New York University finance professor Aswath Damodaran understands why some people are getting ready to pay up for SpaceX, but he says “it is too richly priced for my tastes.” Damodaran shared his valuation analysis in his blog as Elon Musk ‘s company prepares for its blockbuster public market debut this week. While SpaceX is targeting a $135 price , which puts its value at $1.77 trillion, Damodaran’s assessment values the company at between $1.25 trillion and $1.35 trillion. While some call that lofty valuation hype , others are looking at the numbers. The professor, who is often referred to as the “Dean of Valuation,” falls in the second category. Damodaran combed through the recently released SpaceX prospectus to reach his conclusion, but he also admits he is “more investor than trader” as he prefers to buy stocks based on valuation rather than market momentum. In an interview with CNBC on Thursday, Damodaran said pricing SpaceX’s initial public offering at nearly $1.8 trillion is justified because it was already valued at $1.2 trillion a few months ago as a private company. However, from a valuation perspective, investors need to ask questions about its businesses, he said. SpaceX’s biggest wild card SpaceX has three primary businesses: space (rockets and launches), connectivity (Starlink) and artificial intelligence (xAI). While space launches and connectivity are great in terms of unit economics and their competitive advantages, it’s the AI business that’s the biggest wild card, Damodaran said. While it offers the greatest upside, it also has the weakest unit economics, intense competition and the highest capital expenditures of SpaceX’s businesses. “If you are okay with that, then go with the $1.8 trillion. But if not, then you are in trouble,” he said during the “Closing Bell” interview. In his blog, Damodaran broke down the numbers of these businesses, which clearly reflect that Starlink carried the company in 2025. When it comes to profitability, the AI business does not only have the lowest gross margins of the three units, but margins deteriorated in 2025 amid intense competition from other large language models and the rising cost of delivering AI products and services, he said. A loaded bet on AI and Musk Although SpaceX is a “unique, cutting-edge business,” an investment in the company at this price is a loaded bet on AI and Elon Musk, Damodaran said. This doesn’t mean he would never buy SpaceX stock since the market changes its mind, he explained. In the past, companies have moved from over to undervalued including Facebook , a stock that was sold at half its offering price a few months after its IPO, and Uber , which lost more than 50% of its market cap in the year after its debut. Damodaran also doesn’t rule out Musk’s history when it comes to delivering. In his interview with CNBC, he said with any Musk-run company comes “huge distractions” along the way. “Good stuff and bad stuff coming at you at hyper speed,” he said. “If you invest in SpaceX, it’s not fair complaining about that. It comes as a package.” SpaceX plans to debut at the Nasdaq on June 12.
