SpaceX IPO Frenzy: The $1.75 Trillion Question
- Will Allen
- Jun 11
- 15 min read
Updated: Jun 30
The SpaceX IPO is the most hyped market debut in history. It comes with a $1.75 trillion valuation — nearly 20 times Facebook's, the previous record. In this market update, we break down what investors need to know: how Starlink drives the company's revenue, what a 95x sales multiple really means, and what 20 years of history says about stocks that go public at extreme valuations. There's no telling how the stock performs over the long run, but history is clear about what tends to happen early when valuations run this hot. We also cover how we think about speculative manias like this one - Bitcoin and silver have recently shown what happens when the hype fades.
Also covered: a jobs report that more than doubled expectations, job openings jumping by nearly a million, and S&P 500 profit growth on pace for its most impressive year in 25 years.
Video Recap
Prefer to read instead of watch? Here's the full breakdown
A pullback after a two-month rally is healthy, not a warning sign
Markets sold off in March around the Middle East conflict, then raced higher through April and much of May, led by tech. That leadership matters because in late March, the consensus view was that tech would underperform for the next couple of years. We took the other side of that call, and tech has driven the rebound since. The last week brought a couple of sharp legs lower, concentrated in tech and the big AI winners. We see that as constructive. Sell-offs along the way are how markets keep bubbles from forming, and a cooldown after a run this strong is part of a healthy market, not a reason to change course.
The 10-year Treasury is back above 4.5%, the level we're watching
The 10-year Treasury yield sits at 4.56%. For over a year, 4.5% acted as a lid on this rate. It broke above in May, ran to 4.68%, slipped back under, and is now above 4.5% again. We want to see it move back below 4.5% and stay there, because the 10-year sets mortgage rates and serves as a pressure gauge for the bond market. A resolution to the Middle East conflict could be the catalyst that pushes rates lower. If the yield keeps climbing instead, it becomes a problem for bonds first, and eventually for stocks.
The jobs market just delivered its strongest three-month stretch in over a year
May's jobs report came in at 172,000 jobs added, more than double expectations, and the prior two months were revised meaningfully higher. The three-month run now reads March 214,000, April 179,000, and May 172,000. That's a sharp turn from last summer and fall, when negative prints were mixed into the monthly data and many wondered if weak hiring was the new normal. Job openings confirm the shift: after declining steadily to roughly 6.7 million in late 2025, openings just jumped to 7.61 million, nearly a million more than four or five months ago, and the opposite of what analysts forecast. Wage growth is the quiet good news in the report. Average hourly earnings are growing at 3.4%, down from north of 5% in the post-COVID surge. At that level, the Fed can treat today's inflation as primarily oil-driven rather than wage-driven, which keeps the path open for inflation to fall once energy prices come down.
SpaceX prices at $1.75 trillion, 95 times last year's sales
SpaceX is expected to begin trading Friday, June 12 on the Nasdaq under the ticker SPCX at $135 per share, valuing the company at $1.75 trillion. The previous record for an IPO valuation was Facebook's debut at roughly $100 billion, so SpaceX is arriving at nearly 20 times that size. Starlink, the satellite internet business, is the company's revenue engine, growing fast and solidly profitable, while the space and AI businesses lose money. The valuation is the issue: at $1.75 trillion, SpaceX prices at 95 times last year's sales. Most large tech companies trade between 3 and 8 times sales. For perspective, the combined market value of GE, RTX, Boeing, Airbus, Honeywell, and several other aerospace names comes up just shy of SpaceX's IPO price. History offers a caution. Per Barron's, companies that debuted at extreme valuations over the last 20 years dropped an average of 45% in the three years following their IPO. Facebook itself fell more than 50% in its first four months, before becoming one of the market's best performers over the following 13 to 14 years. The long run is unknowable; the early pattern at valuations this stretched is well documented.
Four companies are raising $75 billion or more this summer, and the money has to come from somewhere
The SpaceX IPO is part of a larger capital wave. SpaceX, OpenAI, and Anthropic are all going public, and Google is issuing new shares on top of prior debt and cash spending, each raising $75 billion or more to fund AI buildouts. That's an enormous amount of capital to absorb in a single season. One dynamic to watch through the summer: investors may sell existing tech winners and other strong performers to generate the funds for these purchases. The enthusiasm around these names is real, but the funding mechanics alone could move markets.
Bitcoin, silver, and gold show what happens when the hype fades
Three recent manias, three painful unwinds, all visible in the year-to-date numbers. Silver is down 46% from its late-January peak; it fell 40% in a single week after we posted a warning about the mania on January 29. Bitcoin is down 30% year to date, echoing the 2021 crypto mania that ended in 70 to 90% drawdowns. Gold is down 24%; it was never in the same mania as silver, but overpriced nonetheless. This is why we build client portfolios around a written game plan: where you stand today, what your goals are, and a foundation of higher-quality assets designed to carry you there. There's room for a small, deliberate allocation to speculative ideas. The discipline is keeping it small when the excitement is loudest.
S&P 500 profit growth is on pace for its most impressive year in 25 years
Earnings per share for the S&P 500 are growing at roughly 28%, against expectations of about 12% at the start of the year. The strength is broad-based across industries, not just tech. In the last 25 years, only 2011 and 2021 posted higher profit growth, and both were rebounds out of nasty recessions where profits were simply recovering lost ground. This time is different: we were already in a normal environment, not climbing out of a hole. Over the long run, earnings growth is what determines where the stock market goes, and right now, it's the strongest pillar under this market.
Key takeaways
May added 172,000 jobs, more than double expectations; with March (214,000) and April (179,000), it's the strongest three-month hiring stretch in over a year.
Job openings jumped to 7.61 million and wage growth cooled to 3.4%, letting the Fed treat inflation as oil-driven rather than wage-driven.
The 10-year Treasury sits at 4.56%; we're watching for it to fall back below 4.5%.
SpaceX is set to trade Friday as SPCX at $135, a $1.75 trillion valuation, about 95 times last year's sales versus 3 to 8 times for most large tech.
Per Barron's, companies that debuted at extreme valuations over the last 20 years fell an average of 45% over the following three years.
SpaceX, OpenAI, Anthropic, and Google are each raising $75 billion or more this summer, which could pressure existing winners as investors raise cash.
Bitcoin (down 30%), silver (down 46% from its January peak), and gold (down 24%) show how quickly manias unwind.
S&P 500 earnings are growing roughly 28% versus the 12% expected at the start of the year, the strongest profit growth in 25 years outside of recession rebounds.
Have questions about how this affects your portfolio?
Headlines about record IPO valuations and a wave of AI capital raises can make it hard to know what actually matters for your money. That kind of perspective is what we bring to every Sentara Capital client relationship. If you'd like to talk through what these trends mean for your specific situation, we'd welcome the conversation.
Contact Us at (770) 509-5305 to Begin Your Journey
FAQ: SpaceX IPO
Is SpaceX's $1.75 trillion IPO valuation justified?
By traditional measures it is extreme. At $1.75 trillion, SpaceX is priced at about 95 times last year's sales, while most large tech companies trade between 3 and 8 times sales. History urges caution: per Barron's, companies that went public at extreme valuations over the last 20 years fell an average of 45% over the following three years.
Should I buy SpaceX (SPCX) when it starts trading?
That depends on your goals, your timeline, and how a speculative position fits the rest of your portfolio. There can be room for a small, deliberate allocation to high-excitement ideas, but the discipline is keeping it small, especially when the hype is loudest. It's a position-sizing question worth talking through with an advisor rather than chasing on day one.
Is the U.S. jobs market actually weakening?
The recent data says the opposite. The last three months added 214,000, 179,000, and 172,000 jobs, the strongest stretch in over a year, and job openings jumped back to 7.61 million after months of decline. Hiring had been the missing piece, and it is heating up.
What should investors watch this summer?
Watch the wave of capital raises, with SpaceX, OpenAI, Anthropic, and Google each raising $75 billion or more, since investors may sell existing winners to fund them. Also watch whether the 10-year Treasury falls back below 4.5%, and whether the Bitcoin, silver, and gold unwinds continue.
Have a question we didn't cover? Call us at (770) 509-5305.
Click for Full Transcript
In today's market update, we're going to check in on the stock market. We're also going to look at last Friday's much stronger than expected jobs report and the upcoming SpaceX IPO. Need I say more? Let's dive into it.
Before we get into the market update, a reminder: if you haven't subscribed, go ahead and do so. We're getting close to 5,000 subscribers. It has been a great ride, and the success of the channel has really been that we're talking about a lot of financial topics you don't hear elsewhere. A lot of times, narratives in the financial media aren't accurate. We like to go deep and give you the info you need to know.
All right, let's start by talking about what's happening right now with the stock market. We had a big sell-off in March around the conflict in the Middle East. Then you can see a nice bounce back. The markets raced higher in April and much of May, led by tech, which, by the way, in late March was very much out of favor. A lot of people said, "Hey, the next couple of years, tech's going to underperform." We felt differently, and tech has outperformed. But notice in the last week, we've had a couple of big legs lower in the market. And this is not a bad thing. One of the things I help clients understand is, of course, over time you want your portfolios to go higher, but along the way there are going to be sell-offs, and it's a healthy part of keeping bubbles from forming. So we've had a bit of a cooldown in tech and some of the big AI winners over the last couple of months, and it's been good to see a little cooldown period.
Now, we also want to touch base on interest rates. If you've seen our channel before, you know we pay a lot of attention to long-term rates, the 10-year Treasury specifically, because this is what mortgage rates are based off of. You can see this is up at 4.56%. There was a lid on 4.5% for over a year. It broke above that in May, went up to 4.68%, came back down south of 4.5%, and is now back above 4.5%. So here's what you need to know: we want to see this number get back below 4.5% and stay there. We're hoping that when the Middle East conflict ends, that will be the push necessary to get rates lower. But if this keeps going higher, it's a problem for bonds and eventually becomes a problem for the stock market also.
So I led off talking about the much stronger than expected jobs report, and that is exactly what we got last Friday. The May numbers came in at 172,000 jobs added. That was more than double what expectations were. But it didn't stop there. We also had a big increase in the job gains for the previous two months. If you look over the last year at the monthly numbers, notice on the left side of the screen, for a lot of last summer and into the fall, there were a lot of negative numbers mixed in, and the positive numbers weren't all that good. A lot of people were wondering, hey, is this the new normal? Now notice the last three months: 214,000 jobs added, 179,000, and 172,000. This is very good news, because the jobs market, and jobs being added, is the one piece that has been missing over the last year. If this continues, this could be very good news for consumers, because when consumers have jobs, they spend money.
Now, this was one jobs report. We got another data set on the jobs market, and here we're talking about job openings. This is a chart from the last 10 years. This skyrocketed in the first year or two of COVID, in fact, over 12 million job openings in early 2022, when a lot of companies could not find enough employees. Then that steadily went down and reached around 6.7 million in late 2025, early 2026. But notice this has inflected higher and just jumped to 7.61 million. So, almost a million more job openings now than there were four or five months ago. This was the opposite of expectations, where analysts thought this was going to keep going lower and lower. So this fits, doesn't it, with all the jobs added that we just saw over the last three months. This is telling us companies are continuing to post more openings. The jobs market is certainly heating up.
Now, one other metric from the jobs report I want to mention is wage growth. We're talking here about average hourly earnings, and we're comparing that to inflation over the last 10 years. Orange is inflation; blue is the growth in wages. Both of these went up a lot in the early days post-COVID, when inflation got out of control and wage growth went up to north of 5%. It's been on a steady decline since, and in fact, this is good news, 3.4% wage growth. Because if this goes up to 4.5%, 5.5%, it becomes a lot harder for the Fed to cool inflation. This way, the Fed feels like inflation is mainly driven right now by the conflict in the Middle East. Hopefully, when that ends, the inflation rate will come back down once oil prices and gas prices come down.
Now, our next topic is SpaceX, and there's going to be a little twist at the end of this. SpaceX is the topic everybody hears about anywhere you go. I started my career in 1998. There have been a lot of big IPOs, especially starting during that dot-com era. I have never seen more enthusiasm, excitement, hype, whatever word you want to use, than for SpaceX. And there are a lot of reasons for this. This is a combination of Elon Musk, space, and AI all rolled into one.
We wanted to give you a few details so that you can be aware. It's expected to start trading this upcoming Friday, June 12th, at $135 per share. And hold on for this number: that is going to price the shares at a $1.75 trillion, with a T, valuation, which is crazy to think about. To give you an idea, up until this point, the largest valuation at IPO that we have seen was Facebook, back over 10 years ago, and that was at around a $100 billion valuation the day they started trading.
Now, here's a couple of things to note. Number one, Starlink, their internet service, is the main driver right now of revenue in the company. The company loses money because of the space business and the AI business, but Starlink does very well. It's growing fast and they make good profits on that. Now, here's the issue. At that $1.75 trillion valuation, SpaceX is trading for 95 times last year's sales. To give you an idea, most of the big tech companies you know of are trading at three times sales, six times sales, eight times sales. So this is in another stratosphere altogether, or shall I say outer space. But one more thing to mention, and this is from Barron's. If you go back over the last 20 years, companies that traded at extreme valuations have on average dropped by 45% in the three years following their debut. We don't know what's going to happen when this starts trading on Friday, because there is so much demand here. But history says that when these companies come public at high valuations, somewhere in those first six months the stock prices get rocked. That happened with Facebook. It dropped over 50% in the first four months, and then it's gone on to be one of the best stocks in the market over the last 13 to 14 years. So over the longer term, we will see what happens, but it's just a buyer beware, be careful, because we've never had anything trade at this much of a nosebleed valuation as what SpaceX is.
Now, one other chart that I want to show you takes a look again at that valuation, SpaceX on the right at $1.75 trillion. If you add on the left the total valuation of GE, RTX, Boeing, Airbus, Honeywell, and other names, all of those combined come up to just shy of what SpaceX is going to be trading for at this IPO price. So there's a lot of excitement about what's going to happen in the future, and that's really what you're banking on if you buy the shares, the innovation that Elon hopes to hit on with a lot of these things.
Now, SpaceX is trying to raise $75 billion, but they are not alone this summer and early fall. We also have OpenAI, which is ChatGPT's parent. We have Anthropic, which is Claude's parent. And now we have Google coming to the party as well, all needing to raise serious amounts of money. In fact, all four are trying to raise $75 billion or more. SpaceX, Anthropic, and OpenAI are all going public, so their shares will be traded. Google is currently public. They are raising this money so they can spend it on building out their AI. They had already issued some debt, they had used some of their cash, and now they're also issuing shares. The big question here is where the money is going to come from. This is a lot of money that's going to be needed. So one thing to be aware of as you go through the summer is there may be some selling of tech winners and other winners to generate the funds needed for these purchases. There is so much excitement around all these names, especially the three IPOs, that it's something you just have to be aware of, because it definitely could impact trading as we go through the summer.
Now, one important point is that for clients, we put together game plans for each one based on their goals and where they stand today, and then build rock-solid portfolios that over time we believe can help them get from where they are to where they want to be. It's totally fine to take a small percentage and put it into something a little more speculative, a higher-risk, higher-return type of situation, but you want to be careful not to go all in on these areas that are so speculative or that have so much hype and excitement. We have examples of that. This chart shows Bitcoin, silver, and gold year to date. I want to mention these because all three, at different points in the last four or five years, have had a mania around them. Silver, it happened just four months ago. In fact, we have a video on our blog that we posted on January 29th warning people about a mania there and that it was very risky. Silver then proceeded to drop 40% over the next week, and here in early June is still down 46% from where it was. A lot of money went in near the top, and those people have lost a lot of money. The same thing has been true multiple times with Bitcoin. The best example was 2021, when all crypto was basically in a mania and we had a lot of clients asking us about it. We basically told them it was smart to sidestep this almost altogether, and that turned out to be the right advice when almost all crypto dropped by 70, 80, 90%. And the last point is gold. Gold was not in the same mania that silver was earlier this year, but it still was overpriced, and it has also dropped 24%. You can see all three of these are down year to date, with Bitcoin down the most at 30% year to date. So when something is very exciting, when there's a lot of hype, it's just prudent to only put a certain small percent of your portfolio in those investments. You want to have the majority of your assets in investments that are a lot more sound and a lot higher quality.
Last topic today, we are going to update you on earnings per share growth, profits for the S&P 500. This is the thing that over the long run determines where the stock market goes, and we are having a blockbuster year when it comes to company earnings coming in a lot higher than expected. This looks over the last 25 years. In black at the top is the forward earnings per share expectations for the S&P 500. Down below is the growth rate in earnings per share, and notice this is up to the high 20s, around 28% growth. Here's what's amazing. At the start of this year, expectations were going to be around 12%. So we are talking about smashing expectations, and it hasn't just been tech that's done very well. It's been a lot of industries across the board. When you look at the last 25 years, the only two occasions where profit growth was higher than it is right now were 2011 and 2021, both coming out of nasty recessions where profits had gone down.
And so profits were just bouncing back to where they were and then going up from there. This isn't bouncing back from anything, we were in a normal environment. So, in my opinion, this is the most impressive performance that corporations have had in the last 25 years. And this has really driven stocks higher.
So, last week we posted our first extended video, a discussion video, almost 30 minutes. If you haven't seen it: the real question to ask, what is your spending number? SpaceX, the excitement is off the charts. Are we going to get back to inflation of the '70s? Who taught you how to dance? I have been fired by two different dance instructors. Well, now you know what you missed. Go watch that. In the future on the channel, we'll continue to post these market updates, but there will be more videos like that. A lot more content to come later this year. Take care.
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