Bengaluru – SpaceX just set a price for its initial public offering that would make it the largest ever, but one research firm has warned that Elon Musk’s rocket and AI behemoth is “significantly overvalued”.Morningstar analysts pegged SpaceX’s valuation at US$780 billion (S$1 trillion), less than half the US$1.77 trillion that the company is targeting with its US$135 per share IPO.Prospects for the company’s artificial intelligence business, which includes xAI and social media platform X, were uncertain given unclear economics and competition from OpenAI and Anthropic, the research firm said.“We don’t see Grok as one of the leading AI labs today,” said Morningstar equity analyst Nicolas Owens, referring to the chatbot developed by xAI.Owens also warned that the future promise of SpaceX’s AI segment relies on untested technology such as orbital data centres. Starlink, the satellite broadband business, also faces technological hurdles, many of which may be outside the company’s control, he said.“We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO,” Owens said.The warning stands out as a rare contrarian view at a time when enthusiasm for the IPO has been high.Most companies that go public set a preliminary price range for their stock offering before settling on a final number in case investor demand for their shares changes. But Musk and SpaceX sidestepped that and simply declared one price for investors, the New York Times noted. SpaceX could still change that price but is not expected to do so, the newspaper added.Its current valuation of US$1.77 trillion from its IPO price would be more than 40 per cent higher than the US$1.25 trillion that SpaceX valued itself at in February. The company was also last valued at US$1.53 trillion on secondary trading platform Forge Global.SpaceX is aiming to launch a roadshow on June 4, with the stock scheduled to debut on the Nasdaq on June 12.Morningstar said the stock could ascend in the near term, given the low float and the strong cadre of major investment banks underwriting the IPO.Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup and JPMorgan are among the underwriters for SpaceX’s share sale.However, “long-term investors eager to participate in SpaceX’s future endeavours and potential success will have opportunities to do so with a greater margin of safety than the initial offering is likely to provide”, Owens said.A rally in SpaceX’s share price in its first days of trading could make Musk, who is already the world’s richest man, its first trillionaire. At US$135 a share, the roughly 50 per cent stake in SpaceX that he controls would be worth just over US$752 billion. He has used SpaceX as a kind of piggy bank over the last two decades, securing loans from the company to himself and relying on the firm to shore up several troubled businesses in his orbit, NYT said.In May, SpaceX gave the first look at its full financial health in the public filing of its IPO prospectus. It revealed a loss of US$4.94 billion in 2025, compared with a US$791 million profit in 2024, because of increased spending on AI.It also disclosed a super-voting share plan allowing Musk to keep SpaceX under his control.The company plans to use the money it raises from its IPO to fund various of Musk’s goals, from putting AI data centres into space to sending humans to Mars. REUTERS