Palantir Technologies CEO Alex Karp told CNBC today that he is 'rooting for' SpaceX ahead of what is expected to be the largest initial public offering in stock market history. However, Karp's enthusiasm does not necessarily translate into a buy recommendation for retail investors, as the company's valuation raises significant concerns.
Karp's Endorsement: Founder-Focused, Not Sector-Wide
Karp praised SpaceX CEO Elon Musk's execution capabilities, calling the IPO a 'blessing for America' and a moment for entrepreneurs to celebrate. He clarified his stance by stating he is 'bullish on Elon in space' but has 'no idea' about the broader space sector. This distinction is critical: Karp's optimism is tied to Musk's track record, not a blanket endorsement of space investments.
Palantir has partnered with SpaceX on defense projects, including the Golden Dome missile protection initiative, giving Karp firsthand insight into the company's operations. Yet he did not disclose any personal investment in the IPO, positioning himself as a supporter rather than a financial backer.
Valuation Reality: 95x Sales vs. Industry Peers
SpaceX is targeting a valuation near $1.8 trillion, implying a trailing price-to-sales (P/S) ratio of approximately 95x. For context, Nvidia—one of the most richly valued tech stocks—trades at about 23x sales, while Palantir itself trades at roughly 73x. Morningstar estimates fair value for SpaceX at around $780 billion, less than half the IPO target.
Despite impressive revenue growth—$18.7 billion in 2025, up 33% year-over-year—SpaceX reported an operating loss of $2.6 billion, largely due to its xAI division. Starlink, with over 10.3 million subscribers, generated more than $11 billion in revenue and remains the company's only profitable segment.
Post-IPO Risks and Market Sentiment
The IPO is reportedly nearly four times oversubscribed, reflecting intense demand. However, analysts warn of potential post-listing volatility. One analyst has projected that SpaceX stock could fall to as low as $75 in the weeks following its debut. SpaceX Stock Dips Below $135 IPO Price Amid Post-Listing Volatility highlights the risks of buying at peak hype.
Short interest has also surged to 29% of the float, as noted in SpaceX Short Interest Surges to 29% of Float: Is a Meme Stock Squeeze Brewing?, suggesting bearish bets against the stock. Meanwhile, SpaceX Stock Slips 2% as Lockup, Short Interest Weigh on Sentiment indicates ongoing pressure from lockup expirations.
How Investors Should Approach the SpaceX IPO
Karp's comments underscore a key distinction: rooting for a company is not the same as investing in it. With a P/S ratio of 95x, SpaceX is priced at a premium that exceeds virtually every comparable in the market. Even Karp, a close partner and admirer of Musk, stopped short of saying 'buy the stock.'
Investors should weigh the company's extraordinary technological achievements—from revolutionizing rocket launches to building a satellite internet giant—against the risk of paying a near-100x sales multiple. As always, due diligence and a long-term perspective are essential.
This article is for informational purposes only and does not constitute financial advice.
