"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 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?
"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.
This is my industry I know it well, apparently much better than these bozos. SpaceX launch is only “unprofitable” only in the accounting sense because they reinvest their profits into Starship. Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.
There is literally no competition worth speaking of, and nobody to provide downward price pressure. SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices.
And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
China (and others, e.g. Blue Origin and Rocket Lab) are rushing to catch up to where SoaceX was 10 years ago. They are moving faster than anyone in aerospace has ever moved before, but SpaceX is still accelerating faster than that. By the time they catch up, the game will have again changed.
SpaceX and NVIDIA share this trait. They out-innovate, and know only one speed: the speed of light. The tortoise can only beat the hare if the hare takes a nap, and nobody is napping at SpaceX.
I’m not a fanboy. I have criticisms of SpaceX. But you are pattern matching to the common story of startups getting complacent and being surpassed by up-comers in China and elsewhere. But the innovators dilemma only applies if the innovator stops innovating. Two decades on, SoaceX is still innovating as much as they always have.
You clearly don't know the market. China is no competition just on geopolitical terms. And I am very aware of the competition and have followed each competitor basically since its founding. It will take many years before competitors will be fully read and even then their launch rates will be tiny in comparison. And by then SpaceX will have moved on.
But of course this is all dwarfed by AI stuff financially so its basically irrelevant. SpaceX could stop all launch sales tomorrow with zero impact on its financials.
How far ahead is SpaceX compared to the competition, a decade? More? Less? Is the gap closing or growing?
> Their actual profit margin for launch of F9 is 62% - 80% depending on configuration. That is a margin unheard of in aerospace.
Do you expect they maintain these margins on launch and whatever services they deliver from space as that gap is closing? Is their first mover advantage practically unassailable because it's in space? Tesla built the EV market and are having their lunch eaten by the competition.
The rest of the industry is about 10 years beyond SpaceX. But note that they are where SpaceX was a decade ago, which is not the same thing as “in 10 years they will catch up.” The gap is getting larger year by year, not smaller.
> And if you think, as Morgan Stanley seems to, that the only money to be made in space is selling launch of earth orbiting satellites, you’re going to miss out on the boom that is going to make the first quadrillionaire.
I was with you up to this point.
Quadrillionaire? Seriously? On species-wide economy of 0.1Q/year? On a timescale short enough that SpaceX remains a coherent entity and you don't have to account for things like the sum-total risk of nuclear war? Or even just of Musk dying of old age given he's 55?
The material wealth of the Earth is only a small, small fraction of the accessible material in the inner solar system, let alone the universe.
Starship fundamentally changes the game in ways people aren’t paying attention to because it pattern matches to sci-fi. But the economics are real: power and material far beyond what is available on Earth, on many cases at lower marginal price than terrestrial sources, and 1000x to 100000x reserves.
> SpaceX started moving into their own constellations because lower prices open up new markets, and this lets them access those markets without having to lower launch prices
the alternate take here is that even at current prices, falcon 9 is more than capable of completely filling space demand which makes building a >10x bigger vehicle seem kind of dumb
I think the main idea for starship is fully reusable ( which falcon 9 isn’t) and much larger capacity (both volume and mass). Driving down the cost of getting mass to orbit.
I googled and got the following costs per kg to orbit
Falcon approx $3000 / kg
Starship (early) $600 / kg
Starship (target) $ 100 / kg
If they can achieve the target, it’s transformative. The Chinese will follow the lead and be available for some commercial customers but the majority of the market will be SpaceX.
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.
In that scenario, most of the value would be in Starlink.
Launch vehicles have always been the cheap part in going to space. Payloads tend to be more expensive, and the actual value is in the services enabled by the payloads.
The revenue is in Starlink, sure, but the value is in the launcher.
The reason payloads are expensive is because launch was expensive. If you're paying $10k/kg to launch your satellite you have to make sure it has a 99.9999999% chance of working when it gets to orbit. But if you lived in a world where you pay $10/kg for that same launch and could schedule another launch the next day to replace a payload that didn't work, your satellite would be much cheaper because you could afford to have it fail.
It would also be cheaper because you could afford more standardization. You could afford to use a standard bus, for example, even if it makes your satellite heavier than it needs to be.
There's a virtuous circle here. Cheaper launches mean cheaper satellites, and cheaper satellites mean more launches as previously un-economic activities start to pencil out.
Payloads are expensive, because high-value businesses can outbid low-value ones. By the time there is enough launch capacity for low-value businesses, manufacturing improvements should have made launch vehicles even cheaper.
Or you could look at this from another perspective. The services enabled by infrastructure must be more valuable than the infrastructure itself to justify the investment.
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.
Falcon 9 has easily enough market launching commercial satellites to keep it flying outside of Starlink. It's the most efficient launcher in the world from a cost perspective. Falcon 9 was making money before Starlink existed.
"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"