The nontraditional reasoning behind SpaceX’s $1.75 trillion valuation

Wall Street is valuing Elon Musk’s business, SpaceX, using unusual measurements.

In an effort to defend a $1.75 trillion valuation ahead of what may be the biggest IPO in history. At least one of SpaceX’s major institutional investors is privately comparing the rocket and satellite company to market darling Palantir Technologies and AI infrastructure companies like GE Vernova and Vertiv rather than aerospace competitors like Boeing or telecommunications behemoths like AT&T.

This frame of reference, which was initially explained to Reuters by a person close to the company. Highlights the peculiar difficulty of valuing a business that has no clear public competitors and the extent to which Wall Street is prepared to go in order to defend such a high valuation.

Investors in the company, which plans to raise $75 billion in its IPO this year. Contend that comparisons with well-established businesses in conventional industries fall short of capturing the essence of SpaceX and Musk’s other businesses. Taking advantage of long-term structural economic shifts at a time when few rivals are ready to do so.

Historically, Musk’s companies have achieved high valuations, in part because investors are betting on him personally. Tesla is the clearest example—and SpaceX investors expect this dynamic to hold in any public offering.