Palantir’s chief executive, Alex Karp, made headlines this morning as he told CNBC he was “rooting for” SpaceX ahead of what is shaping up to be the largest initial public offering (IPO) in the history of the stock market.
Karp, whose own company has partnered with SpaceX on defense proposals including the Golden Dome missile protection initiative, was effusive in his praise – calling SpaceX’s IPO a blessing for America and an occasion for every entrepreneur to celebrate.
But rooting for a rocket company and betting your money on its stock are two very different things.
Karp has a simple reason to be bullish on SpaceX IPO
There was genuine warmth in how Karp talked about Elon Musk and SpaceX on CNBC.
He called out the staggering scale of the IPO, pointing out that in most countries, a listing of this magnitude would trigger national euphoria.
“I think most Americans and certainly I hope all entrepreneurs are rooting for success,” Karp said. He also framed his optimism in a notably precise way: “Bullish on Elon in space? Yes. Bullish on space? No idea.”
That nuance matters. Karp isn’t making a broad sector call – he’s making a founder call. He believes in Musk’s execution ability, a view grounded in years of watching SpaceX do things no other firm has pulled off.
For retail investors tempted to follow Karp’s lead, that’s a meaningful, if incomplete, endorsement.
SpaceX tech is amazing, its valuation is something else entirely
There is no serious argument against SpaceX’s engineering credentials.
The company has rewritten the economics of rocket launches, built Starlink into a satellite internet service with over 10.3 million subscribers, and is developing Starship with ambitions that stretch literally to Mars.
SpaceX revenue jumped an exciting 33% on a year-over-year basis last year to $18.7 billion, with Starlink alone generating more than $11 billion, making it the company’s only genuinely profitable division.
However, the problem is the price tag attached to all of this brilliance. SpaceX is targeting a close to $1.8 trillion valuation, in what will be the largest IPO ever, more than triple the size of Alibaba’s record US offering.
That implies a trailing price-to-sales (P/S) ratio of roughly 95x. To put that in perspective – Nvidia, one of the most richly valued tech companies on the planet, trades at roughly 23x sales.
Even Palantir – Karp’s own company, notorious for its sky-high multiples – trades at about 73x.
So SpaceX is asking investors to pay a premium that exceeds virtually every comparable in the market.
Meanwhile, despite Starlink’s profitability, it reported an operating loss of $2.6 billion for 2025, mostly attributed to its cash-burning xAI division.
Note that Morningstar pegs fair value for SpaceX at around “$780 billion” – less than half the IPO target.
How to play the SpaceX IPO this week
Here’s the question investors should be asking: when Alex Karp says he’s rooting for SpaceX, is he putting capital behind that sentiment – or is he cheering from a comfortable seat in the stands?
Karp made no mention of personally investing in the IPO. He spoke as a partner, a peer, and an admirer of Musk’s track record.
That is a very different posture from a financial endorsement. Rooting for a company costs nothing.
Buying its IPO shares at a near-100x price-to-sales multiple costs quite a lot and carries meaningful downside risk.
One analyst has already warned that SpaceX stock may fall to as low as $75 in the weeks following its debut.
The IPO demand is reportedly approaching four times oversubscribed, which speaks to the feverish enthusiasm surrounding the listing, but also to the risk of post-IPO hangover if growth disappoints.
In short, SpaceX is a genuinely extraordinary company run by a genuinely exceptional founder.
By all means, root for it. But before you wire your savings into SPCX on day one, remember that even Karp – a self-described optimist who literally works with SpaceX – stopped short of saying “buy the stock.”
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