Morningstar analysts valued SpaceX at $780 billion, significantly below the company's reported $1.75 trillion IPO target. The firm's assessment comes as SpaceX prepares for its roadshow beginning June 4, with shares expected to debut on Nasdaq June 12. This gap highlights investor skepticism despite strong underwriting support from major banks.

The analysts questioned SpaceX's AI ambitions, citing uncertainty around xAI's Grok chatbot and competition from established players like OpenAI and Anthropic. Morningstar's Nicolas Owens stated Grok isn't among leading AI labs today, expressing doubt about orbital data centers that SpaceX plans to leverage.

Starlink faces additional headwinds, with technological hurdles that may lie beyond SpaceX's control according to the report. While the stock could rise short-term due to limited shares and strong underwriting, Morningstar suggests waiting for better entry points.

The contrarian view contrasts sharply with market enthusiasm for the upcoming IPO. SpaceX's previous secondary valuation of $1.53 trillion on Forge Global now appears optimistic compared to Morningstar's conservative assessment, potentially giving long-term investors safer entry opportunities post-debut.