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Where to now for SpaceX

The SpaceX IPO was met with people shouting "take my money".

In fact the demand was so great that, within days, the price of SpaceX stock shot up to over $200 from its $135 initial price.

I mean, what could go wrong?

This is a multi-faceted company that has lead the world in a range of hi-tech marketplaces such as rockets, the most capable orbiting internet service ever built and state of the art AI services.

All of this being driven by the company's charismatic leader, Elon Musk.

Unfortunately...

Despite the good news, SpaceX shares plunged within weeks to within just 50 percent of their post-IPO high.

To be fair however, they have since regained ground and as at the time I write this colum, now sit just $2.50 short of that IPO price.

The big question on everyone's mind however, is where to from here?

Will Elon Musk continue to be granted the multitude of special privileges that have seen him attain the status of world's richest man, thus ensuring SpaceX continues to thrive and its shares grow in value?

I've seen predictions that SpaceX stock could top $900 in the next few years and if that happens, early investors will be laughing all the way to the bank.

However, there are also a lot of things that could go wrong, very wrong.

As mentioned previously in this column, SpaceX may appear to be a rocket company but the real cash-cow is its Starlink satellite-based internet service. With a huge margin, Starlink generated US$11.4 billion in revenue for a profit of US$4.4 billion in the 2025 financial year.

If you think that's good, apparently revenues look to be up during the first quarter of 2026, with expectations that profits will increase accordingly.

I find it amazing that authorities have decided to effectively inflict huge pain on ground-based astronomers and other scientists who rely on a clear, unobstructed view of the sky, simply in order that Elon can stuff his pockets with cash. What a privileged position to be in.

The reality is that regulators were caught off guard and likely never figured that we'd end up with over 10,000 Starlink satellites in orbit and companies such as Amazon planning to do the same.

Will they alter regulations and treaties to prevent even more of this?

Unfortunately for SpaceX investors, the answer is probably "no". The US government claims to be committed to fostering competition in this marketspace -- but hold my beer because I would not be surprised of Musk starts siding with the scientists and claiming that for other (competing) companies to do the same would be a disaster for ground-based astronomy. With Starlink also providing the Starshield military and defense service via its satellites, they likely also have a lot of leverage to demand exclusivity at some stage.

SpaceX is now talking about extending its Starlink-based services to include cellular connectivity although I suspect it's not going to be exactly as most imagine it to be. It would be highly impractical to create a global cellphone network using orbiting satellites, there are simply too many concurrent calls for such a network to handle. More likely, if they go ahead, SpaceX will rely heavily on terrestrial cell sites which may be interconnected by satellite backbones. If this is the case then I don't see how they can offer much competitive advantage over existing cellular providers, relegating them to the position of "also ran" rather than market leader.

The real vulnerability for SpaceX right now has to be their huge investment in the AI marketplace.

XAI is currently spending US$15.8 billion per quarter on developing AI infrastructure. That represents 86 percent of its entire capital spend and is nearly four times the profits that Starlink generates.

With the US investment sector becoming ever more exposed to the AI sector, it's beginning to appear as if a bursting or even mild deflation of the AI bubble could have dramatic consequences and SpaceX would be hugely vulnerable.

Finally, for those who think that SpaceX's launch capabilities will come to the rescue, it's worth remembering that Starship is soaking up huge amounts of money and has so far massively failed to deliver on the promises made for it.

So, is that investment in SpaceX stock a sound one?

Well I'm no financial adviser or highly insightful commentator in such issues but I would have to say that I might be tempted to spend half the money on lotto tickets. Either way, you might win big but you might also lose your shirt.

Carpe Diem folks!

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