My Problem with SpaceX
Contributed Opinion

1. As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of Tesla and Amazon.
2. Stephen McBride: I, or members of my immediate household or family, own securities of: None. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.
3. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found  below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

For additional disclosures, please click here.

Two decades back, SpaceX was a fledgling venture that couldn't stop its rockets from blowing apart.

Now it's behind 86% of every orbital launch in the US. It created Starlink, the planet's biggest satellite internet network, starting from nothing. And after picking up xAI, it ranks among the largest artificial intelligence (AI) firms anywhere on Earth.

This coming Friday, it will be listed publicly in what will be the biggest IPO ever recorded, aiming to pull in $75 billion at a $1.75 trillion valuation.

Millions of buyers will at last get their chance to hold a slice of it.

So today is the day to figure out whether SpaceX earns that record-breaking valuation… and whether you ought to grab the stock on Day 1.

Let's start with the good news.

SpaceX is the most consequential company in America right now. It's the Roger Bannister of inventors.

For ages, we believed nobody could run a mile in under four minutes. Then Roger Bannister pulled it off in 1954, and an odd thing followed. More than 40 runners cleared the same mark within the next handful of years.

The wall was never about the body. It lived in the mind.

By turning rockets into reusable machines and sending the heaviest-ever flying object — north of 5,000 tons — into orbit, SpaceX proved that genuinely hard feats in the physical world are achievable.

SpaceX also stood up Starlink, delivering fast internet to far-flung villages… vessels crossing open water… aircraft… and other spots that legacy telecom firms never bothered to serve.

It rapidly assembled two of the planet's biggest AI clusters — Colossus and Colossus II — through its xAI arm.

And SpaceX is positioned to open up space ventures that don't even exist yet. Should it pull off its scheme to build orbital data centers that feed compute to AI, it could be worth many times what it's valued at now.

The catch? Starlink is the only piece that turns a profit.

Starlink was wildly profitable in 2025, generating billions in operating earnings. But SpaceX, taken as a whole, recorded a net loss of roughly $4.9 billion. The opening quarter of 2026 delivered yet another net loss, somewhere near $4.3 billion.

At the same time, our in-house Real Cash Flow gauge pegged SpaceX at about negative $10 billion for 2025.

What's driving the steep losses: massive capital spending (or CapEx) to stand up AI infrastructure and Starship, its enormous next-generation rocket. SpaceX's CapEx reached roughly $20.7 billion in 2025.

That spending is by design. SpaceX's losses right now are deliberate—arguably even a good sign.

The firm produces positive cash flow from its operations. And once you set aside the aggressive growth spending, the business actually made money in 2025, clearing around $6.6 billion.

Put another way, this is a company purposely laying out huge sums now to construct something far larger later. My view is that these wagers will work out.

However…

It breaks one of the bedrock principles of our Disruption Investor advisory.

We back only profitable companies.

SpaceX doesn't clear that bar.

Now, if you've studied the history of disruption investing, you might be puzzled.

Because some of the most legendary disruptors ever ran precisely this "grow now, profit later" strategy.

Both Amazon.com Inc. (AMZN:NASDAQ) and Tesla Inc. (TSLA:NASDAQ)poured every dollar of profit — and then some — straight back into their operations during their early years, "intentionally" running losses to build toward what was coming.

Each stock rose more than 10,000%. Whether or not they were profitable hardly registered.

The distinction is that Tesla and Amazon were still tiny at that stage. Amazon shifted to dependable profitability in the early to mid-2000s, when it carried a value of $10 billion to $15 billion.

That's under 1/100th of what SpaceX is worth today!

Spot the issue? I believe SpaceX will come out on top. But it's already priced as though the victory is in the bag.

At a roughly $1.75 trillion valuation against $18.7 billion in 2025 revenue, owning the stock means shelling out close to 100X sales.

By way of contrast, the AI firm Anthropic changes hands on private markets at something nearer to 20X sales — and it's expanding far quicker than SpaceX. Granted, Anthropic is the fastest-growing company of its scale in history. It's slated to go public this year as well.

Elon's record is remarkable. And having sat down with a number of SpaceX engineers, I'm convinced the company will reach its sweeping goals.

But when the bar is set this high, a measure of letdown is nearly guaranteed.

So we hold off.

That isn't the same as tuning SpaceX out.

We'll keep a close eye on how it develops over the coming quarters. In particular, three things stand out that could turn SPCX into a buy.

They are:

1. Starship demonstrating it's a genuine workhorse.
2. Starlink's expansion picking up even more speed—with its subscriber count climbing toward 20 million or beyond.
3. Grok winning over both consumers and businesses, paired with richer deals to lease out AI compute.

If you want to track these markers alongside us, one of the simplest routes is to subscribe to my free investing newsletter, The Jolt.

In The Jolt, we cover everything tied to disruption investing, and we'll have plenty more to share on SpaceX once its IPO is underway.

Join here.