Morningstar lifted its SpaceX valuation to $70 on launch dominance, Starlink growth, and orbital AI prospects.
- Morningstar analyst Nicolas Owens said SpaceX’s low launch costs, reusable rockets, and strong market share give it a competitive edge.
- The analyst boosted the fair value to $70 from $62.
- Morningstar’s $70 valuation hinges on Starship reuse, while Elon Musk sees SpaceX reaching $1 trillion in revenue by 2028.
SpaceX (SPCX) stock jumped 10% in Wednesday’s premarket as Morningstar raised its fair value estimate to $70 per share from $62 after third-quarter (Q3) earnings, citing Starship reusability and the potential for space-based AI data centers.
SpaceX stock traded 10% higher in Wednesday’s premarket. If the levels hold, the stock will mark its best day since August.
SpaceX’s Launch And Satellite Businesses Support Competitive Edge
Morningstar equity analyst Nicolas Owens said SpaceX has built a strong position in the space industry through lower launch costs and the ability to reuse rockets. The company accounted for 83% of the mass sent into orbit worldwide in 2025, nearly 10 times what its closest competitor launched, according to the analyst.
Its high launch volume also helps reduce average costs and gives it an advantage over rivals such as Jeff Bezos’ Blue Origin. Owens added that the company’s Starlink satellite internet service benefits from this launch infrastructure. With more than 10,000 satellites in orbit, Starlink can deploy additional capacity at an internal cost that is difficult for competitors relying on outside launch providers to match.
Owens estimates that SpaceX’s launch and connectivity operations generate returns on invested capital in the mid-20% range, comfortably exceeding its estimated 9.3% cost of capital.
SpaceX’s AI Adds Opportunity And Uncertainty
According to the analyst, SpaceX is exploring orbital data centers that could use solar power in space to reduce electricity expenses and cooling requirements. The concept relies on Starship, which is designed to carry larger payloads than the company’s existing Falcon rockets.
“AI is growing so much faster than the company that we expect it to represent a majority of revenue by the end of 2026,” said Owens.
However, he said engineers must still provide clarity on radiation protection, heat management, and the availability of enough bandwidth to pass data between satellites and Earth.
The analyst sees cost advantage in AI computing for SpaceX, but does not yet assign the business a clear competitive moat.
Starship Reusability Is Central To SpaceX Valuation
The $70 valuation assumes SpaceX will successfully reuse Starship’s upper stage by late 2028 and conduct several launches each week. Greater reusability could lower launch costs, strengthen Starlink’s economics and make orbital computing more practical.
The analysis values SpaceX’s launch and connectivity operations at $35 per share and its cash holdings at another $7. On Tuesday, CEO Elon Musk said SpaceX could generate $1 trillion in revenue in 2028, two years earlier than his previous estimate. He also suggested annual recurring revenue could reach $500 billion to $1 trillion by the end of 2027.
SPCX Stock: Retail View
On Stocktwits, retail sentiment around the stock jumped to ‘extremely bullish’ from ‘bearish’. The stock saw a 381% surge in message volume over the past 24 hours.
A user said, “161% revenue growth to $14.6B and they are building out planetary-scale compute while everyone else is still figuring out PowerPoint decks. The most badass company on Earth, run by the most relentless leader on the planet.”
SPCX stock has declined 8% year-to-date.
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