"Morgan Stanley’s sum-of-the-parts analysis tells a more nuanced story. The “Space” segment, which encompasses Falcon rockets, Dragon capsules, and the Starship program, has been bleeding money. Heavy investment in Starship development drove operating losses in that division, even as SpaceX overall reported a profit of around $8 billion on revenues between $15 and $16 billion in 2025"
In finance and so the world we live in, the value of an equity is less related to the merit of the product than the firm's capacity to generate future free cash flow. Software companies, B2B SaaS in particular, have been basically unbeatable in this regard, hence the state of the market (and our salaries) for the past few decades. Industrial firms have to use metrics like "EBITDA" to show how much cash they'd have to potentially pay to investors if they didn't have to pay so much in interest on their debt, taxes, and fixing up decaying equipment...
But it doesn't make any _money_. Approximately all the ballpoint pens in the world are dependent on a single company, Mikron Group. It has a market capitalisation of about CHF 275.5 million. "We're the only ones who do that" is insufficient; it has to make money. And honestly, generally, "we're the only ones who do that" is a strong sign that a thing doesn't really make much money; if it did, well, other people would do it.
They're treating lift as a cost centre for the $128/share connectivity segment. (X and Grok being worth $12/share is debatable. Enterprise AI being worth $150+ speaks for itself as nonsense.)
"Starting with the reusable rockets, MS expects SpaceX to eat itself. Launch costs will collapse by more than 99 per cent versus their historical average within 10 years, it says. Operating margin on launches will have jumped to about 40 per cent, from around negative 50 per cent currently, but 40 per cent of less than 1 per cent still isn’t very much."
Though as someone (probably JumpCrisscross, can't remember) pointed out a previous time this came up, as SpaceX is selling launch to Starlink, and also own Starlink, which one of the two gets to count as making a profit or a loss is just a matter of preference.
Demand is low. Remove Starlink and look how often they launch. And look at how it has changed over the years. There's a reason they went so hard into Starlink.
Why is it going to be huge? Who are the customers and what do they want?
I don't follow this closely, just look at the pretty pictures. If there's demand for lifting much bigger/heavier things to orbit than presently possible, I would probably not know, for lack of pretty pictures. So please tell.
Starlink will be the biggest customer, at least initially. They're planning on both substantially increasing the number of satellites in the constellation and increasing the size of those satellites. That will keep it in the black for years even in the absence of other work.
I don't understand this attitude. They're progressing steadily on something that's never been done before. They'll almost certainly be launching satellites next calendar year, and at a pretty good clip by Q4.
Don't repeat mistakes of people that were making fun of SpaceX landing rockets before they started to land.
Starship has so much innovation in there, the raptors itself etc.
It launches, it flies, it re-enters and it lands. The engines work. The heat protection work. Even when they push it to the limits by intentionally experimenting with different heat protection, omitting tiles etc. Even when they are in R&D stage.
I believe they can make it work with little refurbishment between flights. Even if all didn't work like they planned, they still have a very, very good vehicle.
I mean something must go off the rails very very badly for the Starship NOT to enter the service.
Space is cool to nerds like me, but what do I really need from it? I've got all the navigation satellites I could want (which I don't pay for) and the best satellite imagery I use is still hyperspectral airborne imagery.
Now, of course that's not the full story but the use cases get rather specific beyond that: the launch market just isn't actually very big (afaik $30 billion a year).
Without doing a google search - optical fibers factories and pharma factories can deliver higher quality products when built in space. And I bet there are hundreds of other examples.
Just because launch costs were high and these weren't viable before, doesn't mean they won't be viable now.
But here is the thing, optical fiber factories in space are unproven and launch cost is only one of the difficulties with it. You need to launch it, and recover it, and then feed it into post processing all for the lower cost then doing it on earth. And even if you capture that market, how big is it?
For pharma, its not universally true. There are few things that can be done better in space, but by far not everything. Research in space makes more sense then actual production. Again even the best case is hard to see how its going to justify the valuation.
> And I bet there are hundreds of other examples.
Hundreds of other even more half baked examples. You need to account for launch cost, space constraints, space environment, landing and recovery. We have been doing this for 40 years and the medicine and fiber are things that have been talked about for 30 years at least.
Fiber optic are currently so cheap that they are being used in expendable, single use applications in the Russia/Ukraine war in spools of 50+km.
You're talking about achieving highly marginal gains in product quality at the expense of having to launch into space literally every single part of the production process and recover it from space.
Which includes things like "ruggedizing what you launch so it can survive the launch" and "also ruggedizing it to survive the landing".
> optical fibers factories and pharma factories can deliver higher quality products when built in space
Those seem like classic examples of what you get when you have a solution in search of problems.
What’s the monetary value of the incremental improvements in those products, and how does it compare to the cost of setting up and operating manufacturing facilities in orbit?
Citation:
"Morgan Stanley’s sum-of-the-parts analysis tells a more nuanced story. The “Space” segment, which encompasses Falcon rockets, Dragon capsules, and the Starship program, has been bleeding money. Heavy investment in Starship development drove operating losses in that division, even as SpaceX overall reported a profit of around $8 billion on revenues between $15 and $16 billion in 2025"
In finance and so the world we live in, the value of an equity is less related to the merit of the product than the firm's capacity to generate future free cash flow. Software companies, B2B SaaS in particular, have been basically unbeatable in this regard, hence the state of the market (and our salaries) for the past few decades. Industrial firms have to use metrics like "EBITDA" to show how much cash they'd have to potentially pay to investors if they didn't have to pay so much in interest on their debt, taxes, and fixing up decaying equipment...
But it doesn't make any _money_. Approximately all the ballpoint pens in the world are dependent on a single company, Mikron Group. It has a market capitalisation of about CHF 275.5 million. "We're the only ones who do that" is insufficient; it has to make money. And honestly, generally, "we're the only ones who do that" is a strong sign that a thing doesn't really make much money; if it did, well, other people would do it.
They're treating lift as a cost centre for the $128/share connectivity segment. (X and Grok being worth $12/share is debatable. Enterprise AI being worth $150+ speaks for itself as nonsense.)
Space lift is not very profitable. The money comes from whatever you actually put in orbit with that lift capacity.
SpaceX’s launch services have huge margins.
Huge negative margins, according to the article:
Though as someone (probably JumpCrisscross, can't remember) pointed out a previous time this came up, as SpaceX is selling launch to Starlink, and also own Starlink, which one of the two gets to count as making a profit or a loss is just a matter of preference.
37 replies →
Demand is low. Remove Starlink and look how often they launch. And look at how it has changed over the years. There's a reason they went so hard into Starlink.
Starship is going to be huge when it's finally operational. It seems like it should be worth more than $8/shr if the potential is accounted properly.
Why is it going to be huge? Who are the customers and what do they want?
I don't follow this closely, just look at the pretty pictures. If there's demand for lifting much bigger/heavier things to orbit than presently possible, I would probably not know, for lack of pretty pictures. So please tell.
Starlink will be the biggest customer, at least initially. They're planning on both substantially increasing the number of satellites in the constellation and increasing the size of those satellites. That will keep it in the black for years even in the absence of other work.
6 replies →
Don’t forget that SpaceX has 3.884 billion outstanding shares!
just like full self driving tm
How is it like full self driving?
I'm thinking of flying over on the Spruce Goose to watch the first operational launch.
> Starship is going to be huge when it's finally operational.
Any day now. Yep, real soon, honest!
I don't understand this attitude. They're progressing steadily on something that's never been done before. They'll almost certainly be launching satellites next calendar year, and at a pretty good clip by Q4.
Don't repeat mistakes of people that were making fun of SpaceX landing rockets before they started to land.
Starship has so much innovation in there, the raptors itself etc.
It launches, it flies, it re-enters and it lands. The engines work. The heat protection work. Even when they push it to the limits by intentionally experimenting with different heat protection, omitting tiles etc. Even when they are in R&D stage.
I believe they can make it work with little refurbishment between flights. Even if all didn't work like they planned, they still have a very, very good vehicle.
I mean something must go off the rails very very badly for the Starship NOT to enter the service.
3 replies →
There just isn't that much demand for space.
Space is cool to nerds like me, but what do I really need from it? I've got all the navigation satellites I could want (which I don't pay for) and the best satellite imagery I use is still hyperspectral airborne imagery.
Now, of course that's not the full story but the use cases get rather specific beyond that: the launch market just isn't actually very big (afaik $30 billion a year).
Without doing a google search - optical fibers factories and pharma factories can deliver higher quality products when built in space. And I bet there are hundreds of other examples.
Just because launch costs were high and these weren't viable before, doesn't mean they won't be viable now.
But here is the thing, optical fiber factories in space are unproven and launch cost is only one of the difficulties with it. You need to launch it, and recover it, and then feed it into post processing all for the lower cost then doing it on earth. And even if you capture that market, how big is it?
For pharma, its not universally true. There are few things that can be done better in space, but by far not everything. Research in space makes more sense then actual production. Again even the best case is hard to see how its going to justify the valuation.
> And I bet there are hundreds of other examples.
Hundreds of other even more half baked examples. You need to account for launch cost, space constraints, space environment, landing and recovery. We have been doing this for 40 years and the medicine and fiber are things that have been talked about for 30 years at least.
Fiber optic are currently so cheap that they are being used in expendable, single use applications in the Russia/Ukraine war in spools of 50+km.
You're talking about achieving highly marginal gains in product quality at the expense of having to launch into space literally every single part of the production process and recover it from space.
Which includes things like "ruggedizing what you launch so it can survive the launch" and "also ruggedizing it to survive the landing".
> optical fibers factories and pharma factories can deliver higher quality products when built in space
Those seem like classic examples of what you get when you have a solution in search of problems.
What’s the monetary value of the incremental improvements in those products, and how does it compare to the cost of setting up and operating manufacturing facilities in orbit?
1 reply →