SpaceX (NASDAQ: SPCX) will raise a whopping $75 billion from its public market debut at $135 per share, making it the largest IPO in history. Even with that already huge valuation, many investors expect the stock price to climb quickly. Some see a quick first-day pop in the IPO price, while others expect SpaceX to be a great long-term investment.

In its Securities and Exchange Commission registration filing, SpaceX estimated a total addressable market of $28.5 trillion for its various businesses. If that number's taken at face value, there's a ton of upside potential for the stock, even at a value of about $1.77 trillion at its IPO. But that requires SpaceX to rapidly develop its technology and capture a share of those markets. Here's how much upside one analyst realistically sees for the stock.

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What has to go right for SpaceX to take off

A common valuation method is to create a bull case, a bear case, and a base case for a company and use those scenarios to project operating income and cash flow. You can then weight those cases and calculate a weighted average for the stock's fair value. Even if a stock trades above its fair value, it could be worth taking a stake in it to participate in the upside if it has a ton of potential.

Morningstar's analysts laid out their bull case for SpaceX ahead of the IPO. In its most optimistic scenario, SpaceX successfully develops and scales its Starship rocket by 2028. Starship is the company's massive new rocket, designed to carry a payload of 100 metric tons. That's over 4 times the capacity of its Falcon 9 and 1.5 times the capacity of its Falcon Heavy, which are currently in use. Importantly, the rocket is designed to be fully reusable.

Successfully transitioning to Starship could significantly reduce launch costs, which has knock-on effects for the rest of the business. In fact, SpaceX calls out a failure to develop Starship at scale as a key business risk in its S-1 filing. Significant delays or other challenges with Starship "would delay or impede our ability to achieve our other business objectives, such as the deployment of our next-generation satellites, the expansion of our satellite-to-mobile connectivity services, and deployment of in-orbit AI compute infrastructure."