SpaceX Went Public: Why Do Markets Care about Space Right Now?

It's Saturday, June thirteenth. Yesterday, SpaceX went public. The stock opened at a hundred and fifty dollars, hit a hundred and seventy six during the day, and closed at a hundred and sixty one, up nineteen percent. The company raised seventy five billion dollars, making it the largest IPO in history. Elon Musk's net worth crossed a trillion dollars, making him the first person to ever reach that number. To put that in perspective, one trillion dollars is roughly the entire annual economic output of the Netherlands. It's more than the federal government spends on Medicare in a year. One person's net worth now exceeds the GDP of most countries on Earth. SpaceX is now the sixth-largest company in America. If you watched the coverage, you heard a lot about Mars, about Starship, about pushing the boundaries of human exploration. And all of that is real. But I kept coming back to a question that the coverage mostly skipped over: why are billionaires so obsessed with space? Musk, Bezos, Branson, they've all poured fortunes into it. Is it because they want to explore the cosmos, or is there something else going on that the public narrative doesn't emphasize? The answer, once you look at where SpaceX actually makes its money, is a lot less romantic than the Mars story and a lot more important. SpaceX has three divisions. The rocket business launches satellites and cargo for NASA, the Pentagon, and commercial customers. It lost $657 million last year. The AI division, xAI, which Musk folded into SpaceX before the IPO, builds the Grok language model and runs X, the platform formerly known as Twitter. It lost $6.36 billion last year. The third division is Starlink, the satellite internet service. It made $4.42 billion in profit last year on roughly eleven billion in revenue. It's projected to hit fifteen to twenty billion in revenue in 2026.

Starlink is the only division that makes money. It's not a side project. It is SpaceX. It accounts for about seventy percent of the company's total revenue. The rockets exist primarily to deploy more Starlink satellites. The Mars ambition exists primarily to justify the rocket development that Starlink needs. When Musk talks about making humanity "multi-planetary," that's a genuine long-term vision. But when SpaceX files its financial statements, the story is simpler: it's an internet company that delivers its infrastructure by rocket.

Here's a number that puts the scale in perspective: as of June 2026, there are about 10,400 Starlink satellites in orbit. That's roughly two thirds of every active satellite circling the Earth, all belonging to one company. SpaceX doesn't just participate in the space economy. It IS most of the space economy. And Starlink's subscriber base has grown from ten thousand users in 2021 to over ten million in 2026, spanning a hundred and sixty countries across all seven continents. That growth rate is faster than almost any infrastructure deployment in history, and the business model, subscriptions that generate recurring revenue at sixty three percent margins, looks less like aerospace and more like a software company that happens to operate in orbit. So why are billionaires obsessed with space? The honest answer is that space isn't really about exploration anymore, at least not primarily. It's about infrastructure, and whoever controls the infrastructure controls what flows through it.

Think about what runs through satellites right now. GPS, which your phone, your car, your delivery apps, and the military all depend on. Weather forecasting, which agriculture and aviation can't function without. Satellite imagery, which intelligence agencies use to track troop movements and governments use to monitor borders. Secure military communications. Missile early warning systems. Every one of these critical systems runs through objects in orbit, and SpaceX is now the dominant way to put objects in orbit.

SpaceX already has significant military and intelligence contracts. The Starshield program, a military-grade version of Starlink, is projected to generate $3.2 billion in 2026. SpaceX holds a $2 billion Pentagon contract under the Golden Dome program to develop satellite-based tracking systems. When Ukraine needed battlefield communications during the Russian invasion, Starlink was what kept their military connected. One company's satellite network became essential to a sovereign nation's defense.

And then something happened that should make everyone pay attention. In 2022, Musk personally decided to limit Starlink's coverage in certain combat zones because he was worried about escalation with Russia. One person, not a general, not a president, not a defense minister, made a unilateral decision about what a sovereign nation's military could and couldn't do on the battlefield. Ukraine's government had no say in it. The decision was reversed after backlash, but the precedent was set: when your military communications run on a private company's infrastructure, the CEO of that company has veto power over your operations. That's not exploration. That's a kind of authority that no private citizen has ever held before.

There's another development that most people haven't noticed yet. Starlink already has about 650 satellites in orbit capable of connecting directly to your phone without a cell tower. No dish. No special equipment. Just your regular phone, connecting to a satellite overhead. The service already has over ten million monthly active users and is projected to hit twenty five million by end of 2026. If Direct-to-Cell works at the scale SpaceX is planning, it doesn't just compete with rural internet providers. It competes with every cellular carrier on Earth. Your phone connecting to a satellite instead of a tower would fundamentally change telecommunications, and one company would control the network.

And it's going further. SpaceX's IPO filings describe plans for space-based data centers, computing infrastructure deployed in orbit. Space has natural advantages for data centers: it's naturally cold, which means free cooling for servers that currently require enormous amounts of energy to keep from overheating on Earth. Solar energy is abundant and uninterrupted by weather or nighttime. As AI computing demands explode and Earth-based power grids strain under the load, putting data centers in space starts looking less like science fiction and more like an engineering problem with a viable timeline. SpaceX has described plans for a constellation of up to one million solar-powered AI data center satellites. The challenges are real, cosmic radiation damages electronics and chips need special hardening to survive, but the company has already proven it can mass-produce and deploy satellites at a pace nobody else can match. All of which brings us to the part that matters if you're thinking about buying the stock: is SpaceX worth what the market says it's worth?

The IPO valued SpaceX at $1.75 trillion. The stock's first-day close pushed the market cap above two trillion. Morningstar, an independent research firm, published a fair value estimate of sixty three dollars per share. The stock closed at a hundred and sixty one. That's two and a half times what their analysts think the company is worth based on current financials.

The valuation works out to roughly ninety four times revenue. For context, Meta went public at twenty two times revenue. Amazon IPO'd at eighteen times. Even the most optimistic tech IPOs of the past two decades didn't come close to ninety four times. For SpaceX's current price to make sense, Morningstar estimates that the company's earnings would need to grow seventy five times from 2025 levels by 2035. That's not impossible for a company with Starlink's growth trajectory, but it requires everything to go right for a very long time.

The xAI merger adds another layer of complexity, and this one is worth slowing down on. In early 2026, Musk took xAI, a company losing $6.36 billion a year with $3.2 billion in revenue, and merged it into SpaceX in an all-stock deal. The merger bumped SpaceX's pre-IPO valuation from $800 billion to $1.25 trillion without adding a dollar of profit. Think about what that actually means: Musk found a way to fund his money-losing AI company by wrapping it inside his popular space company and selling the bundle to the public at a premium. If xAI had tried to IPO on its own, with $6.36 billion in losses and a product that's drawn significant controversy, the reception would have been brutal. Inside SpaceX, those losses get absorbed by Starlink's profits and the investor enthusiasm for the space story. Public investors are now funding xAI whether they realize it or not.

The Uber playbook comparison from our episode a few weeks ago applies here too. Starlink grew its subscriber base by cutting prices, average revenue per user fell eighteen percent between 2023 and 2025 even as the user base quadrupled. Then in May 2026, right before the IPO, SpaceX raised Starlink prices by up to ten dollars a month. The growth phase is ending. The monetization phase is starting. Whether that means sustainable profits or subscriber pushback is the question the market will answer over the next few years.

Buffett, whose approach we covered early in the show's run, would probably look at ninety four times revenue and sit this one out. He's been saying for months that prices for a lot of things will look silly. SpaceX might be one of them. Or it might be the company that builds the infrastructure layer for the next century of human civilization. The distance between those two outcomes is the distance between sixty three dollars and a hundred and sixty one, and right now, the market is betting on the larger number. So if this comes up in conversation, here's how to think about it. SpaceX went public yesterday in the largest IPO in history, raising seventy five billion dollars and making Musk the world's first trillionaire, with a net worth exceeding the GDP of most countries. The story you've been told about SpaceX is about rockets, Mars, and exploration. The actual business is Starlink, which accounts for seventy percent of revenue, is the only profitable division, and now represents two thirds of all active satellites in orbit. The military depends on it. Ukraine's battlefield communications ran on it, until Musk personally decided to limit coverage because he was worried about escalation, a decision no private citizen should have the power to make. Starlink is already connecting phones directly to satellites without cell towers, which could eventually compete with every carrier on Earth. And Musk merged his money-losing AI company into SpaceX right before the IPO, letting public investors fund $6.36 billion in annual AI losses whether they know it or not. Space isn't about adventure for the billionaires funding it. It's about building the infrastructure that communications, military operations, internet access, and AI computing will run through. The exploration story is real. But the infrastructure story is the business. And whoever controls the infrastructure controls what the rest of us depend on.

Stay informed, stay curious, and we'll see you Monday.