(Image credit: Getty Images)
SpaceX’s S-1 filing is finally public, and for investors, the biggest mistake would be looking at this company as a rocket launcher.
That is not what SpaceX is anymore.
This is now a vertically integrated infrastructure company sitting at the center of space transportation, global communications, defense, artificial intelligence, compute, data transport and, potentially, chip manufacturing.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
That is why the S-1 filing matters so much. It gives public market investors their first real look at a company that has been private for more than two decades and is now preparing for what could be the largest IPO in history.
The first thing I would tell investors is this: Do not get distracted by the headline valuation alone (about $1.75 trillion to $2 trillion, according to Reuters).
The real question is whether SpaceX is building the infrastructure layer for the next generation of the economy. In my opinion, that is the only way to evaluate this company.
Starlink is still the primary revenue driver
A lot of investors still think of SpaceX through the lens of launches. Falcon 9, Falcon Heavy and Starship get most of the attention because rockets are exciting. But from an investor perspective, Starlink remains one of the most important parts of the story.
The filing shows why. Starlink is not just a satellite internet product. It is global connectivity infrastructure. Residential broadband is one piece of it, but the bigger opportunity is much broader: Enterprise connectivity, government contracts, military communications through Starshield and, eventually, direct-to-cell service.
That last piece is important. SpaceX’s spectrum strategy and direct-to-cell opportunity could eventually put the company in competition with wireless carriers such as AT&T, Verizon and T-Mobile.
It is still early, and investors should not assume that will happen overnight. But the direction is clear. SpaceX is not only trying to connect homes. It is trying to own the infrastructure that connects people, devices, governments and machines anywhere on Earth.
For ultra-high-net-worth investors, that is the point. The opportunity is not simply broadband revenue. The opportunity is platform control.
Governance will be a real concern for institutions
The filing also raises a governance issue that institutional investors will have to wrestle with. SpaceX is using a dual-class share structure, with Class A shares carrying one vote and Class B shares carrying 10 votes. Elon Musk is expected to retain voting control.
For many institutional investors, that is a red flag. They generally do not like one person having that much control over a public company.
I understand that concern. But I also think SpaceX is an unusual case. In a normal public company, this level of control might be a deal breaker. With SpaceX, the market may decide that access matters more than governance.
That does not mean investors should ignore the risk. They should price it in. Musk’s control means investors are not just underwriting the business. They are underwriting his leadership, decision-making and long-term vision.
Personally, I prefer that he maintain control, because this is not a company that can be managed quarter to quarter. SpaceX is attempting projects that require long time horizons, massive capital investment and an unusually high tolerance for failure.
Old-school governance may not fit a company trying to build reusable rockets, orbital data centers and a Mars transportation system at the same time.
The xAI burn is big, but look at the compute revenue
The most obvious financial concern is capital intensity, especially around xAI. The filing shows just how expensive the AI side of the business is. The capital expenditures by xAI are massive, essentially running at a scale that looks like roughly a billion dollars a month.
That will scare some investors. I get it.
But the mistake would be looking only at the burn rate and ignoring the revenue opportunity that compute creates. The Anthropic compute agreement is one of the most important pieces of the filing. SpaceX is effectively monetizing Colossus compute capacity, and that deal generates roughly $1.25 billion per month through 2029.
That changes how investors should look at xAI. Yes, it is capital-intensive. But if the company can turn compute into recurring revenue, the story looks very different.
AI infrastructure is expensive for everyone. The question is who can lower the cost curve over time and control enough infrastructure to turn that spend into a durable business.
That is where SpaceX has a potential advantage.
Starship is the execution risk investors cannot ignore
Starship is crucial to the long-term thesis. If Falcon 9 made space more reusable, Starship could make space scalable.
That matters because almost every major future opportunity depends on lowering launch costs.
- More Starlink satellites
- Larger payloads
- Orbital data centers
- Moon infrastructure
- Mars
- Defense systems
- AI compute in space
Right now, the economics of space-based infrastructure depend heavily on the cost per kilogram to orbit. If SpaceX can bring that cost down meaningfully, the entire business model changes. If it cannot, many of the most ambitious opportunities remain theoretical.
That is why Starship execution is one of the biggest risks in the IPO filing. Investors should watch test flights, FAA approvals, launch cadence and reusability progress closely. A successful Starship program could accelerate nearly every segment of SpaceX. Delays or failures could slow the entire thesis.
The AI story is bigger than Grok
Retail investors may focus on Grok because it is the most visible part of xAI. I do not think that is the right way to look at it.
The bigger AI story is infrastructure: Compute, coding, data centers, chips and distribution. The potential Cursor deal matters because coding is one of the areas where xAI needs to compete more aggressively with Anthropic and OpenAI.
Terafab also matters because chip manufacturing and compute supply are becoming strategic necessities.
The companies that win AI will not just have the best chatbot. They will control the infrastructure that makes AI cheaper, faster and more scalable.
That is why orbital data centers are so important. They are still unproven at scale, and investors should treat them as a high-risk, high-upside part of the thesis. But if SpaceX can make space-based compute cheaper than Earth-based compute, it could change the economics of AI infrastructure entirely.
Unlimited solar power, fewer cooling constraints and no “not in my backyard” data center politics could become a serious advantage. The key word is “could.” It still has to be proven.
The infrastructure thesis investors should understand
SpaceX is not being valued as a rocket company because it is no longer just a rocket company.
The filing makes that very clear. This is now a communications, transportation, AI and infrastructure company all under one roof.
Yes, there are risks.
- Starship still needs to execute
- AI remains extremely capital-intensive
- Regulatory approvals will matter
- Some institutional investors will likely remain uncomfortable with Musk’s level of control
But in my opinion, many investors still are not fully understanding where this company is going. If SpaceX succeeds in scaling Starlink, lowering launch costs and building orbital infrastructure for AI and global connectivity, it becomes very difficult to see who can realistically compete with it.
That is why I believe the market will eventually look back at this IPO as far more than just another technology listing. It could end up being the moment investors realized SpaceX was building the infrastructure backbone for the next generation of the global economy.
