SpaceX IPO'd at $1.75 trillion. Morningstar says it's worth $780 billion. Who's right?

On June 12, 2026, SpaceX began trading on the Nasdaq under the ticker SPCX, in the largest initial public offering in history — roughly $75 billion raised at a valuation near $1.75 trillion. Within three sessions the stock ran from its $135 offer price to around $200, a gain of nearly 50%, and its options became the most heavily traded debut ever, with implied volatility north of 120%.

There was just one problem. In the run-up to the listing, Morningstar's equity analysts published their own number: a fair value of about $780 billion — roughly $63 a share, less than half the IPO price, and barely a third of where the stock traded by day three. One of the most respected research shops in the business looked at the most anticipated listing in a generation and said, in effect, the company is worth less than half of what its IPO buyers paid — and a third of what the market is paying now.

Who is right? The distance between what a company is worth and what the market will pay is the central question of equity valuation.

Two numbers, two methods

Morningstar's $780 billion came from a discounted cash flow model: forecast the cash the launch business and Starlink will generate, add a probability-weighted slice for the speculative AI and Mars optionality, and discount it all back to today. That is intrinsic valuation — value built from a company's own future cash flows.

The market's $1.75 trillion-and-climbing is something else: price, set by what buyers will pay right now. At the IPO the stock changed hands near 94 times sales — a multiple that only makes sense if the growth ahead is both enormous and nearly certain.

The exam frames the tension exactly this way. Intrinsic value is your estimate of what a stock should be worth, and price is what it trades at. The two can diverge, and stay diverged, for a long time.

Why the gap is so wide

A DCF is hypersensitive to its assumptions. Small changes in the growth rate or the discount rate swing the answer enormously, and for a company whose biggest businesses barely exist yet (Starlink at full scale, Starship economics, Mars), nearly everything is assumption. Morningstar is pricing what it can defend with cash-flow math. The market is pricing a story (scarcity, optionality, the chance that one of those moonshots is worth a trillion on its own) that a disciplined DCF deliberately refuses to put a number on.

Neither is obviously wrong. Either the market is paying for a narrative the model cannot see, or it is caught in exactly the kind of mispricing that valuation discipline exists to flag. Markets are mostly efficient most of the time, which is why a gap this wide is so striking.

What the options are saying

The disagreement showed up most vividly in the options market. Implied volatility (the market's estimate of how much the stock will move) opened above 120%, against the 25–40% typical for a large-cap tech name. Volatility is the single most important driver of an option's value, so those contracts were extraordinarily expensive: the market was, in effect, putting a number on its own uncertainty. As the dust began to settle, that volatility collapsed in an "IV crush" that punished call and put buyers alike.

The exam beneath the hype

Strip away the headlines and SpaceX is core valuation: a DCF-derived intrinsic value set against a market price, a DCF's extreme sensitivity to its growth and discount assumptions, and volatility as a driver of option value. The job is not to decide whether SpaceX is worth $63 or $200. It is to understand exactly what each number means, and why two careful parties can look at the same company and reach such different answers.

Price is what you pay. Value is what you judge it is worth. Most of the time the two sit close together. The questions that matter, on the exam and in practice, live in the gap between them.