SpaceX Just Inked a New $1.6 Billion Deal With Space Force. Here's What it Means for Investors
Key Points
SpaceX just landed a $1.6 billion U.S. Space Force contract for 18 Falcon 9 missions, averaging roughly $89 million per launch through the end of 2027.
The contract provides a modest revenue boost, but it doesn't address the bigger concerns weighing on the stock: extreme valuation, looming lockup expirations, and losses.
SpaceX's pivot to leasing data center capacity to Alphabet and Anthropic raises strategic questions about whether the company is sacrificing long-term AI competitiveness for short-term cash.
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Space Exploration Technologies Corp. (NASDAQ:SPCX) won a $1.6 billion contract from the U.S. Space Force to fly 18 missions with Falcon 9, the company’s current workhorse rocket. The flights are scheduled to finish by the end of 2027.
What the Space Force contract means for SpaceX's launch business
The total award comes out to roughly $89 million per launch and will help bolster the company’s space launch segment, which reported $4.1 billion in sales in 2025.
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The unit generated $653 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) -- a rough stand-in for operating profit -- in the same year, carrying 2,213 metric tons into orbit.
Falcon 9 has handled about 70% of the launches conducted globally (excluding China), making it not just the company’s work-horse, but the world’s.
Why the stock has fallen more than 40% since its record IPO
An award of this size isn’t outside the scope of normal contract size for SpaceX, but it comes at a pretty critical time for the company. After its record-setting IPO in which it raised more than $85 billion (well over twice that of the now second largest), the company’s stock has fallen more than 40% from the peak in the days following the IPO.
Two primary worries have driven SpaceX’s stock slide. One, valuation -- the stock was trading at roughly 100 times its annual sales, meaning buyers were paying more than $100 for every $1 of revenue the company brought in last year. That is far, far more than is normal for a company of its size, especially one in a capital-intensive industry.
And two, supply: IPO lockup restrictions expire, and insiders who had been barred from selling become free to unload shares very soon. The first lockup will double the amount of shares available for public sale.
Image Source: Company Images
SpaceX by the numbers: Revenue, losses, and debt
SpaceX reported $18.7 billion in revenue for 2025. The net loss that year came to $4.9 billion. The first quarter of 2026 brought in $4.7 billion of revenue, and the loss over those same three months ran to roughly $4.3 billion -- nearly matching the whole of 2025 in a single quarter. Long-term debt stood at about $29 billion.
The first earnings report as a public company comes on Aug. 4.
Is this contract a game changer? Here's my take
$1.6 billion is real money, and the launch franchise behind it is about as dominant as a business gets, but I don't think this contract changes the investment case much. Spread over 18 flights and roughly a year and a half, it is a modest addition to a segment that did over $4 billion in sales last year.
The bigger question hanging over this stock is AI. SpaceX now leases data-center capacity to Alphabet and to Anthropic, the maker of Claude, and will bring in billions a month doing so.
This is a major pivot, and in my eyes, is more of a short-term stopgap to stem the incredible cash bleed the AI unit has been experiencing. The terms of these deals are unusually lax, allowing for their termination by either party for any reason in a matter of months. And long term, if SpaceX believed its Grok model could compete in the market, would it be smart to divert precious compute capacity to competitors?
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
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