OpenAI Considers Delaying IPO Until Next Year
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: Fool
- Potential IPO Delay: OpenAI is reportedly considering postponing its IPO until next year, despite having filed preliminary paperwork, which has disappointed investors eager to invest in the AI sector amid current market volatility.
- Market Volatility Impact: SpaceX's IPO has shown significant volatility, with its stock price dropping from an opening of $150 to a peak of $225 and then back to $156, raising concerns among OpenAI's advisors about the risks of going public in the current environment.
- Massive Spending and Profit Outlook: OpenAI incurred an operating loss of nearly $21 billion last year and spent about $34 billion, while projecting $13 billion in revenue for 2025 and a $20 billion annual revenue run rate, leading investors to doubt its future profitability.
- Statistical Lessons on IPO Performance: Research indicates that companies valued over $10 billion averaged a 26.5% return in their first week post-IPO, but only 3.5% a year later, suggesting that investors should brace for significant stock price volatility once OpenAI goes public.
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About SPCX
Space Exploration Technologies Corp. designs, manufactures, launches, and operates products and services built on technologies, including rockets and spacecraft. The Company's segments include Space, Connectivity, and artificial intelligence (AI). Its Space segment designs, manufactures, and launches reusable rockets to provide access to space. Its Connectivity segment operates broadband data and communications network powered by approximately 9,600 Starlink broadband and mobile satellites in Low-Earth orbit, delivering connectivity to consumer, enterprises, and government customers over 164 countries, territories, and other markets. In its AI segment, it operates a vertically integrated AI platform spanning its truth-seeking frontier model Grok, AI solutions for consumer and enterprise customers, X-its real-time information, entertainment, and free speech platform and AI computational infrastructure.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
SpaceX IPO Hype Cools, Investors Should Exercise Caution
- Stock Price Volatility: SpaceX's current market cap is approximately $2 trillion, and although the IPO hype has diminished, investors should monitor the stock's stability over the coming months, as it may face increased selling pressure leading to potential declines.
- Insider Selling Restrictions: Elon Musk is prohibited from selling his shares for 366 days post-IPO, meaning early investors' selling pressure has yet to materialize; as shares are gradually released in the coming months, the market may experience increased sell-offs, further depressing the stock price.
- Debt Risk Warning: Shortly after its IPO, SpaceX issued $25 billion in debt, raising concerns about its financial health despite having raised over $85 billion through the public offering, which could impact future investment returns and investor confidence.
- Investor Patience Recommended: Analysts suggest that the likelihood of SpaceX's stock declining in the short term outweighs the chances of a surge, advising investors to remain patient and observe the company's performance as a public entity while considering other high-potential stocks for better growth opportunities.
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- Market Potential: The global space launch market is projected to grow from over $20 billion this year to more than $70 billion by 2035, and with Iridium's technology, Rocket Lab is positioned to capture a significant share of this rapidly expanding market.
- Technological Synergy: Rocket Lab's Electron rocket has successfully launched over 260 satellites, and Iridium's communication and positioning solutions will allow it to meet a broader range of customer needs, enhancing the attractiveness of its product offerings.
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Analysis of SpaceX Stock Volatility Post-IPO
- Post-IPO Volatility: Following its IPO, SpaceX's stock price exhibited extreme volatility, soaring from the initial price of $135 to over $200, before dropping to around $150, indicating high market uncertainty regarding its valuation.
- Supply-Demand Imbalance: The IPO sold less than 5% of total outstanding shares, significantly lower than the typical 80% for major companies, creating a scarcity that exacerbated price fluctuations due to supply-demand imbalances.
- Wall Street Analyst Predictions: Currently, only seven analysts cover SpaceX stock, with an average price target of $222, suggesting about 30% upside from current levels, but estimates vary widely from $115 to $400, reflecting significant disagreement on future performance.
- Morningstar Independent Assessment: A report from Morningstar prior to the IPO valued SpaceX at only $63 per share, highlighting substantial engineering challenges in achieving reusable rockets and commercializing space data centers, which are not expected to be resolved until at least 2028.
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SpaceX Stock Volatility and Analyst Insights
- Post-IPO Volatility: SpaceX sold less than 5% of its shares during its IPO, leading to significant market volatility as the stock surged from $135 to over $200 before plummeting to around $150, indicating a severe supply-demand imbalance.
- Divergent Analyst Expectations: Currently, only seven Wall Street analysts cover SpaceX, with an average 12-month price target of $222, suggesting about 30% upside, while the lowest estimate is around $115, highlighting significant disagreement in market outlook.
- Morningstar Valuation: Morningstar's pre-IPO analysis valued SpaceX at just $63 per share, nearly two-thirds lower than the current price, cautioning investors to be wary of overly optimistic market sentiments given unresolved engineering challenges.
- Cautious Investment Advice: Although SpaceX's stock has rebounded above $170, the Motley Fool's analyst team did not include it in their top investment picks, urging investors to conduct thorough research and avoid blindly following market trends.
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Analysis of SpaceX's Performance Post-IPO
- Revenue and Profitability: SpaceX reported nearly $18.7 billion in total revenue for 2025, with the connectivity segment (Starlink satellite network) generating $11.4 billion and an operating profit of $4.4 billion, indicating strong performance in this area.
- Capital Expenditure Pressure: Despite the solid performance of the connectivity segment, the other two divisions are deep in the red, particularly the AI unit, which reported $3.2 billion in revenue but an operating loss of $6.4 billion, highlighting the overall capital expenditure strain on the company.
- Market Performance and Investor Sentiment: With a market cap of $2.1 trillion and a current stock price of $162, despite a short-term increase of 2.83%, investor confidence in the company's future profitability remains cautious, potentially leading some investors to exit.
- Future Outlook and Risks: Although Starlink and the AI unit secured a $1.25 billion monthly contract, the substantial capital expenditures may result in ongoing net losses for investors in the coming years, diminishing interest in the company's stock.
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SpaceX IPO Hype Cools, Investors Should Exercise Caution
- Stock Price Volatility: SpaceX's current market cap is approximately $2 trillion, and although the IPO hype has diminished, investors should monitor the stock's stability over the coming months, as it may face increased selling pressure leading to potential declines.
- Insider Selling Restrictions: Elon Musk is prohibited from selling his shares for 366 days post-IPO, meaning early investors' selling pressure has yet to materialize; as shares are gradually released in the coming months, the market may experience increased sell-offs, further depressing the stock price.
- Debt Risk Warning: Shortly after its IPO, SpaceX issued $25 billion in debt, raising concerns about its financial health despite having raised over $85 billion through the public offering, which could impact future investment returns and investor confidence.
- Investor Patience Recommended: Analysts suggest that the likelihood of SpaceX's stock declining in the short term outweighs the chances of a surge, advising investors to remain patient and observe the company's performance as a public entity while considering other high-potential stocks for better growth opportunities.
See More
Rocket Lab Announces $8 Billion Acquisition of Iridium
- Acquisition Announcement: Rocket Lab has announced plans to acquire Iridium Communications for $8 billion, which will enable Rocket Lab to integrate satellite launch and communication solutions, thereby enhancing its market competitiveness.
- Market Potential: The global space launch market is projected to grow from over $20 billion this year to more than $70 billion by 2035, and with Iridium's technology, Rocket Lab is positioned to capture a significant share of this rapidly expanding market.
- Technological Synergy: Rocket Lab's Electron rocket has successfully launched over 260 satellites, and Iridium's communication and positioning solutions will allow it to meet a broader range of customer needs, enhancing the attractiveness of its product offerings.
- Strategic Implications: This acquisition not only boosts Rocket Lab's technological capabilities but may also position it as the sole provider capable of meeting specific market demands, thereby gaining a larger market share in the competitive aerospace industry.
See More
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- Fed Leadership Change: Jerome Powell's term ended on May 15, with Trump's nominee Kevin Warsh officially taking over as Fed Chair, indicating a potential shift in monetary policy direction, particularly regarding interest rates.
- Trump's Rate Pressure: Trump continues to push for rate cuts, despite the Fed lowering the federal funds target rate six times between 2024 and 2025; the current rate of 3.5% to 3.75% remains above Trump's desired target of 1%, highlighting a significant policy divergence.
- Inflation Challenges: Due to tariffs imposed by Trump and the energy supply disruption from the Iran war, U.S. inflation surged from 2.4% to 4.2% over 12 months, placing increased pressure on Warsh to maintain price stability, which could influence future monetary policy decisions.
- Market Uncertainty Intensifies: Warsh's hawkish stance contrasts sharply with Trump's calls for lower rates, and the lack of monetary policy transparency may lead to greater risks for Wall Street, especially given the current high valuations in the stock market.
See More
Analysis of SpaceX Stock Volatility Post-IPO
- Post-IPO Volatility: Following its IPO, SpaceX's stock price exhibited extreme volatility, soaring from the initial price of $135 to over $200, before dropping to around $150, indicating high market uncertainty regarding its valuation.
- Supply-Demand Imbalance: The IPO sold less than 5% of total outstanding shares, significantly lower than the typical 80% for major companies, creating a scarcity that exacerbated price fluctuations due to supply-demand imbalances.
- Wall Street Analyst Predictions: Currently, only seven analysts cover SpaceX stock, with an average price target of $222, suggesting about 30% upside from current levels, but estimates vary widely from $115 to $400, reflecting significant disagreement on future performance.
- Morningstar Independent Assessment: A report from Morningstar prior to the IPO valued SpaceX at only $63 per share, highlighting substantial engineering challenges in achieving reusable rockets and commercializing space data centers, which are not expected to be resolved until at least 2028.
See More
SpaceX Stock Volatility and Analyst Insights
- Post-IPO Volatility: SpaceX sold less than 5% of its shares during its IPO, leading to significant market volatility as the stock surged from $135 to over $200 before plummeting to around $150, indicating a severe supply-demand imbalance.
- Divergent Analyst Expectations: Currently, only seven Wall Street analysts cover SpaceX, with an average 12-month price target of $222, suggesting about 30% upside, while the lowest estimate is around $115, highlighting significant disagreement in market outlook.
- Morningstar Valuation: Morningstar's pre-IPO analysis valued SpaceX at just $63 per share, nearly two-thirds lower than the current price, cautioning investors to be wary of overly optimistic market sentiments given unresolved engineering challenges.
- Cautious Investment Advice: Although SpaceX's stock has rebounded above $170, the Motley Fool's analyst team did not include it in their top investment picks, urging investors to conduct thorough research and avoid blindly following market trends.
See More
Analysis of SpaceX's Performance Post-IPO
- Revenue and Profitability: SpaceX reported nearly $18.7 billion in total revenue for 2025, with the connectivity segment (Starlink satellite network) generating $11.4 billion and an operating profit of $4.4 billion, indicating strong performance in this area.
- Capital Expenditure Pressure: Despite the solid performance of the connectivity segment, the other two divisions are deep in the red, particularly the AI unit, which reported $3.2 billion in revenue but an operating loss of $6.4 billion, highlighting the overall capital expenditure strain on the company.
- Market Performance and Investor Sentiment: With a market cap of $2.1 trillion and a current stock price of $162, despite a short-term increase of 2.83%, investor confidence in the company's future profitability remains cautious, potentially leading some investors to exit.
- Future Outlook and Risks: Although Starlink and the AI unit secured a $1.25 billion monthly contract, the substantial capital expenditures may result in ongoing net losses for investors in the coming years, diminishing interest in the company's stock.
See More
