The SpaceX IPO Has Wall Street Debating Whether the AI Boom Is a Bubble. Both Sides Have a Point.

SpaceX just completed the largest initial public offering in history.

The bear case points to stretched valuations and shrinking free cash flow at the biggest AI spenders.

The bull case points to soaring cloud backlogs and demand that is still going unmet.

On June 12, SpaceX (NASDAQ: SPCX) completed the largest initial public offering (IPO) in history, raising about $75 billion at a valuation of about $1.75 trillion -- more than double the size of any stock market debut before it. By the closing bell, the stock had jumped 19%, lifting the rocket-and-satellite company's value above $2 trillion.

SpaceX went public in the middle of a wave of artificial intelligence (AI) spending unlike anything the market has seen, with the four biggest technology companies alone on track to pour about $725 billion into capital expenditures (much of it on data centers and chips this year) -- up about 77% from last year. To some investors, a record listing landing on top of all that spending looks like the kind of enthusiasm that shows up near market tops. To others, it's a rational response to seemingly insatiable demand that remains largely unmet.

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Bursts of giant, money-losing IPOs have often clustered near market peaks, and SpaceX fits the profile. The company priced at more than 90 times its 2025 revenue while posting a $4.9 billion net loss for the year -- a loss driven largely by the AI unit, the former xAI, that Elon Musk folded into the company.

Yet demand for the IPO was heavy enough that the offering was oversubscribed several times over, with retail investors alone reportedly submitting more than $70 billion in orders.