SpaceX’s (SPCX) valuation is expected to be gargantuan, and there appears to be only two ways that the company will be able to generate the profits necessary to reward those who hold its shares over the long term.
Specifically, SpaceX stock is only likely to perform well in the coming years if it can develop highly successful space-based data centers and/or it is able to benefit tremendously from Tesla’s (TSLA) innovations in the autonomous-driving and autonomous-robotics spaces.
The shares are expected to start trading on the Nasdaq exchange on June 12.
A Tremendous Valuation
SpaceX wants to achieve a total valuation of $1.75 trillion, while its 2025 revenue came in at $18.67 billion. That would equate to a trailing price-sales ratio of 93.7 times. The firm’s operating loss came in at $2.58 billion last year, but it reported $20.7 billion of capital spending. Its gross profit was $9.2 billion.
Iin order to generate the type of profits and free cash flow usually associated with a valuation of $1.75 trillion, SpaceX will have to find a way to increase its revenue and gross profit by many hundreds of billions of dollars annually.
For example, Amazon (AMZN), which has a market capitalization of $2.865 trillion, in 2025 generated $716.9 billion of revenue, a gross profit of $360.5 billion, operating income of nearly $80 billion, and free cash flow of $7.7 billion, despite its own huge investments in AI.
SpaceX’s revenue generating businesses
SpaceX’s two main revenue-generating businesses are its core space-rocket unit and its Starlink internet service.
The rocket business is very impressive, as it carried out 170 launches in 2025 and placed over 80% of global payloads, by weight in orbit.
But SpaceX itself says that space’s total addressable market is a relatively low $370 billion, and many other firms, such as Rocket Lab (RKLB), ViaSat (VSAT), Intuitive Machines (LUNR), and Jeff Bezos’ Blue Origin appear to be meaningfully stepping up their games in the sector.
SpaceX’s other main revenue-generating business is Starlink, the firm’s satellite-based internet unit. But after several years in business, Starlink racked up a total of 10.3 million subscribers, and it appears to be trailing AST Spacemobile in the direct-to-cell market. Further, Amazon is about to become a competitor for Starlink.
Both the space sector and the satellite-based internet sector have many years of growth ahead of them, and SpaceX’s rocket unit and Starlink should expand significantly in the coming years. Still, they don’t look poised to generate hundreds of billions of dollars of revenue and gross profits annually within the next decade.
Space-Based Data Centers and Tesla’s AI Efforts
Launching space-based data centers and supporting Tesla’s AI initiatives, on the other hand, could theoretically generate the types of profits needed to make SPCX stock a big long-term winner.
If the space-based data centers that the conglomerate is planning to build can be launched much faster than those on Earth and can provide service much more cheaply than the current ones, SpaceX, as one of the pioneers of the concept, would indeed be well-positioned to generate many hundreds of billions of dollars of annual revenue from them, since the demand for data centers is so huge.
Tesla has invested $2 billion in xAI which in turn was acquired by SpaceX. Further, Tesla is using xAI’s chatbot in its vehicles, and xAI’s models are expected to become the “brains” of Tesla’s humanoid robots.
So to the extent that Tesla’s AI businesses boom, its demand for SpaceX’s products can jump. And if xAI’s systems work well for Tesla, many other firms could seek to use them. Eventually, if this scenario materializes, SpaceX’s AI business could become huge.
The Problems With the Bullish Thesis
Orbital data centers still face substantial technical and operational hurdles, including cooling systems in the vacuum of space, hardware maintenance and upgrades, launch logistics, and long-term exposure to cosmic radiation. While companies like SpaceX have demonstrated an ability to move ambitious projects forward quickly, many of these challenges remain largely unproven at commercial scale. Tesla’s experience with products like robotaxis and the Cybertruck also illustrates how difficult it can be to bring cutting-edge technologies from concept to reliable mass deployment. Meanwhile, in the satellite-to-cell market, competitors such as AST SpaceMobile appear to have established strong momentum through partnerships and differentiated technology.
Taken together, these factors suggest investors should approach SpaceX’s enormous expected valuation with a balanced perspective. SpaceX has undeniable strengths in launch capability, innovation, and execution, but success in areas like AI infrastructure or orbital data centers is still far from certain. As with any frontier technology market, long-term leadership will likely depend not only on vision, but also on the ability to consistently solve difficult engineering, operational, and commercial challenges at scale.
*This article is intended to be informational only; it is not financial advice.
