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18 August 2026
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What is SpaceX today and what are its ambitions?
Answering these questions are key to understanding the investment case behind the newly-listed business.
The successful initial public offering of shares in the Elon Musk controlled company SpaceX, means thousands of retail investors now have a financial interest in the company.
Following the end of the blackout period restricting investment banks from publishing their research, those reports are now in the public domain, which means consensus analysts’ forecasts can be compiled.
It is fair to say that SpaceX is an unusual company with lofty ambitions, and although it has developed a profitable business launching rockets and operating satellites, the group is not forecast to become cash flow positive for several years, as capital expenditures ramp up.
This means most of SpaceX’s $1.7 trillion market value is based on estimated future cash flows, which stretch many years into the future. This makes SpaceX’s theoretical market value more sensitive to movements in interest rates.
Musk’s vision will require significant external funding and solid execution, and with the entrepreneur controlling around 82% of SpaceX’s voting shares, he is pivotal to the culture and success of the company.
This means that an investment in SpaceX has a higher than usual key man risk element.
Given the company is currently loss making, it is useful to compare how it looks today with what it might become in the future.
What is SpaceX today?
Group revenue for 2025 was $18.7 billion, growing by a third from the prior year. The largest contributor was the ‘connectivity’ division Starlink, which generated revenue of $11.4 billion.
Starlink is the world’s largest LEO (low earth orbit) constellation with 9,600 broadband and mobile satellites, serving more than 12 million customers across 164 countries.
JPMorgan estimates the company has a broadband market share of 3% with the potential to grow its share to 8% by 2030. Starlink is an important cash flow generator for the group and the only profitable part, delivering EBITDA (earnings before interest, depreciation, and amortisation) of $7.2 billion in 2025, equivalent to a margin on sales of 63%.
Rocket launch leadership
Launching satellites is SpaceX’s core competency and a key competitive advantage. Its technological leadership is characterised by rapid reusability and affordability which are unrivalled in the industry.
The company has completed around 670 orbital launches with a 99%-plus success rate, representing more than 80% of all launches into the earth’s orbit since 2023.
SpaceX’s next generation Starship V3 promises to deliver a step change in the technology with a 10-fold improvement in cost combined with a four-fold increase in load capacity compared with the current rocket technology, Falcon 9.
The Falcon business generated revenues of $4.2 billion in 2025, anchored by contracts with NASA (National Aeronautics and Space Administration), national security missions as well as commercial customers. The launch business made a loss of $657 million.
AI infrastructure and data centres
AI infrastructure is the third leg of SpaceX and arguably the most important. It came into existence through the acquisition of Musk’s privately held company xAI, which owns Grok, a large language model which competes with OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini.
Shortly after the IPO, SpaceX announced the $60 billion acquisition of AI coding firm Cursor in an all-stock transaction.
Cursor had been training its models on xAI’s infrastructure, so the purchase was made to get direct control of an enterprise distribution channel for Grok, rather than building one from scratch.
Cursor has more than 50,000 enterprise clients and claims roughly two-thirds of Fortune 500 developer bases use the product.
The AI business posted a loss of $6.4 billion in 2025 on $3.2 billion of revenues.
In summary, the Starlink business is funding the other activities with the launch business nearly at break-even while the AI business is currently heavily loss making.
What could the future SpaceX look like?
JPMorgan analyst Doug Anmuth sums up SpaceX’s ambitions: “SpaceX’s ambitions are bigger than any company’s we’ve ever seen, to build the systems and tech to make life multi-planetary, to leverage the power of the Sun to help build out AI, and to ultimately build bases on the Moon and cities on other planets.”
Analysts at Bank of America believe SpaceX is uniquely positioned as “the only company operating at scale across launch, manufacturing, communications infrastructure, orbital operations, and prospective compute deployment”.
The key to Musk achieving his vision seems inextricably linked to the successful roll out of AI infrastructure which sits at the heart of all SpaceX’s activities.
The company is aiming to tap into the demand for AI data centres and has a target to grow capacity eight-fold by 2028 while also improving the capability of Grok through the integration of Cursor.
From 2029 onwards Anmuth expects SpaceX to build data centres in orbit utilising the rapid rocket launch and reusability capabilities of Starship. Data centres operating in orbit are expected to offer a significant cost advantage over terrestrial-based datacentres.
Space-based datacentres can receive almost continuous direct sunlight in certain orbits, reducing the need for power grids, fossil fuels or large battery systems.
In addition, the cold environment in Space makes it possible to radiate heat away without consuming large quantities of water for cooling, which is a growing challenge for facilities on Earth.
What did SpaceX’ debut quarterly results reveal?
In its first ever quarterly results as a public company released on 4 August, SpaceX revealed an almost doubling of revenues to $7.8 billion and a net loss of $541 million, both ahead of analysts’ estimates.
Starlink connectivity revenues grew 66% to around $4.3 billion, driven by a doubling in the number of subscribers while AI revenue was up 250% year-on-year to $2.6 billion.
The better-than-expected results were overshadowed by ballooning capital expenditures, which jumped to over $18 billion from $2.8 billion, compared with analysts’ forecasts of $13 billion, as the company ploughed $15.8 billion into AI infrastructure.
Investors have become increasingly sceptical about AI spending delivering the expected returns on investment as hyperscalers ramp-up spending in the race to develop the best large language models.
SpaceX shares fell by around 10% after the results to $112, to sit around 20% below the $135 IPO price, and 50% below the highest price of $225.60 reached on 16 June. A subsequent rally helped lift the shares just above the IPO level.
The maiden results trigger the release of 911 million insider-held shares on 6 August, which, if these insiders exercised their ability to sell would roughly double the size of the free-float.
How will growth be funded?
SpaceX’s plans require lots of external funding because the Starlink cash flows are not big enough to fund all the investments required.
Anmuth estimates it will take until 2031 for SpaceX to become cash flow positive while noting that any cost overruns or delays could extend the period of negative free cash flows.
Over the five-year period from 2026 to 2030 Anmuth models $350 billion of negative cash flows, mostly funded by debt. The peak negative free cash flow year is expected to be 2029, when it is forecast to reach $107 billion.
AI hyperscalers often frame the argument for huge capital expenditures on the premise that the risks of not participating in the buildout are higher than not spending and falling behind in the AI race.
Competitors by business segment
Competitors in the Space segment include United Launch Alliance (Lockheed Martin and Boeing), Blue Origin (Jeff Bezos) and Nasdaq-listed Rocket Lab.
In satellites, competitors include Amazon Leo, Eutelsat One Web and AST Space Mobile.
AI frontier model competitors include Alphabet, OpenAI, Anthropic while in cloud and AI data centres SpaceX competes with Amazon, Microsoft and Meta Platforms. Specialist cloud computing operators Nebius and CoreWeave are also competitors given their focus on AI.
As SpaceX moves into chip design and manufacturing it will face competition from Nvidia, AMD and Intel as well as custom AI chip designers Broadcom and Marvell.
TSMC is the largest manufacturer of advanced AI chips, while Samsung and SK Hynix dominate in high bandwidth memory chips.
How big is the AI market?
SpaceX’s estimate for AI’s total addressable market of between $26 trillion to $28.5 trillion suggests there is enough room for a few players to take a meaningful market share, rather than a ‘winner takes all’ outcome.
That said, with so many large well-funded competitors and alternative open-source models vying for superiority, all we can say with any certainty is that there is a wide range of possibilities.
It is worth pointing out that critics consider SpaceX’s projected addressable market as unrealistic.
In his post IPO analysis, New York University professor and valuation expert Aswath Damodaran comments: “If the prospectus is to be believed, SpaceX has the largest total addressable market of any company in history, with a total addressable market of $28 trillion, and AI accounts for $26 trillion of that market estimate.
Damodaran, for his part, estimates a total addressable market of between $3 trillion and $4 trillion.
Will Tesla join the SpaceX fold?
While analysts do not believe a combination with Tesla is imminent, the shared AI ambition of the two companies makes the logic of a merger or takeover compelling.
JPMorgan’s Doug Anmuth offers the following perspective: “A phased/partial combination could de-risk the likely regulatory & governance hurdles and provide a longer runway toward what we think may ultimately be an all but inevitable combination.”
Does SpaceX have direct competitors?
The short answer is no, because of the way SpaceX operates.
SpaceX is vertically integrated which means it controls all aspects of its operations from design and manufacturing through to distribution and sales. Analysts argue that this business model enables the company to build faster and remain cheaper than industry standards.
Over time SpaceX intends to extend its vertical integration to include chip design and manufacturing through the Terafab initiative with Tesla & Intel.
Vertically integrated businesses have strategic advantages beyond the financial benefits (higher margins) such as quality control and pricing power.
These factors mean that SpaceX has few genuine competitors, although it has many competitors in each business segment in which it operates.
Martin Gamble: Shares and Markets Writer
Martin Gamble is Shares and Markets writer at AJ Bell. He was previously the Education Editor of Shares Magazine. He has been with the business since 2019.
Martin graduated from the University of Kent in...
