Shares of Space Exploration Technologies (SPCX -1.20%), known as SpaceX, trade at a steep premium, and that valuation is built on more than the company launching rockets. A big part of the bull case is Starlink, SpaceX's satellite internet business, which reached 10.3 million subscribers in the first quarter.
Starlink's subscriber base has doubled over the past year. That growth matters because Starlink is the company's most profitable business right now. Those profits can help fund SpaceX's broader ambitions in space and artificial intelligence (AI), which together represent enormous growth potential for the company.
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SpaceX is starving for capital
SpaceX may be best known as Elon Musk's rocket company, but the financial picture looks more like a vertically integrated technology infrastructure business with three operating segments: Connectivity (Starlink), Space, and AI.
In 2025, the company generated $18.6 billion in total revenue and incurred a net loss of $4.9 billion across all segments. Starlink was the only profitable business. The Connectivity segment delivered more than $11 billion in revenue and $4.4 billion in operating profit, providing SpaceX with a meaningful pool of internally generated capital.
SpaceX is directing most of its capital spending toward the AI segment, which may signal where management sees the greatest upside over the next few years. Of the $20.7 billion in capital expenditures last year, $12.7 billion went to the AI segment, which includes xAI (Grok).
The IPO raised $86 billion in new capital, boosting its cash and equivalents to $100 billion as of June 19. It didn't waste time in deploying this fresh capital, recently acquiring Anysphere and its leading enterprise AI coding platform, Cursor. The company is trying to accelerate AI capabilities, even if that means aggressive capital deployment.
That's why Starlink's profitability is strategically valuable, and it's expected to grow quite quickly over the next few years. Goldman Sachs estimates Starlink revenue could reach $144 billion by 2030. If segment margins hold, that would put the connectivity segment's operating profit at over $50 billion -- cash that could materially support SpaceX's plans in space and AI.
NASDAQ: SPCX
Key Data Points
Starlink is one piece of a bigger empire
The long-term value of owning AI models, data centers, communication satellites, and reusable rocket technology under one roof is hard to quantify, since space remains a largely unexplored frontier.
However, SpaceX pegs the combined addressable market across space, connectivity, and AI infrastructure at $28.5 trillion. That helps put the stock's $2 trillion market cap in perspective, but it's still very expensive, trading at roughly 100 times 2025 revenue. To justify that valuation, revenue needs to grow rapidly.
Starlink subscriber growth will be crucial, but investors should watch the AI segment, since that's where the company is investing the most capital. SpaceX recently struck a cloud services deal to lease xAI's data center capacity to Anthropic, in which it will pay SpaceX $1.25 billion per month through May 2029. More deals like this could open another large and growing revenue stream and potentially justify the stock's valuation.
