A Billion Dollar Gap: SpaceX Valuation Questioned by Morningstar

Morningstar estimates SpaceX's fair value at $62, a gap of $1.2 trillion compared to its current market price. The company's stock has seen significant losses, with some arguing it's a risky addition to Musk-heavy portfolios due to losses from xAI and governance concerns.

Morningstar set a fair value of $62 per share for SpaceX, representing approximately $780 billion in enterprise value when probability-weighting AI scenario upside. Against a market price of $157, that implies a $1.2 trillion valuation gap. Morningstar's base case values the Starlink and launch businesses at $611 billion, with $170 billion added for AI optionality — but the AI premium is weighted by significant uncertainty around xAI's feasibility and economic viability .

The governance and financial concerns are specific: xAI posted a $6.355 billion operating loss in 2025 against combined SpaceX/xAI revenue of $18.7 billion. Elon Musk controls 80-85% of voting rights through a dual-class share structure while simultaneously holding CEO, CTO, and Chairman roles. The xAI acquisition was flagged by Morningstar as a non-arm's-length transaction, a governance structure that institutional ESG-screened funds have cited as a barrier to SpaceX inclusion .

SpaceX's positive correlation with TSLA creates an additional portfolio risk dimension. Investors adding SpaceX for diversification exposure to space and AI themes may find the shared Musk sentiment cycle provides less diversification than expected. Morningstar's $62 target doesn't preclude SpaceX growing into its valuation, but doing so requires assumptions about Starlink enterprise penetration, reusable launch economics, and xAI profitability that are not yet visible in disclosed financials.