SpaceX Innovating Through Space, Connections, and AI

By kgrunsfeld@hightoweradvisors.com on September 24, 2026

SpaceX’s Growth Story Takes Center Stage

Following an eventful and headline-grabbing IPO, SpaceX shares have begun to settle, allowing investors to focus on the company’s strong fundamentals and ambitious growth plans. The company has developed into an integrated infrastructure platform spanning space launch, global communications, and artificial intelligence. These businesses reinforce one another as reusable rockets reduce the cost of deploying satellites, Starlink turns that launch capacity into recurring connectivity revenue, and the combination of launch, communications, and computing infrastructure creates the foundation for SpaceX’s growing AI business. This flywheel is the core of SpaceX giving them multiple ways to win as demand for space access, connectivity and computing continues to expand.

SpaceX has fundamentally changed the economics of spaceflight. Since successfully landing its first Falcon 9 booster in 2015, the company has established a ten-year lead in reusable orbital-class rockets.[1] Since 2023, SpaceX has launched more than 80% of the world’s mass to orbit annually, while maintaining a Falcon mission success rate above 99%.[2] Falcon 9 remains the workhorse of the global launch industry, completing 165 orbital launches in 2025 with demand remaining strong for Falcon 9, with launch capacity reportedly largely booked through 2029.[3] The primary competitive advantage for SpaceX is cost. According to NASA, the first version of Falcon 9 reduced launch costs to approximately $2,700 per kilogram from a historical industry average of $18,500. Falcon Heavy lowered costs further to approximately $1,400 per kilogram.[4] These savings have not only helped SpaceX take market share from traditional launch providers but have also made entirely new space-based businesses economically possible.

Space: Lowering the Cost of Reaching Orbit

Starship could create the next major reduction in launch costs. The fully reusable system is designed to carry approximately 100 metric tons into orbit initially, with later versions expected to reach 200 metric tons as compared to Falcon 9’s current capacity of 22.8 metric tons. Through this, SpaceX ultimately aims to reduce launch costs by more than 99% relative to historical industry levels.[5] Under a mature, fully reusable architecture, the company believes costs could eventually approach approximately $10 per kilogram.[6] Starship is also critical to the growth of Starlink and SpaceX’s longer-term AI ambitions. One Starship is expected to carry approximately 60 higher-capacity Starlink V3 satellites, compared with 27 V2 satellites on Falcon 9. Its greater payload capacity could also support lunar missions, deep-space exploration and eventually the deployment of data centers in orbit.[7] Starship remains in development, so execution will be important. However, SpaceX has already demonstrated its ability to transform rocket reusability from an ambitious idea into an industry-leading operating model.

Connections: Building a Global Communications Network

Starlink turns SpaceX’s launch advantage into a recurring revenue communications business. SpaceX designs and manufactures the satellites, launches them on its own rockets and operates the network itself. This vertical integration allows the company to deploy capacity faster and at a lower cost as activating a Starlink connection can cost approximately $600, compared with roughly $3,000–$4,000 to construct a new cable or fiber passing.[8] From this advantage, Starlink has expanded from 2.3 million subscribers in 2023 to 8.9 million in 2025 and approximately 10.3 million by the first half of 2026. More recent company materials cite more than 12 million subscribers across 164 countries, territories, and markets.[9]

Starlink Mobile creates another major growth opportunity by allowing an ordinary, unmodified smartphone to connect directly with satellites when terrestrial coverage is unavailable. The service began with messaging and emergency communications but is expected to expand toward voice and data. SpaceX already supplements terrestrial wireless networks across approximately 30 countries, and the FCC has now granted the company authority to operate its satellite internet service internationally. This could allow U.S. customers to remain connected while traveling abroad and operate alongside terrestrial networks, filling dead zones, and extending coverage into areas where conventional infrastructure is too expensive or impractical.

This scale is already producing meaningful financial results. Connectivity revenue increased 66% year over year in Q2 to approximately $4.3 billion, supported by a record 1.7 million net subscriber additions.[10] Importantly, average revenue per user remained stable at $66 per month, demonstrating that SpaceX can expand the subscriber base without sacrificing pricing. Starlink’s next-generation V3 satellites could additionally expand its addressable market as each V3 satellite is expected to provide more than ten times the capacity of a V2 satellite. As the new constellation is deployed, greater capacity could support speeds above 500 Mbps, reduce costs, and allow Starlink to expand beyond rural markets into more suburban and selected urban areas with satellite broadband’s U.S. market share potentially increasing from 3% today to 9% by 2030.[11]

The opportunity extends beyond residential internet. Starshield adapts the same satellite architecture for secure government communications, Earth observation, and hosted payloads. Enterprise and government revenue increased 108% year over year, supported by more than $6 billion of new U.S. government awards and major airline wins including American Airlines, Southwest, Virgin Atlantic, Iberia, and Aer Lingus. Management estimates that Starlink remains less than 10% penetrated in aviation, suggesting a long runway across airline, maritime, government, and other mobility markets.[12]

AI: Combining Compute, Data, and Distribution

SpaceX’s AI strategy adds a third growth engine to the platform with AI revenue increasing 247% year over year to $2.6 billion in Q2, driven by new cloud-computing agreements and continued Grok adoption.[13] Compute capacity reached 1.4 gigawatts during the quarter and is expected to exceed 2 gigawatts by year-end as management expects to reach approximately 10 gigawatts of compute by the end of 2027, potentially supported by 15–20 gigawatts of total power and cooling infrastructure.[14] This speed is particularly valuable in this current environment as advanced computing capacity exceeds available supply. SpaceX has secured major compute agreements signing $6.7 billion of cloud services contracts during the first few weeks of the third quarter, while its existing agreements with Google and Anthropic are only beginning to ramp.[15] Its ability to deliver large clusters quickly allows the company to charge a premium for immediate access to the latest processors.

The longer-term AI opportunity brings the entire SpaceX ecosystem together. Grok gives the company exposure to the model and application layers. Its primary advantages include access to real-time information from X, substantial internal computing capacity and native text, image, voice, and video capabilities. Grok itself has reached approximately 117 million monthly active users with the newer SpaceX AI Grok bot agent surpassing 400,000 users during its first month growing 24% in the most recent week.[16] This early adoption demonstrates the potential for SpaceX to monetize AI through subscriptions, advertising, APIs, enterprise software, and infrastructure contracts.

SpaceX’s three core branches should not be viewed independently as their progress align on eventually developing solar-powered data centers in low Earth orbit. Terrestrial data centers increasingly face constraints related to electricity, cooling, land, water, grid connections, and permitting. Orbital computing remains experimental and will require major improvements in launch cost, thermal management, and operating scale however, once developed they could benefit from near-continuous solar energy and avoid several of those terrestrial limitations. Once at scale, this would be supported by using Starship infrastructure for deployment and utilizing Starlink for global networking. While these long-term growth opportunities remain highly capital intensive in the present, they are supported by a profitable connectivity business and a launch franchise with an unmatched record of scale, reliability, and reuse. This interconnected platform is foundational as SpaceX provides exposure to three of the largest infrastructure opportunities of the coming decades: lower-cost access to space, expanded global connectivity, and rapidly growing AI compute demand making it a unique opportunity looking forward.

[1] Bloomberg Intelligence, As of October 24, 2026

[2] SPCX Prospectus: As of May 21, 2026

[3] Mizuho Analyst Note: As of July 14, 2026

[4] SPCX Prospectus: As of May 21, 2026

[5] Mizuho Analyst Note: As of July 14, 2026

[6] SPCX Prospectus: As of May 21, 2026

[7] SPCX Prospectus: As of May 21, 2026

[8] Mizuho Analyst Note: As of July 14, 2026

[9] Mizuho Analyst Note: As of July 14, 2026

[10] SPCX 2Q26 Earnings Call: As of August 4, 2026

[11] SPCX 2Q26 Earnings Call: As of August 4, 2026

[12] SPCX 2Q26 Earnings Call: As of August 4, 2026