial data centers, which continue to get cheaper and more efficient. That crossover point could be decades away, if it arrives at all, he said.

Should Musk also go ahead to merge SpaceX with Tesla, a topic of feverish speculation already, Musk will be able to combine his electric vehicle and robotics businesses into a single futurist conglomerate.

In that vein, SpaceX’s only possible peers might be found in science fiction rather than on the Nasdaq.

“The numbers don’t make sense at all on traditional IPO metrics, but Musk is selling a dream,” an ECM banker said. “Whether people like him or not I think the general perception among investors remains he has had more successes than failures.

“That has given him an inbuilt credibility and will increase investor willingness to pay-up for SpaceX and Musk than they would for any other company executive in the world, he has a visionary aura.”

In practice, however, the eventual order book may be less about conviction and more about the mechanics behind investors trying to secure an allocation in what is set to be a highly competitive IPO.

Hedge funds will almost certainly significantly oversubscribe the deal, inflating demand well beyond the capital they intend to deploy, market participants note. This could backfire if they get more stock than they expect.

A USD 2bn fund, for example, could submit a USD 500m order in anticipation of a much smaller allocation, a second investor noted.

Even large global investors may only receive USD 200m–USD 250m of stock, limiting their ability to take meaningful positions despite headline demand, the investor said.

“A lot of the demand you’ll see in the book is inflated,” the investor added. “Funds will put in orders they know they won’t get filled just to secure a slice of the allocation.”

The deal is likely to be boosted by a significant slice of retail demand, perhaps as high as 30% of the total book, according to some reports. These investors could be helpful in looking beyond the cold hard numbers and buying into the vision SpaceX and Musk are trying to promote.

With retail included, USD 50bn or even USD 75bn as recently reported, is still a massive amount of liquidity for public markets to absorb, and demand at that scale is far more price-sensitive than many assume, a third investor noted. Last year’s Venture Global listing underscores the risk. Small floats can create early scarcity but often lead to weak aftermarket performance, the investor said.

How much stock is directed to retail participants and how much is freely tradable at listing will be a major issue surrounding the IPO and may play a key role in shaping early trading behavior and price stability.

If hedge funds are able to trim positions on an aftermarket pop, due to overallocation, the unpredictability of retail investor behavior could add to short-term volatility.

“Even if you like the story, you’re probably taking some money off the table if it’s up 20%–30% on day one,” the second investor said.

“How high can SpaceX’s valuation go?” the third investor asked. “To justify an investment, its valuation would need to double or triple. You’re effectively underwriting a USD 3tn–USD 6tn valuation, which requires extraordinary execution. Private markets can sustain those narratives, but public markets tend to impose stricter discipline when tens of billions are at stake.”

SpaceX’s IPO is also likely to have a ripple effect across broader equity markets given its sheer size.

Portfolio managers may need to reallocate capital or sell existing holdings to fund participation in the offering, particularly if order sizes run into the billions of dollars.

“If you’re putting in a 10% order on something like this, you’re talking about tens of billions of dollars,” said an ECM banker. “That money has to come from somewhere, and it’s not sitting in cash.”

This positioning could weigh on other stocks in the lead-up to pricing and might impact the ability of other large IPO candidates such as OpenAI or Anthropic to pursue listings in close succession.

SpaceX did not respond to a request for comment.