What does SpaceX’s sky-high valuation mean? It would require 600-fold growth in ten years, with an average annual revenue growth rate of 50%.

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The news about SpaceX's upcoming IPO continues to ferment. According to the plan, Elon Musk’s space and AI company will be listed on Nasdaq on June 12, with a valuation of approximately $1.75 trillion, making it the highest-valued IPO in history.

But behind this figure lies an extremely demanding arithmetic problem.

According to a Fortune Magazine report on June 6, David Trainer, CEO of research institution New Constructs, used a Discounted Cash Flow (DCF) model for some calculations: if investors wish to get about a 10% annualized return over the next ten years—which is already a fairly conservative expectation—then SpaceX would need to reach $1.1 trillion in revenue by 2035.

What does $1.1 trillion mean? Currently, the company with the highest revenue in the US is Amazon, with sales of $742 billion over the past four quarters. SpaceX would need to surpass this number by nearly 50%.

What is SpaceX's current revenue? In 2025, it will be only $18.7 billion, while losing $4.9 billion.

From $18.7 billion to $1.1 trillion, that’s about a 600-fold increase, with only a ten-year window.

50% annual growth, for ten consecutive years

To achieve this growth curve, SpaceX needs to maintain an average annual revenue growth rate of about 50% for ten consecutive years.

How difficult is this? A comparison can be made.

Nvidia is one of the fastest-growing tech companies globally in recent years. From 2024 to 2025, Nvidia added about $85 billion in revenue in a single year, already astonishing the market.

But according to the above calculation path, SpaceX would need to add about $360 billion in revenue in the last year alone (from 2034 to 2035)—more than four times Nvidia’s increase in that year.

Fortune Magazine points out that this single-year increment is equivalent to Amazon’s total revenue increase over the past six years.

Trainer directly notes in his analysis: such a growth speed has no precedent in history.

What does $1.1 trillion mean: equivalent to 2.4% of US GDP

Let’s understand this figure on another scale.

The US Congressional Budget Office (CBO) predicts that America’s GDP will be about $46.7 trillion in 2035. If SpaceX reaches $1.1 trillion in revenue then, it will account for 2.4% of US GDP.

What does this mean?

According to Fortune’s calculations, by then SpaceX’s revenue scale alone will be equivalent to 1.5 times the US entire utilities sector, 55% of the entertainment industry, and nearly three-quarters of the entire US transportation sector, including aviation, rail, trucking, and logistics—which covers dozens of giants like Delta Air Lines, CSX, FedEx, etc.

Trainer’s judgment is: a big market can indeed support big growth, but it will also attract plenty of competitors. Alphabet, Microsoft, Nvidia, OpenAI, and others are all competing for a share of the AI market, "not everyone can take several percentage points of GDP."

SpaceX’s S-1 filing mentions that its addressable AI market size is close to $30 trillion. But the bigger the market, the more competition, and ultimately each company’s share is often far less than expected.

The core contradiction in the valuation logic

There is a structural issue here worth noticing.

The 10% annualized return expectation set in Trainer’s model is already very conservative. Normally, investors require higher returns for high-risk, high-uncertainty growth stocks to compensate for the risk.

In other words, if a more reasonable risk premium is used to reset return expectations, the revenue target SpaceX needs to reach would be even higher, not lower.

Fortune Magazine concludes: SpaceX is not only the largest and most watched IPO in history, but also "the most expensive priced one so far."

Risk Warning and DisclaimerThe market has risks, and investment needs caution. This article does not constitute personal investment advice and does not take into account the special investment objectives, financial circumstances or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investments made based on this article are at their own risk. ```