SpaceX shares declined 2.16% to $145.47 on Monday, even as the company's Starship rocket achieved its first orbital flight and deployed 26 Starlink V3 satellites. The drop mirrored a broader market selloff, with the Dow Jones Industrial Average falling 354 points as higher oil prices and Treasury yields weighed on equities.
The uncrewed Starship and its Super Heavy booster lifted off from SpaceX's Starbase facility in Texas on the rocket's 14th test flight. The booster completed a controlled splashdown in the Gulf of Mexico, though some engines stopped operating during descent. Starship also encountered an engine issue after separating from the booster, with one of its three main engines shutting down earlier than planned. Engineers determined the mission could continue, and Starship subsequently completed an engine firing that placed it into orbit.
Once in orbit, Starship deployed 26 next-generation Starlink V3 satellites at an altitude of approximately 269 kilometers. SpaceX confirmed that all 26 satellites were operating normally. The mission was initially expected to last about 10 hours and complete six orbits of Earth, but SpaceX shortened the flight to roughly three hours because of the engine issue.
Why the orbital flight matters
The successful orbital flight is a significant milestone for SpaceX as the company increasingly shifts its launch strategy toward Starship. Unlike the Falcon 9, which is currently in commercial service, Starship is designed to be fully and rapidly reusable and capable of carrying substantially larger payloads at lower costs. SpaceX says Starship V3 is designed to carry around 100 metric tons to orbit.
The company is winding down Falcon 9 and may not offer new Falcon 9 launches beyond 2028, although existing contracts are expected to continue. Starship is also central to Starlink's expansion. The V3 satellites are designed to handle about 10 times the data of the V2 Mini satellites currently launched by Falcon 9. SpaceX eventually plans to carry as many as 60 V3 satellites on each Starship flight.
The rocket is also important to NASA's Artemis program, which plans to use a version of Starship for crewed lunar missions. SpaceX president Gwynne Shotwell said at the All-In Summit this month that the company plans to launch AI compute satellites on Starship in 2027.
Financial performance and analyst outlook
SpaceX reported second-quarter revenue of $7.8 billion, up 92%, with a net loss of $541 million. The AI business, which includes xAI, generated about $2.6 billion in revenue. Bernstein has reiterated its Outperform rating and $248 price target on SpaceX, highlighting the massive growth potential of Starlink's residential broadband business. The firm projects Starlink could generate approximately $64 billion in revenue by 2031. At the current share price, this target implies roughly 68% upside for investors.
Douglas Harned, a Bernstein analyst, noted that Starlink has demonstrated exceptional growth, doubling its broadband subscriber base in each of the past four years. This trend is expected to continue, with the subscriber count projected to double again in 2026. Bernstein's base case scenario anticipates Starlink reaching 168 million subscribers by 2031, a forecast built upon the 2026 global broadband market size and projected population growth. As of the end of the second quarter, SpaceX reported having about 12 million Starlink subscribers.
In the second quarter, connectivity revenue surged 66% to $4.29 billion, driven by 1.7 million net subscriber additions. While Bernstein slightly trimmed its 2031 revenue estimate from $66 billion to $64 billion, the adjustment reflects an expected decline in average revenue per user (ARPU) as Starlink expands into lower-income markets. The firm also updated its financial model to account for a faster near-term connectivity buildout. Consequently, Bernstein now forecasts a fiscal 2026 diluted loss of $0.19 per share (improved from the previous $0.20 estimate) and fiscal 2027 earnings of $1.37 per share (up from $1.30).
This article is for informational purposes only and does not constitute financial advice.
