To The Moon

$SpaceX(SPCX)$ has had a volatile first month as a publicly traded company. Its share price rose to as much as $225, but as of writing, it has sunk back near its $135 IPO price, currently trading just $1 above it. Opinions on SpaceX's prospects are divided. The bulls will argue that, given its large addressable market and leadership in core markets, including space travel and satellite-based internet services, the stock could produce outstanding returns over the long run.

The bears will point out that SpaceX remains unprofitable, and its financial results and outlook hardly justify a $1.8 trillion valuation. Time will tell who is right, but recent news from the company was a bit of a win for the bulls. Let's look into these recent developments and what they could mean for the stock.

Starlink could become a bigger growth engine

First, let's briefly review SpaceX's Starlink, which is currently its most profitable business. It offers high-speed internet through a network of Low Earth Orbit (LEO) satellites, with speeds ranging from 100 Mbps (megabits per second) to over 400 Mbps. This isn't the fastest speed, not by a long shot. Fiber internet is much faster, with some legacy providers offering speeds well above 1000 Mbps.

Some customers still opt for Starlink right now because they live in rural and other traditionally underserved areas. However, SpaceX wants Starlink to be more mainstream. The company recently filed a request with the U.S. Federal Communications Commission to deploy up to 100,000 of its new Gen3 Starlink satellites.

There are several things to note about this proposal. Let's focus on two. First, Starlink currently has a bit over 10,400 satellites in orbit -- so 100,000 would be a substantial increase. With far more satellites in space, Starlink's internet speeds could improve dramatically. Second, SpaceX wants to launch this constellation in very low Earth orbit, rather than the LEO satellites it currently operates.

This is another factor that would boost speed. SpaceX isn't shy about its ambitions here. The company is looking to build a network of satellites that could handle the majority of the world's internet traffic.

SpaceX has some things to address first

This is an ambitious proposal, but there are several problems. One is that, given how quickly SpaceX currently builds Starlink satellites, it will take a long time to manufacture 100,000 of them, let alone launch them into space. The company produced an average of 70 satellites per week at its Redmond, Washington facility between December 2025 and April 2026.

That's just 3,640 annually. At that pace, it will take over 27 years to make 100,000 of them. SpaceX will have to significantly expand its manufacturing capacity to reach its ambitious goals. Also, while SpaceX uses its partially reusable Falcon 9 rockets to launch its V2 Starlink satellites into space as of now -- with the rocket capable of carrying up to 29 per trip -- the Gen3 Starlink satellites are much bigger. That's another reason why SpaceX developed Starship, a next-gen, fully reusable rocket with a much bigger payload capacity.

Starship is still in the flight-test phase, but it is clearly central to SpaceX's future, including its space travel ambitions and its ability to substantially expand Starlink's reach.

Is the stock a buy?

Improving and expanding its Starlink business could make SpaceX a much more profitable company in the long run, but it still needs regulatory approval for its constellation of 100,000 satellites. And then it will have to figure out the logistics of getting them into space in a reasonable time frame. These aren't insurmountable issues, but the company could encounter setbacks, launch delays, or other potential headwinds with its plans. Investors need to factor all that in.

Further, several other companies are working hard to compete with SpaceX's Starlink (and other business segments, for that matter). SpaceX might be the runaway leader right now -- no company has nearly as many satellites in orbit -- but that could change in the long run. So, although the bulls are right that SpaceX's opportunities are massive, there is plenty of risk as well, and my view is that the stock is a buy, but at a much lower price. That's why I'd wait for a steeper pullback before initiating a position.