SpaceX: The Overvalued Giant in the Making

The recent public listing of Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, has left many investors wondering whether the company’s stock is overvalued. With a market value of $2.25 trillion, SpaceX has become the seventh-most valuable company in the world. However, if we take a closer look at the company’s underlying financials, we might be surprised to find that it is actually much smaller than its megacap technology counterparts.

SpaceX’s total revenue in 2026 was $18.7 billion, significantly lower than the hundreds of billions in revenue generated by other trillion-dollar market cap stocks like Alphabet, Microsoft, and Apple. However, the company’s revenue streams are promising, with $4 billion in launch revenue, $11.4 billion from its Starlink satellite internet business, and $3.2 billion in AI services revenue.

The Starlink revenue has grown by 50% year over year in 2025, and it has a large addressable market to tackle. With the promise of delivering direct-to-device connectivity in the future, Starlink has the potential to become a major player in the satellite internet industry. Similarly, the AI revenue is expected to grow rapidly in 2026, with new contracts totaling $27.8 billion in annual revenue for data center services.

Furthermore, the acquisition of Cursor to compete in the AI coding race should boost revenue for the company. The massive Starship rocket is also getting closer to commercialization, which will not only boost launch revenues but also increase capacity to bring Starlink satellites into orbit.

However, there are risks associated with relying on AI and satellite internet. The AI data centers are being aggressively built by many of the megacap technology providers, including a current SpaceX customer, Alphabet. These contracts can be cut at any point with 90 days’ notice, which means that if the overbuilding of data centers eventually occurs, SpaceX’s AI revenue may be in for a world of hurt.

With satellite internet, SpaceX is the dominant player today, but it has many competitors nipping at its heels, such as Amazon, Rocket Lab, and AST SpaceMobile. These companies are investing billions to deploy their own satellite internet constellations, which may not all flow to SpaceX, despite its current lead in the race.

Despite the risks, there is no doubt that SpaceX is tackling massive markets in satellite internet and AI. However, the company now has a rock-solid balance sheet after the largest IPO in history, which will be necessary to aggressively spend to win in these new markets. The company’s consolidated business is also not high margin, with a total gross margin just above 50% in 2025 and a $2.5 billion operating loss.

This is the largest stock by market cap in history that is not profitable. Even if you just value SpaceX on its revenue, the stock currently trades at a price-to-sales ratio (P/S) above 100, which is one of the most extreme revenue multiples in market history. The stock is valued as if it were already doing hundreds of billions in revenue, when that may not happen for a decade or longer.

Unless SpaceX can actually achieve its dream of the space economy and AI within a few years, the stock looks wildly overvalued at a market cap of $2.25 trillion.