Specialty Telecommunications · #7 in the Retail 100

SpaceX

SPCX

Paying for the AI build-out↓Space stocks follow SpaceX↑

Our rating: Not rated
SpaceX has traded publicly only since June 2026, too short a history to judge what investors normally pay for its sales.
12-month target: —
Expected vs. S&P 500: —
Next earnings: Feb 17In 104 daysEarnings calls page ↗

SpaceX's AI business now outsells Starlink, and SpaceX plans to nearly double quarterly spending to $35B to $40B.

Summary

SpaceX launches rockets, runs Starlink satellite internet, and since merging with xAI rents out AI computing from data centers built for xAI. Last quarter the AI business, now called Super Intelligence, overtook Starlink in revenue, helped by the Cursor purchase, but Starlink still earned most of the profit. The stock depends on that AI revenue lasting, since spending is rising fast and many computing rentals can be cancelled on short notice.

$141.33

-$19.62 (-12.19%)Past year

What SpaceX does

SpaceX is the world's leading rocket launcher, mostly flying its own Starlink internet satellites, which earn its profit. Since merging with xAI, it also builds AI data centers and rents them out.^1,30

What it sells

Starlink internet55% of revenue, Q2 2026
Satellite internet for homes, airlines, phone carriers and the U.S. military, with 12 million subscribers. The only unit with an operating profit.
AI33% of revenue, Q2 2026
Renting AI computing to companies like Anthropic, plus the Grok chatbot and X, the former Twitter, which earn subscriptions and ads.
Launches12% of revenue, Q2 2026
Rocket launches for paying customers, including NASA astronauts on Dragon. Starship, a much larger reusable rocket, is still in testing.

Who buys it

Households pay 58% of Starlink revenue, with airlines such as American, phone carriers and the U.S. Space Force paying the rest. In AI, Anthropic's computing contract alone is set at $1.25 billion a month.

Where you've seen it

Wi-Fi on a growing number of Southwest, Virgin Atlantic and Aer Lingus flights runs on Starlink.

The backstory

SpaceX's AI business, the former xAI, lost about $6.4B in 2025 while building huge data centers, and spending keeps growing. It spent $16.4B on capital projects for AI last quarter alone. SpaceX's answer is to rent that computing to outside AI companies, including Anthropic and Google contracts worth about $26B a year.

How the business makes money

Why Starlink's profit is funding SpaceX's AI data centers^{1,6,7,8,11,15,32}

Step 1
Reusable Falcon rockets keep launch costs low, so SpaceX puts up its own satellites cheaply. Starlink runs more than 10,000 of them.
Step 2
Homes, airlines and the military pay for Starlink internet. It earned $2.37B of profit from operations last quarter, most of SpaceX's profit.
Step 3
That cash, plus IPO and bond money, pays for AI data centers. SpaceX spent $48.1B on building and equipment in nine months, against $13.1B of cash from operations.
Step 4
Renting that computing to Anthropic, Google and others makes the data centers pay, but Anthropic can cancel on 90 days' notice.
What shareholders get
The stock is betting that AI rental revenue lasts long enough to earn back the spending.

Advantages

The cheapest launches, owned in-house

Major advantage

SpaceX's biggest advantage. It launches its own satellites at cost on reusable Falcon 9 rockets, while rivals such as Amazon must buy launches, some from SpaceX.^1,11,15,32

Far more satellites than anyone

Strong advantage

A lead no rival is close to. Amazon Leo had just 390 satellites in July and no consumer service.^1,11,32

Building data centers fast

Supporting

Useful, but not proven to last. xAI built its first major Colossus cluster in 122 days in 2024. Google, though, calls its rental short-term bridge capacity.^1,7,8,32

What's changing

Second public quarter: profit arrives, spending jumps

SpaceX merged with xAI in February and listed on June 12 at $135 a share. It closed its $60B-in-stock purchase of Cursor on August 14. On October 20 it reported its first profitable quarter. Musk also said special committees at SpaceX and Tesla are discussing a merger, with no terms agreed. About 1.3B insider shares became eligible for sale around the report, with more unlocks through year-end, including December 8.^{5,7,15,16,17,27,28,29,32,33,34,35}

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with SpaceX (Space Exploration Technologies)
SpaceX (Space Exploration Technologies)this stock	$1.92T	SpaceX is the world's leading rocket launcher, mostly flying its own Starlink internet satellites, which earn its profit. Since merging with xAI, it also builds AI data centers and rents them out.
Amazon (Amazon Leo)AMZN	$2.69T	Amazon's satellite internet network, still being built, pitched as cheaper than Starlink.	Amazon is just starting; Starlink has about 25 times the satellites.¹¹
Rocket LabRKLB	$32.21B	Launches small satellites on dedicated rockets and builds spacecraft; bigger Neutron rocket coming.	The closest U.S.-listed launch rival, but far smaller than SpaceX.¹²
AST SpaceMobileASTS	$15.34B	Builds huge satellites that connect straight to ordinary phones, sold through carriers like AT&T.	AST competes with Starlink's phone service, yet pays SpaceX to launch on Falcon 9.¹³
CoreWeaveCRWV	$30.43B	Rents out Nvidia AI chips by the hour to AI labs and big tech.	CoreWeave has far more AI contracts; SpaceX's AI push is funded by Starlink cash.¹⁴
Blue Origin (private)private	—	Jeff Bezos's rocket company, building the reusable New Glenn heavy rocket.	Both reuse rockets; SpaceX launches and reuses far more often, years ahead.

Leadership

Who runs the company, and how the stock has done under the CEO.

SPCX -15.3%S&P 500 +1.4%Price change since listing in Jun 2026

Elon MuskFounder, CEO, Chief Technical Officer and Chairm…24 yrs, since 2002

Bret JohnsenCFO15 yrs, since 2011

Gwynne ShotwellPresident, COO and Director18 yrs, since 2008

Wall Street on Musk: PositiveSeveral big banks, including Morgan Stanley, started covering it at Buy, and TD Cowen added a Buy on renting out AI computing power. MoffettNathanson rates it a Hold and calls Musk's goal of 100 gigawatts of computing in orbit unrealistic.^L2,L3

Leadership sources (3) · researched Oct 2026

L1Space Exploration Technologies Corp. EU Prospectus (approved by BaFin) · SpaceX, 2026-06-05
L2SpaceX Stock Gets A Chorus Of Buys From Wall Street, But Why One Analyst Sees Downside · Stocktwits, 2026-07-07
L3This SpaceX Analyst Begins Coverage On A Bullish Note; Here Are Top 5 Initiations For Tuesday · Benzinga, 2026-09-29

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Can the AI segment, profitable at $431M last quarter, stay profitable as capital spending rises to $35B to $40B a quarter?^{1,2,6,7,8,9,30,32,33,34,35}

Bull case: why buyers buy

If management is right that new computing pays back in under a year, rentals keep growing, the AI segment's profit rises and Starlink keeps funding the build-out.

The AI business now makes money. It earned a $431M operating profit last quarter, swinging from a loss the quarter before.
Results beat forecasts by a wide margin. Revenue came in about 13% above what analysts expected last quarter.
Starlink keeps growing fast. Its revenue nearly doubled from a year earlier, and revenue per subscriber rose from the prior quarter.
SpaceX has deep cash reserves. It held $89.9B of cash and securities at the end of September.

Bear case: why sellers sell

If computing renters leave or prices fall, SpaceX must fund $35B to $40B a quarter of spending from borrowing, new shares or Starlink profit.

Spending is far outrunning cash. Over nine months, capital spending was nearly four times the cash SpaceX's operations brought in.
Profit got one-time help. About $1.6B of net income came from interest, other income and a tax benefit, and tariff refunds lifted Starlink's margin.
The AI rental income is not locked in. Anthropic can cancel on 90 days' notice, and Google can from January 2027.
Starlink subscriber growth fell short. It ended the quarter below the roughly 14.3M consumer subscribers analysts expected.

What to watch

The numbers that will settle the debate.

AI segment revenue and operating profit▲ improving

$7.56B of revenue last quarter, up 830% ($608M from Cursor); $431M operating profit after $1.2B of Cursor stock pay³²

Shows whether $15.8B a quarter of AI spending earns a return.

Capital spending▼ worsening

$19.6B last quarter, up from $18.4B; $35B to $40B guided for the fourth quarter^32,34

Sets how fast cash goes out and how long the $93.5B cash pile lasts.

Starlink subscribers and revenue per subscriber▲ improving

13.6M consumer subscribers, up from 7.2M a year ago; $69 a month each, up from $66 last quarter but below $83 a year ago³²

Starlink profit funds everything else, so lower prices abroad must be made up by more subscribers.

Next earnings report

Feb 17

In 104 days

Earnings calls page ↗

Expected earnings per share: $0.37
Expected revenue: —

What to listen for: Whether the AI segment stays profitable without one-time help, and how much of the $35B to $40B of capital spending operating cash covers.^19,32,34

What would prove this wrong

✕Anthropic or Google uses its 90-day option to cancel its computing contract.
✕AI spending keeps rising while the AI segment's profit fails to grow through 2027.
✕Starlink revenue per subscriber falls faster than the subscriber count grows.
✕Starship delays push back V3 satellites and the lower launch costs they bring.
✕Insider shares freed for sale keep adding supply and pushing the price down.

Not ratedNo recommendation yet

SpaceX has traded publicly only since June 2026, too short a history to judge what investors normally pay for its sales.

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $136.37

Target $244.06

bull case35% likely

$340.99 +150%

Anthropic and Google keep renting at full rate and more customers sign, so the AI segment's profit grows and sales approach the top of forecasts.

$28.61 sales per share × 11.9 = $340.99

base case45% likely

$226.67 +66%

Rental contracts run and sales match forecasts, but spending of $35B to $40B a quarter keeps profit thin.

$20.93 sales per share × 10.8 = $226.67

bear case20% likely

$113.58 -17%

Anthropic or Google cancels on 90 days' notice, the AI segment's profit disappears, and sales fall well short of forecasts.

$14.18 sales per share × 8 = $113.58

Why these odds: Next-year earnings forecasts rose to $3.19 from $0.65 in 90 days; sales beat by 13% and guidance is 58% above forecasts. No new shares assumed (cash $89.9B). Valuation history is carried over from Oct 5. Cancellable contracts keep the bear case large.

How the prices are built: Wall Street expects sales per share of $20.93 for the year starting a year from now (analysts range from $7.43 to $36.28). Today the stock trades at 13.5 times next year's sales per share; its five-year middle is 21.5. Because sales per share is forecast to grow fast, valuations are cut 30%, since fast growth rarely keeps its price.^{1,6,7,10,19,20,26,32,33,34,35}

What tests the call: Q4 2026 results (date not yet announced) (Feb 16)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 21; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $136.37, SpaceX is cheaper than usual against its own sales

SpaceX trades at 13 times the sales analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's sales. That is cheaper than it has been 80% of the time over the past five years, when the middle was 22.

Analysts expect sales to grow about 107% the year after.

SpaceX multiple: 13×
Its usual multiple: 22×
Base case: +66%
Bear case: −17%

The skewOur bear case loses about 25¢ for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

Q3 2026 results, reported Oct 20

Revenue beat forecasts by about $1.7B and the AI segment turned profitable, but fourth-quarter capital spending is guided to $35B to $40B.^32,33,34,35

Reported Oct 20	Expected	Actual	Difference
Earnings per share	$0.16	$0.35	+118.7%
Revenue	—	—	—

Beat expectations in 2 of the last 2 quarters

Stock reaction: About +6.6% after hours, to $157.59 from a $147.79 close; the Oct 21 close is not yet recorded

Why the stock moved

Up: first-quarter 2027 revenue guidance of $33B to $37B compares with about $22B analysts expected.
Up: AI segment revenue rose 830% to $7.56B and it earned a $431M operating profit.
Up: management said new computing pays back in under a year and kept a $100B annualized revenue goal for December.
Down: fourth-quarter spending guidance of $35B to $40B is nearly double the last quarter's $19.6B.
Also: Musk said SpaceX and Tesla have formed committees to study a merger; no terms are agreed.

What it means for the stock: Strengthened the demand case: rented computing now shows in profit and guidance. The debate is whether $35B to $40B a quarter of spending can be funded without many new shares.