SpaceX's highly anticipated initial public offering on Friday could mark a defining moment for global capital markets and may ultimately serve as a "referendum" on Elon Musk's leadership, according to market observers.

The company's targeted valuation of $1.75 trillion reflects a price-to-earnings multiple of roughly 100 times, compared with about 20 to 25 times for NVIDIA and around 10 times for Apple.

Nasdaq recently amended its listing rules to facilitate the inclusion of SpaceX and other companies planning mega IPOs into the Nasdaq-100 Index, while SP Global declined to make exceptions that would allow the company early entry into the SP 500 Index.

What voting rights will Elon Musk retain?

Investors are also being asked to accept exceptions related to the company's lofty valuation, as well as Musk's insistence on retaining an estimated 80% to 85% of SpaceX's voting rights, a governance structure that has often raised concerns among investors, even for companies with established profitability records.

Matt Calkins, chief executive of Appian, told CNBC that the IPO "represents a referendum on Elon Musk and how much confidence investors have in this entrepreneur."

"I think investors have tremendous confidence because he has accomplished so much, and they are betting on his ability to open entirely new markets," he said. "But it remains a very high-risk bet."

He added: "Personally, I have no desire to invest, nor would I even want to speculate on an IPO of this nature."

Calkins noted that markets remain in a very early stage marked by significant uncertainty and that many investments are currently driven more by conviction than by traditional financial fundamentals.

Ben Ritchie, head of equities at abrdn, wrote in a note on Thursday that the offering will test "how willing investors are to embrace a new model of public equity ownership based on elevated valuations, limited governance rights, and trust in a founder-led vision."

"That combination has worked before, but can it work at this scale?" he asked.

Could SpaceX shares reach $330?

Despite concerns over valuation, many investors remain optimistic about SpaceX's prospects in both the near and long term.

Analysts at New Street Research said in a note on Thursday that they expect the stock to reach $165 within 12 months of the IPO, implying a 22% gain and a valuation of approximately $2.3 trillion when factoring in the proposed acquisition of code-editing company Cursor.

"The opportunity within the space sector is enormous and diverse and will develop over more than a decade," the analysts wrote.

They added that their $2.3 trillion valuation assumes SpaceX captures roughly 75% of the addressable market based on their conservative growth estimates.

Under a more optimistic market-growth scenario, while assuming the company captures only 50% market share, they believe fair value could reach $330 per share.

James Dow, however, urged caution when assessing the company's long-term future.

"SpaceX's valuation depends on what the company will be doing 20 years from now," he told CNBC.

"But 20 years from now, Musk will be much older, and I don't know what role he will be playing at that point."

He added that SpaceX's value is "heavily tied to Musk himself, and I believe that is one of the company's biggest risks."

Retail investor orders exceed $100 billion

According to people familiar with the matter, retail investor demand for SpaceX shares has exceeded $100 billion as the potentially record-breaking IPO approaches its final stages.

The company is expected to allocate at least 20% of the offering to retail investors, according to sources who requested anonymity because the information remains confidential.

At a $75 billion offering sizethe largest in historysuch an allocation would still leave most retail demand unmet, according to Bloomberg calculations.

Demand has climbed from more than $70 billion, a figure Bloomberg reported earlier on Thursday, as orders continued to increase throughout the marketing period.

The more than $100 billion figure includes orders from retail investors both inside and outside the United States.

Major institutional investors, including sovereign wealth funds, have reportedly secured allocations exceeding $1 billion each.

Saudi Arabia's Public Investment Fund and Kuwait's Kuwait Investment Authority submitted large orders, while the Qatar Investment Authority is also expected to make a significant commitment, according to previous reports.

Market observers believe that if many Elon Musk supporters fail to receive sufficient allocationsor receive no shares at alldemand for the stock could surge once trading begins.

Musk has built a strong retail-investor following through his leadership of Tesla, whose shares are estimated to be about 40% owned by individual investors, according to BNP Paribas analyst James Picariello.

In 2020, Musk wrote on X: "I'm a big fan of small retail investors."

Referring to a potential IPO of Starlink, he added at the time: "I'll make sure they get top priority, and you can hold me to that."

Sources said the rocket, satellite, and artificial intelligence company has received orders from roughly 1,000 institutional investors.

The terms of the offering are unlikely to change, including the $135 share price and the planned issuance of 555.6 million shares.

SpaceX is expected to raise approximately $75 billion in a deal that values the company at around $1.8 trillion.

The company is also expected to allocate less than 10% of the shares to international investors, while the allocation reserved for Japan was reportedly increased this month to $2.5 billion from $2 billion.

Discussions remain ongoing, and some details of the offeringincluding the retail allocation percentagecould still change.

Banks are expected to stop accepting institutional orders before final pricing on Thursday, with trading scheduled to begin on Friday.

The deal is expected to become the largest IPO in history, surpassing the 2019 listing of Saudi Aramco, which raised $29.4 billion.

The offering could also pave the way for other giant AI-related IPOs. OpenAI confidentially filed for an IPO on Monday, while Anthropic took a similar step last week.

According to Bloomberg calculations, the three companies could collectively add as much as $3.6 trillion in market value to US stock exchanges.

The IPO is being led by Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase, alongside 18 additional banks.

The company, formally known as Space Exploration Technologies, is expected to begin trading on Nasdaq under the ticker symbol "SPCX."