SpaceX's Monster Quarter Points to Three Cheaper Space Stocks

SpaceX just blew Wall Street’s estimates out of orbit.

And starting today, even more of its insiders are free to cash in.

Both of those facts point to the same trade.

It just isn’t SpaceX.

SpaceX Earnings

SpaceX reported third-quarter results last Tuesday.

Revenue came in at $14.58 billion. Analysts were looking for $12.7 billion.

That’s 161% growth from a year ago.

Starlink added 1.6 million subscribers in the quarter and now has nearly 14 million worldwide.

The company’s AI computing business is growing even faster.

Its CFO said there are “many customers asking for compute” and that new deployments pay for themselves in under a year.

Elon Musk said he sees SpaceX’s annual recurring revenue hitting $500 billion to $1 trillion by the end of next year.

The stock jumped nearly 8% on Wednesday.

Then Thursday arrived.

That’s when roughly 911 million shares held by early investors and employees became eligible for sale. Today, about 319 million more join them.

SpaceX sold less than 5% of its shares in its June IPO. Most companies sell at least twice that. A tiny float helped send the stock soaring early on.

Now that float is ballooning. And it’s doing so at a valuation north of $2 trillion, more than 35 times SpaceX’s annualized sales.

Meanwhile, the company spent $19.6 billion on capital projects in a single quarter, $16.4 billion of it on AI.

So you’ve got the richest valuation in the space sector, a mountain of spending, and a wave of insider stock hitting the market.

I’ll pass.

A Rocket Shortage Is Coming

Make no mistake, the space economy is real.

In fact, according to Space Capital, investment in the space economy is on track to top $100 billion for the first time ever this year. 

Blue Origin just raised at least $10 billion in its first-ever outside funding round. Stoke Space raised $1 billion to build a bigger reusable rocket.

Part of the reason is that SpaceX plans to retire the Falcon 9, the workhorse that carries most of the world’s satellites to orbit today. Investors see a rocket shortage coming and are rushing to fill the gap.

At the same time, the Pentagon, foreign governments, and AI giants are all ordering more satellites than ever.

Every one of them needs a ride to orbit, hardware to deploy once it gets there, and a ground network to control it.

That’s where I want to be.

The Galactic Supply Chain 

For example, there’s another company out there that builds rockets and satellites, and is one of the few American makers of space-grade solar cells.

More importantly, the company’s backlog sits above $2.3 billion, up 137% from a year ago. And roughly 45% of it is expected to turn into revenue over the next year, with or without the new rocket.

Cathie Wood’s ARK Invest is buying a recent dip in share, and I think that’s a good idea.

Another space company I’ve been tracking just won a $22.4 million Pentagon contract to build the dispensers that release small satellites once a rocket reaches orbit. It’s also building pieces of Golden Dome and the commercial space station slated to replace the ISS.

And a third runs things on the ground.

It just won a $446.8 million Space Force contract to build the network that controls America’s missile-tracking satellites, and it landed more than $100 million in new space and cyber contracts earlier this month.

None of these companies has to beat SpaceX to win. They get paid every time a satellite goes up, no matter whose name is painted on the rocket.

And together, they trade at a sliver of what SpaceX costs.

I’ve put the names, tickers, and buy-up-to prices for all three in my new briefing.