NEXT PICK · Market Insights
2 trillion SpaceX, can a 62x price-to-sales ratio hold up?
Friday, October 23, 2026
The first earnings quarter with 161% growth is real, and deep negative free cash flow and sky-high valuations are also real.
A company posted quarterly revenue of $14.57 billion, a year-on-year surge of 161%, posting its first quarterly net profit of $4.4 billion, yet its stock price plummeted 9% the day after the earnings report—this was SpaceX in late October.
At the close on October 23, the SPCX was at $147.49, a single-day rebound of 1.89%, with a total market capitalization of about $2.00 trillion, while its rolling earnings per share remained at -$1.1. The most commonly used P/E ratio—the most commonly used ruler—failed on it.
With rockets, Starlink, and large models stacked on one company, is the market pricing the future, or is it paying for imagination?
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Latest price
$147.49
▲ +1.89%
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Total market capitalization
$2.00 trillion
— The price-to-sales ratio is 62.53 times
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Q3 revenue
14.57 billion USD
▲ +161%
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One company, three businesses, one vertical chain
SpaceX's business today is split into three segments: Space (reusable rocket launches), Connectivity (low-Earth orbit satellite broadband centered on Starlink), and the officially called Super Intelligence AI segment, which covers Grok large models, consumer and enterprise applications, and computing infrastructure.
What truly surprised people was the reversal in revenue structure. According to 2010-Q3, the AI segment generated $7.56 billion in revenue in Q3, compared to just $810 million a year ago, making it the largest segment; Connectivity contributed $5.25 billion, while the original Space segment had only $1.77 billion.
In other words, the "rocket company" people associate with now derives more than half of its money from computing power.
The report rates its irreplaceability as 8 out of 10, with very specific reasons: Falcon 9, Falcon Heavy, and Starship offer cost and launch frequency advantages that are rare competitors worldwide; Starlink covers over ten million devices, with extremely high network effects and conversion costs; The AI segment integrates from models and applications all the way to computing power.
Moreover, government contracts from the U.S. State Department, Department of Homeland Security, and others are moving from proof-of-concept to scale, and with over 13.5 billion Class A and Class B shares of outstanding equity as the financing foundation, it resembles a digital infrastructure city with its own transmitter, fiber optics, and power plants.
So here's the question
When a company is simultaneously a space agency, telecom operator, and cloud provider, which yardstick should the market measure?
Behind the 62x price-to-sales ratio lies a deeply negative cash flow statement
Almost every valuation snapshot is dazzling
The price-to-sales ratio (P/S) is 62.53 times, the price-to-book ratio (P/B) is 11.33 times, the enterprise value multiple (EV/EBITDA) is as high as 1239.72 times, the return on equity (ROE) is only 1.02%, and the P/E ratio is not meaningful due to rolling losses. The report concludes that it is stretched—valuations are stretched to the max.
The valuation model assumes a reasonable P/S ratio of 30 to 40 times, a reasonable P/B range of 6 to 9 times, and a reasonable range of enterprise value multiples of 200 to 300 times. Based on a price-to-sales ratio of 30 to 40 times, the corresponding market value is only about half to two-thirds of the current value. To maintain the current price, sustained revenue acceleration and profit improvement can only be relied upon.
The cash reserves appear to be quite substantial
As of the end of September, cash and equivalents amounted to $51.294 billion, plus $38.561 billion in tradable securities, totaling about $89.855 billion, while cash at the end of 2025 was only $24.747 billion. Based on this, the report classified cash flow as self_funding (self-sustaining).
But looking at the 10-Q cash flow statement, the picture is less composed: operating cash flow for the first nine months was $13.097 billion, but capital expenditures reached $48.069 billion, free cash flow is a substantial negative figure; Management also expects Q4 quarterly capital expenditure to be $35 to $40 billion.
With nearly $90 billion in cash on hand, is it a moat, or a reservoir being rapidly drained by computing power construction?
The logic chain of the breakout phase and the hesitation on the moving average
The research report classifies SPCX as entering a "breakthrough" phase, with a clear logic: Q3 revenue grew 161% year-on-year, profits turned positive, management provided Q1 2027 revenue guidance of $33 billion to $37 billion, government contracts moving from concept to scale, Starlink covering consumer, enterprise, and government clients, and AI business already has a commercial foundation.
But the signals from the market are more like hesitation
The $147.49 stock price is slightly below the 50-day moving average at $149.12 and slightly above the 200-day moving average at $145.81, indicating weak short-term momentum and the medium-term trend not yet broken. Considering it only went public in June, the sample of long-term moving averages is already limited, and the market's recognition of a "breakout" currently seems more like a wait-and-see rather than confirmation. **
Single-target players besieged full-stack players
The report named four competitors
AST SpaceMobile focuses on direct satellite broadband connectivity and may become a challenger to Starlink, though its scale is still small; Rocket Lab focuses on launching small satellites, creating a mismatched competition with SpaceX in launch frequency.
United's WiFi services directly compete with Starlink on the consumer side, but their coverage is far inferior; CoreWeave focuses on cloud GPU leasing and is the most direct competitor in AI computing infrastructure—while SpaceX's AI division is already its largest source of revenue.
The moat is also rich in layers
A large number of patents for reusable rockets, engines, and launch control systems; The cost of switching terminals and re-certification for Starlink users when switching networks; The network effect of more satellites, denser coverage, and more users; Economies of scale in large-scale mass production of rockets and satellites; And regulatory barriers for government clients preferring suppliers with security certifications and long-term cooperation records.
Most competitors play chess in a single square, while SpaceX puts the entire board at home—the problem is, the cost of full-stack is the capital expenditure of the full stack.
Three large pancakes, the largest one hadn't started eating yet
Research report estimates
The global satellite broadband market size (TAM) is about $200 billion, with Starlink accounting for about 15%, or roughly $30 billion; The rocket launch market is about $20 billion, with SpaceX accounting for about 40%, or roughly $8 billion; The AI infrastructure market is about $500 billion, with a projected compound annual growth rate of about 40% from 2025 to 2027, and SpaceX is still in the early stages here.
The report originally assumed a compound annual revenue growth rate of 150% over the next three years and around $35 billion in 2027 revenue, but management's latest Q1 2027 quarterly guidance already sets the figure at $33 billion to $37 billion, reiterating the goal of achieving $100 billion annualized revenue by the end of 2026. The ceiling is clearly not in transmission and broadband, but in computing power—which is also the most cost-burning area.
Both growth and profitability have already been written into 10-Q
What bulls hold is not a story but actual financial report numbers:
| ▲ Bull Case |
| ① | Q3 revenue was $14.57 billion, up 161% from $5.58 billion in the same period last year, far exceeding market expectations |
| ② | Q2 revenue was $7.81 billion, up about 92% from $4.07 billion in the same period last year, showing an accelerated growth trend |
| ③ | Q3 net profit shifted from -$1.054 billion in the same period last year to $4.4 billion, and operating profit turned from -$273 million to $2.79 billion |
| ④ | Quarter-on-quarter, net profit reversed from Q2 -$541 million and operating profit from -$143 million in a quarter, diluting earnings per share by $0.35 |
| ⑤ | Q1 2027 revenue guidance is $33 billion to $37 billion, about 2.27 to 2.54 times Q3, with management citing pricing as the main driver |
| ⑥ | Management says visibility into the computing power contract pipeline over the next six months will improve and may supplement guidance for business acceleration in 2027 |
| ⑦ | About $63 billion in order backlog, of which about $42 billion is expected to be confirmed within one year |
A profitable quarter cannot carry a trillion-yuan market cap
Bears do not deny growth; they question price versus quality:
| ▼ Bear Case |
| ① | With a price-to-sales ratio of 62.53 times, an enterprise value multiple of 1239.72 times, and an ROE of only 1.02%, the valuation is almost entirely betting on the future |
| ② | Only one positive profit quarter: Q2 net profit was still -$541 million, which is insufficient to prove a stable profit trend |
| ③ | Q3 net profit of $4.4 billion was significantly higher than operating profit of $2.79 billion, with profits containing non-operating components |
| ④ | Capital expenditure for the first nine months was $48.069 billion, far exceeding $13.097 billion in operating cash flow, with another $35 to $40 billion spent in Q4 |
| ⑤ | Recently, a large number of insider-restricted shares were unlocked, and the stock price fell 9.1% the day after the earnings report |
| ⑥ | According to research reports, the market capitalization range of $1.947 trillion to $2.003 trillion shows no positive free cash flow as support |
Guidance fulfilled, Tesla and Starship are a triple variation
In the coming months, SPCX's stock price rhythm will likely be driven by the following types of events: whoever lands first will gain pricing power in the next segment:
| • | Q1 2027 Revenue of $33 to $37 Billion Can Be Fulfilled: Q1 2027, High Impact, Fulfillment Will Confirm Growth Logic |
| • | Additional forward-looking guidance for the computing power contract pipeline over the next six months: high impact, may accelerate the tone for 2027 |
| • | Merge with Tesla: Both parties have established an independent special committee, with no terms yet; Barclays believes or will announce it before December, with moderate impact and undecided direction |
| • | Starship's 15th flight is expected in November, attempting to recover both booster and spacecraft simultaneously: moderate impact, success determines launch timing |
| • | Grok will take on part of Super Intelligence's computing power demand and drive annualized revenue growth: by the end of 2027, with moderate impact |
| • | TeraFab purchases Korean semiconductor equipment and materials: timing not disclosed, impact is limited |
From a $135 IPO to a rollercoaster ride
SpaceX went public on June 12, 2026, at $135 per share, and closed at $211.39 on June 16, then fell backward, hitting a low of $104.83 since listing, and has been hovering around $150 over the past quarter.
On October 20, the Q3 earnings report, combined with Musk's confirmation of merger discussions with Tesla, caused the stock price to surge about 10% the next day, closing at $159.31; However, on the 22nd, concerns over AI capital consumption, new variables in merger negotiations, and the lifting of restricted shares escalated simultaneously, causing the stock price to fall 9.1% to $144.75, only rebounding slightly on the 23rd.
On the fundamental side, the trajectory recorded in the report is also clear: Q2 and Q3 2025 revenue will rise from $4.07 billion to $5.58 billion, with net profits of -$1.008 billion and -$1.054 billion; In Q2 2026, revenue jumped to $7.81 billion but still lost $541 million, and only in Q3 did it truly turn positive. Starlink Global Coverage, AI Deployment, and Government Contract Scaling have been partially delivered, but profit stability and cash flow remain to be verified.
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⚠️ Risk Notice
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🟡 Neutral The turning point between growth and earnings is real, but the gap between valuation and cash flow is equally huge |
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💬 Discussion Trillion-yuan market cap has already been overdrawn and grows ahead of schedule; be cautious when chasing highs; SPCX real-time buy and sell levels, post SPCX on the official account for viewing. |
Data source
| • | Source: NextPick real-time snapshot + company 10-Q and earnings call + SEC announcement + mainstream financial media. |