Since its listing over two months ago, SpaceX (SPCX) has experienced severe stock price volatility. As of Wednesday afternoon, its share price had fallen more than 38% from the all-time high of $225.64 per share set after its public debut. Nevertheless, the core rationale for investors buying the stock is not based on its short-term performance over the next few quarters, but rather on betting on its growth potential through 2028 and beyond. Although SpaceX harbors an ambitious blueprint to build a trillion-dollar space economy, the extent to which this vision can materialize by 2028 remains an open question.
If asked, most ordinary people would guess that the lion’s share of SpaceX’s revenue comes from space launch services, but that is far from the truth. In terms of revenue composition, the company currently looks more like a telecommunications company with an artificial intelligence bet on the side and a rocket launch “side business.” In the second quarter, its “Connectivity” segment—composed primarily of the Starlink satellite internet service—was the only division to generate an operating profit, bringing in $1.6 billion in revenue and single-handedly keeping the company near breakeven, as losses from other segments dragged the overall result into negative territory. By 2028, other business units may become profitable, but their growth rates are still playing catch-up with Starlink—Connectivity revenue grew 32% in the quarter, while Space revenue rose 29%, and the fastest-growing AI business surged 350% year-over-year. At this trajectory, SpaceX may further transform into an AI company over the next few years; of its $18.4 billion in capital expenditures in the second quarter, $15.8 billion was directed toward AI computing infrastructure, clearly signaling the direction on which it relies for future revenue growth. However, all of this massive investment is ultimately aimed at fueling its ultimate ambition in space exploration.
Achieving its grand space goals by 2028 is exceedingly difficult for SpaceX, and a more realistic scenario is that its AI and Connectivity businesses continue to expand healthily. Yet, even if it can maintain its current revenue growth rate of 92%, the stock remains expensive at its current price level. SpaceX currently has a market capitalization of approximately $1.8 trillion. Based on its currently unprofitable status and measured by sales, Wall Street estimates its 2026 revenue at about $44.6 billion, implying a price-to-sales ratio of roughly 41 times. This is an extremely rich valuation; even if the company can easily achieve a 50% profit margin, its forward price-to-earnings ratio would stand at 82 times. Therefore, over the next few years, SpaceX will require tremendous valuation growth to absorb this high multiple, but that may prove difficult to achieve. Taken together, as the market gradually digests its excessive valuation, the company’s stock price may still be hovering around current levels by 2028.
At the same time, the U.S. government is vigorously paving the way for commercial spaceflight. On Thursday, U.S. President Trump signed a memorandum aimed at dramatically increasing the number of commercial launches, targeting at least 1,000 launches per year by 2030 (compared with 178 last year), and directing government agencies to evaluate new launch and reentry sites on federal lands. The memorandum calls for accelerating licensing and environmental review processes, ensuring spectrum availability, and adopting a “commercial-first” approach, with the goal of returning U.S. astronauts to the Moon and establishing an initial lunar base by 2028. The policy also requires that government activities avoid competing with commercial space endeavors, except where public or national security is involved. In May of this year, the Administrator of the Federal Aviation Administration stated that SpaceX’s goal is to reach 10,000 launches per year within five years.
