As of today, SpaceX is owned by investors who will expect it to generate profits.
Space Exploration Technologies, commonly referred to as SpaceX, became a publicly listed company on Friday, nearly 25 years after its founding.
The company began trading on the NASDAQ exchange in New York City at $135 per share, giving SpaceX a valuation of approximately $1.8 trillion. By the close of the trading session, the company’s shares were priced at $160.95, marking a solid gain of more than 19 percent.
On paper, SpaceX founder Elon Musk became the world’s first trillionaire, with his personal ownership stake in the firm valued at over $700 billion. Thanks to the company’s stock options program, thousands of current and former employees became instant millionaires. Employees at SpaceX have put in tremendous effort over the past 24 years, and they will now be handsomely rewarded for their work.
SpaceX now ranks among a select group of the most valuable companies globally. Is that justified? There is considerable debate over whether SpaceX represents fool’s gold with its lofty valuation or a valuable chance to finally own a stake in a dominant space firm that could eventually manage data center operations in orbit.
SpaceX is now largely an AI company
One thing is certain: SpaceX is now subject to significant public reporting requirements, and it will operate much more of its business in the open. While Musk retains complete control over ownership and voting rights, he will now be accountable to shareholders in a critical way: the performance of his company’s stock.
Most shareholders purchased SpaceX stock today not to support the company’s long-term goal of colonizing Mars or to assist NASA in landing humans on the Moon. Certainly, some space enthusiasts did. However, the majority of people invest in stocks to earn returns.
As SpaceX made clear in its S-1 filing submitted in May, however, the company’s worth does not stem from its “space-enabled solutions” or its Starlink satellite internet network. As part of its “total addressable market,” the company views these as accounting for less than 7 percent of its value.
Instead, Musk and SpaceX see the bulk of its value in providing AI services, primarily from space, and mainly for enterprise uses. If investors agree that this is where the vast majority of the company’s profits lie, that is where they will want SpaceX to focus its time and resources.
So as of today, SpaceX is owned by investors who largely want to see it turn a profit; to achieve its enormous valuation, it must generate that profit through orbital data centers. This is a sobering reality for NASA, which was the company’s most critical backer during its early years when bankruptcy was a constant threat.
Even a decade ago, most of SpaceX’s contract value came from NASA and other U.S. government entities. Since then, however, revenue from Starlink has begun to far exceed NASA’s contracts, and this trend is likely to continue in the future.
How much of a priority is Artemis?
NASA relies on SpaceX for so much right now: transporting its astronauts and most important scientific payloads to space, and playing a key role in the Artemis campaign. But the $2.9 billion contract NASA awarded SpaceX in 2021 to develop a Human Landing System for the lunar program is now frequently overshadowed by the AI computing contracts SpaceX is signing with companies like Anthropic and Google, which are worth tens of billions of dollars.
For SpaceX, the money (at least in the short term) lies in AI—not in NASA government contracts. Yet NASA is eager for SpaceX to start delivering on critical milestones for the Artemis program in the coming months and to develop the capability to land humans on the Moon.
Central to all of NASA’s work is the massive Starship rocket and how SpaceX will prioritize its further development. The large rocket appears close to reaching operational status, with the ability to place about 100 metric tons into low-Earth orbit. Assuming that happens in the coming months, how will SpaceX use its Starship launches? Will it focus its efforts on preparing and executing a crucial refueling demonstration in orbit, which will require consecutive Starship launches? Will it fill a lander prototype next year, which would involve a dozen or more tanker flights just to enable an uncrewed lunar landing test for NASA?
Or will the company concentrate on launching profit-generating Starlink satellites into orbit, followed by key tests of data center satellites? In short, will it follow the money?
This is a legitimate question, because investors will be monitoring closely.