SpaceX Valuation At Risk: Starlink's Performance Under Scrutiny

Forbes

While DOGE dismay has hammered Tesla stock, SpaceX is still flying high with investors as the world’s most valuable private company. But economic realities and the physical limits of beaming internet connectivity from space could puncture the good vibes.  Read the full story on Forbes: https://www.forbes.com/sites/jeremybogaisky/2025/04/09/spacex-starlink-elon-musk/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, Starlink's numbers could bring SpaceX's valuation crashing down.

00:08Settling other planets isn't going to be cheap. That's why Elon Musk, after setting out to

00:13develop lower-cost rockets at SpaceX, decided to make money with them by launching a satellite

00:18network called Starlink to sell broadband internet access to ruralites. Writing on his

00:25social network X last year, he said, quote, Starlink is how we are paying for humanity to get to Mars.

00:33Starlink's progress has been stunning. In March, less than five years after starting service,

00:39it reached five million customers, more than doubling the market of the previous satellite

00:44communications incumbents, Viasat and Hughes, at their height. Sunny expectations for Starlink

00:52are one of the main reasons investors have been eager to pump money into SpaceX.

00:57Its valuation hit 350 billion dollars in December in a sale of insider shares,

01:03making it the most valuable private company in the world.

01:06That valuation has largely held steady on secondary markets this year, even as shares in Musk's

01:12electric car maker Tesla have plummeted 55 percent from a record high reached in mid-December amid

01:18faltering sales and public fury over Musk's role in the Trump administration and embrace of right-wing

01:24nationalists in Europe. On Wednesday, shares of Tesla surged 22 percent after President Trump

01:31suddenly announced a pause in most reciprocal tariffs for 90 days. By market close Thursday,

01:37shares had dropped back down 7 percent for the day. But even with a relatively steady valuation amid

01:43Tesla's troubles, some fear SpaceX, too, could face a reckoning, with the upside for Starlink not as high

01:50as investors seem to be betting. As with Tesla, it's partly a question of how much they're buying into

01:56Musk's grand vision and their willingness to overlook financials. Independent telecom consultant Tim Farrar

02:04told Forbes, quote, I don't think that Starlink alone as it exists today and the reasonable view of

02:10its future growth is going to support that sort of valuation. Rockets may be exciting, but the market

02:17for launching cargo into space isn't huge, between $10 billion and $15 billion a year. Profits aren't

02:24great either. Telecom, however, is another story. With Starlink, SpaceX is angling for a share of a market

02:32worth over $1 trillion a year. SpaceX has rapidly built a constellation of 7,100 satellites in low

02:40Earth orbit, 62 percent of all active spacecraft circling the planet, according to Harvard Space

02:46Watcher Jonathan McDowell. Starlink is making money from them by offering internet access to airplanes

02:53and ships and peddling a military version called Starshield, enhanced with secure communications and

02:59surveillance capabilities. It's also competing with companies like AST Space Mobile and Global Star

03:06to enable emergency cell phone service in remote dead zones. But its biggest opportunity by far is in

03:13high-speed residential internet access, a market that the research firm Quilty Space expects to account

03:19for 63 percent of Starlink revenue this year. SpaceX doesn't share financials, but Chris Quilty,

03:26founder of Quilty Space, estimates Starlink is on track to grow revenue 58 percent in 2025

03:33to $12.3 billion, making it one of the fastest businesses to hit the 11-figure mark.

03:40Morgan Stanley analysts, led by long-time Tesla bull Adam Jonas, believe much greater heights are ahead.

03:47They're projecting that in 2030, SpaceX will pile up $65 billion in revenue and $16 billion in net income,

03:55with Starlink accounting for 72 percent and 82 percent, respectively.

04:01They've also argued that SpaceX's growth prospects through 2026 could justify a valuation as much as

04:07double the current $350 billion, when looking at the multiples investors have given large,

04:13fast-growing public companies like Adobe and Intuitive Surgical.

04:17But those bullish vibes ignore some of the hard ceilings Starlink faces. Its satellites simply

04:24aren't capable of serving many internet customers in densely populated areas. And in rural regions,

04:30the population that can afford to pay its high prices is limited. Starlink has yet to launch in

04:36many countries in Africa and Asia, but the wealth disparities there are worse than in most of the

04:41markets it's currently serving. And in richer countries where it's able to charge higher prices,

04:46there may not be much room left to expand. Meanwhile, competing services are on the launch pad,

04:53including from rival billionaire Jeff Bezos' Amazon. For full coverage, check out Jeremy Bogasky's piece

05:01on Forbes.com. This is Kieran Meadows from Forbes. Thanks for tuning in.

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