Key Points
The dust has settled, and Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, has been trading on public markets for a few weeks, with a market value between $1.5 trillion and $2.5 trillion. As of this writing on June 30, the space stock and artificial intelligence (AI) upstart now has a market cap of $2.25 trillion, making it the seventh-most valuable company in the world.
But if you look at the underlying financials, SpaceX is actually much smaller than the other megacap technology companies. Does that make the stock officially overvalued?
Huge growth opportunity ahead of it
SpaceX’s total revenue was just $18.7 billion in 2026, which is significantly below the hundreds of billions in revenue that other trillion-dollar market cap stocks like Alphabet, Microsoft, and Apple generate annually. It generates $4 billion in launch revenue, $11.4 billion from its Starlink satellite internet business, and $3.2 billion in AI services revenue.
However, there is significant promise for these businesses to grow in the years ahead. Starlink revenue grew 50% year over year in 2025, and it has a large addressable market to tackle, along with promised innovations to deliver direct-to-device connectivity in the future. AI revenue should begin to grow rapidly in 2026, with new contracts totaling $27.8 billion in annual revenue for data center services. It just acquired Cursor to compete in the AI coding race, which should boost revenue as well.
Lastly, the massive Starship rocket is getting closer to commercialization, which will not only boost launch revenues but also increase capacity to bring Starlink satellites into orbit.
Risks of relying on AI and satellite internet
While there is a massive opportunity in satellite internet and AI services, SpaceX will be operating in highly competitive fields in the years to come. 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, meaning 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 has many competitors nipping at its heels, such as Amazon, Rocket Lab, and AST SpaceMobile, that are investing billions to deploy their own satellite internet constellations. A long-term addressable market in the hundreds of billions will likely not all flow to SpaceX, despite its current lead in the race.
Is SpaceX stock overvalued?
There is no doubt that SpaceX is tackling massive markets in satellite internet and AI; it’s just that there is massive competition for a business that generated under $20 billion in revenue in 2025. 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, with $9 billion in cash burned in Q1 alone.
SpaceX’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.
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AST SpaceMobile, Alphabet, Amazon, Apple, Microsoft, and Rocket Lab. The Motley Fool has a disclosure policy.
