SpaceX Will Surpass Nvidia and Become Wall Street's Most-Valuable Public Company by the End of Next Year, According to One Wall Street Analyst

SpaceX's June 12 IPO raised $75 billion, making it Wall Street's largest-ever listing and valuing the company at $1.77 trillion at pricing. Arete initiated coverage with a Buy and a Street-high $401 price target, implying a $5.28 trillion valuation by the end of 2027, but the article argues history suggests a 50%+ post-IPO drawdown is more likely. The discussion centers on Starlink's growth potential, index-inclusion flows, and the risk that the stock is already trading at an elevated P/S multiple of nearly 131.

Analysis

The key setup is not whether the business can grow into the valuation mathematically, but whether the market can tolerate the path dependency. At this size, the stock becomes less about fundamental compounding and more about how long the float remains constrained relative to forced buying from passive benchmarks; that can create a multi-week squeeze even if the long-run multiple is unsustainable. The second-order risk is that every incremental buyer is paying for perfection while the base case already assumes continued execution across satellite launches, broadband monetization, and adjacent AI optionality.

The real bear case is duration mismatch. Early-stage mega-cap IPOs often peak on flow-driven scarcity, then re-rate violently once lockup dynamics, insider selling expectations, and normal quarterly scrutiny replace narrative momentum. If growth decelerates even modestly after the initial index-inclusion bid, the market will likely compress the multiple faster than revenue can compound, which is why the downside can be 40-60% before fundamentals fully break.

For the named comparables, the article is more relevant for flow and sentiment than for fundamentals. NDAQ is the cleaner relative winner if this name becomes a magnet for index and ETF activity, because elevated issuance/turnover regimes can support trading and listing revenues. TFC is an odd but real beneficiary if the market starts pricing broad risk-on wealth effects and IPO-adjacent deposit inflows, though that is much weaker and more transient than the NDAQ angle.

The contrarian point is that consensus is over-indexing on addressable market size and underweighting capital intensity, execution complexity, and valuation reset risk. A $5T outcome is possible only if the company simultaneously sustains elite growth, avoids margin dilution, and keeps investor faith through several quarters of inevitable volatility. That is a high bar in a post-IPO environment where the first large drawdown is usually a function of positioning, not business quality.

Key Decisions for Investors

• Short SPCX on strength or via call spreads into any post-IPO momentum spike; view as a 3-6 month mean-reversion trade with 40-50% downside potential if flow fades after index-driven buying exhausts.
• Pair trade: long NDAQ / short SPCX for 1-3 months to express the difference between recurring market-structure beneficiaries and a flow-dependent story stock; thesis improves if IPO/secondary activity stays elevated.
• Avoid chasing SPCX outright until after the first earnings cycle and any lockup-related supply window; entry at a 20-30% pullback offers meaningfully better risk/reward than buying into benchmark inclusion demand.
• For tactical exposure to the AI/space narrative, buy short-dated call spreads on SPCX rather than stock; this caps premium paid if the valuation compresses faster than the story compounds.
• Do not overread TFC's positive signal; any long in TFC should be treated as a separate macro/financials decision, not a direct beneficiary trade, with only a 1-2 week sentiment tailwind at best.