SpaceX Is Set to Tease Macrohard to Analysts on April 23. Mark Your Calendars.

The narrative around SpaceX is taking some interesting turns this week, and it's not because of headlines. The company has organized a series of closed-door analyst briefings, covering everything from their Starbase production plant to the mysterious Macrohard AI ambitions. This is not your everyday pre-IPO narrative construction.

Meanwhile, financial markets have already started pricing the expected SpaceX IPO, setting the target valuation for the firm around $1.75 trillion. At first glance, that may sound like madness. Yet a closer look reveals the reasons behind the seemingly insane valuation assumptions.

About SpaceX Stock

The SpaceX business model is based on the two main pillars of launching infrastructure and Starlink satellite internet. Based in Hawthorne, CA, the company has become both a major launch vehicle supplier and consumer-facing Internet infrastructure provider. If the $1.75 trillion valuation materializes, the company will be instantly placed among the most valuable companies in the market.

Compared to traditional aerospace firms, the growth path of SpaceX appears much steeper. While the growth rate is typically in the single digits for traditional companies, SpaceX was able to scale revenues to $15-16 billion with ~$8 billion EBITDA. Hence, gross profit margins are around 50%.

When it comes to SpaceX's valuation, we should expect it to be extremely stretched. The assumption of a $1.75 trillion valuation implies around 220x EV/EBITDA. In comparison to the average EV/EBITDA ratio of around 24x in the aerospace industry, SpaceX will significantly deviate from the norm.

Despite such lofty valuations, the SpaceX would still trade with relatively high multiples even accounting for growth potential. Until the end of the decade, the company's EV/EBITDA might remain above 100x. However, that does not necessarily mean that the valuation is fundamentally wrong – simply overly ambitious.

SpaceX's Transition to AI Infrastructure Changes the Story

Here's the thing – SpaceX is no longer just a "space" company. With xAI and Macrohard project, the company is moving to the position of a mixed player, operating infrastructure and providing AI technology solutions.

The main idea behind Macrohard is straightforward – SpaceX wants to develop an infrastructure capable of replacing conventional software ecosystem with pure AI solutions. The plan implies the development of the colossus data center along with the ability to use large-scale GPU-based training systems in orbit. The result is SpaceX becoming a competitor to major AI providers, rather than the usual space firm.

However, there's a catch. The economic sense of AI development in orbit remains questionable. Given the current constraints in the cost structure of space facilities and energy efficiency, terrestrial infrastructure appears much more convenient. So despite the impressive vision, the immediate contribution remains mostly conceptual.

IPO Will Lift Up the Whole Aerospace Industry

Another point worth highlighting here is related to market dynamics. Globally, the aerospace & defense industry is valued at around $3.2 trillion. Therefore, adding a $1.75 trillion company to this mix creates some distortions. Practically, SpaceX alone accounts for more than 50% of the total industry value. As a consequence, peers' valuations should follow and be re-rated, too.

For example, previously viewed as expensive, space-oriented aerospace firms might appear reasonably valued against SpaceX. And pure-play space names can enjoy significant inflows due to thematic investment. There is also psychological impact when once private giants become publicly traded.

The upcoming IPO is more complex than just a launch of a highly valuable firm. The company's analyst briefings should not be overlooked as the process of constructing the valuation framework and narrative begins. Thus, depending on the outcome of discussions, SpaceX may achieve higher multiples in the stock market or face increasing scrutiny over its valuation assumptions.

Overall, it is an extremely important moment in time as a single firm's listing is capable of redefining industry multiples. And such opportunities rarely occur.