Concerns Mount Over SpaceX's IPO Prospects
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 27 2026
0mins
Source: Fool
- Valuation Concerns: SpaceX's planned IPO at a $2 trillion valuation could make it the largest public debut in history, yet this valuation lacks solid business fundamentals, potentially leading to poor stock performance post-IPO.
- Revenue and Expense Imbalance: In 2025, SpaceX's revenue grew 33% year-over-year to $18.7 billion, but skyrocketing R&D expenses caused operating income to plummet from a positive $466 million to a loss of $2.6 billion, indicating deteriorating financial health.
- Severe AI Losses: The S-1 filing reveals that SpaceX's AI segment incurred an operating loss of $6.36 billion in 2025, and the acquisition of xAI may exacerbate cash burn, placing further financial strain on the company.
- Intensifying Market Competition: While the partnership with Anthropic offers short-term revenue opportunities, SpaceX's AI capabilities may be constrained by lack of demand, facing fierce competition from hyperscalers like Amazon, raising concerns about its future growth prospects.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 241.510
Low
175.00
Averages
280.01
High
325.00
Current: 241.510
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
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.
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- Retail Investor Allocation: Initially aiming to allocate 30% of shares to retail investors, SpaceX reduced this to the low 20% range due to high institutional demand, still providing a significant opportunity for retail investors who typically access only 5% to 10% of IPO shares.
- Rapid Nasdaq Inclusion: SpaceX is poised to enter the Nasdaq-100 index within just 15 trading days post-IPO, needing a market cap of about $121 billion, which will create additional demand for its shares and attract more investor attention.
- Capital Expenditure and Profit Pressure: Despite notable achievements in rocket launches and Starlink satellite services, SpaceX's capital expenditures in AI reached $12 billion last year, leading to a $4.9 billion loss, highlighting the profitability challenges it faces while pursuing aggressive growth strategies.
See More
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- Stock Price Surge: Following reports of potential merger talks, Roku's stock soared 20% on Friday and continued to rise in after-hours trading, reflecting market optimism regarding its future strategic direction.
- Analyst Ratings Positive: According to Koyfin, 25 out of 29 analysts have rated Roku as a 'Buy', demonstrating strong confidence in its growth potential and merger opportunities.
- Intense Competitive Landscape: Roku is exploring merger possibilities amid fierce competition with traditional entertainment firms and tech giants, although discussions remain preliminary with no final decisions made yet.
See More
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- AI Infrastructure Investment: By 2026, the four major AI hyperscalers are expected to spend a record $650 billion on data center capital expenditures, with this figure projected to reach $1 trillion in 2024, indicating strong demand for cloud computing that will drive long-term growth potential for companies like Nvidia.
- Nvidia's Market Outlook: As a GPU manufacturer, Nvidia anticipates global data center capital expenditures will reach $3 trillion to $4 trillion by 2030, and with the increasing need for replacement of aging equipment, Nvidia is set to secure a continuous revenue stream, solidifying its market position.
- Dual Role of Cloud Computing: Amazon and Microsoft leverage their cloud platforms (AWS and Azure) not only to provide infrastructure for AI companies but also to ensure stable subscription revenues through usage-based pricing, with significant growth expected in the coming years.
- Long-Term Investment Strategy: Amazon and Microsoft are investing hundreds of billions in capital expenditures, and while the short-term spending is substantial, these investments will lay the groundwork for future growth, encouraging investors to maintain a long-term perspective for higher returns.
See More
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- Market Enthusiasm: SpaceX's IPO closed at $161 per share, giving it a market value of approximately $2.1 trillion, capturing significant attention from both Wall Street and Main Street, indicating strong investor interest in emerging tech companies.
- Opportunities for AI Firms: Cramer highlighted that SpaceX's success could encourage other companies, particularly in the AI sector like Anthropic, to quickly enter the market for funding, thereby accelerating their technology development and market expansion.
- Oil Prices and Inflation: Cramer noted that developments in the Middle East could impact oil prices, suggesting that a lasting peace could lead to lower oil prices, which would help alleviate inflationary pressures and create a favorable environment for economic recovery.
- Future Market Outlook: Cramer believes that SpaceX's successful debut supports market sentiment, indicating a potentially positive market performance in the upcoming week, especially with the approaching Federal Reserve meeting and economic data releases.
See More
SpaceX's Successful IPO May Spark AI Offering Wave
- Successful IPO of SpaceX: SpaceX's debut at $161 per share, valuing the company at approximately $2.1 trillion, injects confidence into the market and may encourage more AI-related firms like Anthropic to pursue IPOs.
- Positive Market Reaction: Cramer notes that SpaceX's success could prompt companies like Microsoft, Meta, and Amazon to sell stock to fund their AI initiatives, reflecting strong market interest and potential growth in AI investments.
- Economic Indicators to Watch: Cramer advises investors to pay attention to upcoming housing starts and retail sales data, as these metrics will provide crucial insights for the Federal Reserve's interest rate decisions, especially amid signs of economic slowdown.
- Geopolitical Impact: Cramer highlights that developments in the Middle East could affect oil prices, suggesting that a lasting peace could lead to lower oil prices, which would help alleviate inflationary pressures and create a more favorable environment for the market.
See More
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- Nvidia's Growth Potential: Nvidia anticipates global data center capital expenditures reaching $3 trillion to $4 trillion by 2030, benefiting from the increasing demand for GPU replacements as AI infrastructure builds out, positioning it for significant market outperformance over the next decade.
- Dual Advantage of Cloud Computing: Microsoft and Amazon's respective cloud platforms (Azure and AWS) are not only critical revenue sources but will also be key to future AI monetization, with substantial investments in new data centers expected to drive rapid growth in their cloud businesses.
- Long-Term Investment Strategy: Microsoft and Amazon are investing hundreds of billions in capital expenditures, which will yield returns in the coming years, encouraging investors to maintain a long-term perspective to reap substantial rewards.
- Market Response and Confidence: Despite concerns over capital expenditures, Amazon's CEO highlighted that AWS's rapid growth will provide the company with more investment capital, and this positive market sentiment is likely to further drive stock price increases.
See More
