SpaceX (SPCX) shares have traded sideways in recent weeks, even after the company secured a significant contract modification from NASA valued at approximately $946 million. The stock currently sits near $152, up roughly 47% from its lowest point this year, as investors await the upcoming Starship orbital test scheduled for September 28.
NASA deal strengthens SpaceX's launch business
The new agreement adds three additional missions to SpaceX's existing Commercial Resupply Services contract, bringing the total to 17 missions. This extension, which includes ground operations, launch, in-orbit, and return and recovery services, is part of a broader program worth $5.92 billion. The deal underscores NASA's continued reliance on SpaceX for maintaining access to the International Space Station.
SpaceX's launch segment has shown robust growth. In its latest earnings report, the company disclosed that its space business generated over $962 million in revenue, up from $746 million in the same period last year. This growth trajectory is expected to continue as the company prepares for its next major Starship test, which was moved from September 22 to September 28.
Starship test and Starlink expansion
The upcoming Starship flight is a critical milestone for SpaceX. CEO Elon Musk has indicated that the new vehicle will carry the third version of Starlink satellites, which offer ten times the capacity of current models. This enhancement is designed to deliver faster speeds and improve competitiveness against traditional telecom providers like T-Mobile and AT&T.
Musk has been vocal about Starlink's potential, stating, "Even if our monetization per bit dropped by a factor of 10, that would still mean a 10x increase in the revenue of Starlink. I think people are really underestimating Starlink here. This is a big deal." Starlink remains SpaceX's primary revenue driver, contributing $4.29 billion in the last reported quarter, up from $3.2 billion a year earlier. The subscriber base has surged to over 12 million, with growth accelerating.
AI and data center ventures fuel long-term outlook
Beyond space operations, SpaceX is capitalizing on the artificial intelligence boom. The company operates Grok, a popular chatbot, and has expanded into cloud services through its Colossus and Colossus II data centers. These initiatives added $1.6 billion in incremental revenue in the second quarter. Notably, SpaceX has secured a $1.1 billion-per-month contract with an unnamed client, along with orders from major tech firms like Anthropic, Google, and Reflection AI.
Analysts are optimistic about SpaceX's revenue trajectory, with average estimates projecting over $150 billion in revenue next year, a substantial leap from the $18 billion reported last year. This optimism is partly driven by the company's diversified revenue streams, spanning launch services, satellite internet, and AI infrastructure.
Technical analysis points to further upside
From a technical perspective, SPCX stock has formed an ascending triangle pattern on the two-hour chart, a classic continuation signal. The stock has remained above the 50-period moving average, and the pattern suggests a bullish breakout is likely. If the breakout occurs, the next key resistance level is at $200, representing a potential gain of over 30% from current levels.
Investors are also keeping an eye on the broader market context, including recent moves in SpaceX shares ahead of the Starship test and the five-year outlook for the stock, which hinges on AI revenue and Starship's success. Additionally, the AI server market's projected growth could further benefit SpaceX's data center business.
While the near-term catalyst is the Starship test, the combination of a strong NASA partnership, expanding Starlink adoption, and AI-driven revenue diversification positions SpaceX for continued growth. However, investors should remain mindful of execution risks and market volatility.
This article is for informational purposes only and does not constitute financial advice.
