SpaceX Is Now Bigger Than Amazon and Closing in on Microsoft. Here's How to Think About the Valuation.

In its first few days of trading on the public market, Space Exploration Technologies Corp (NASDAQ: SPCX) has lived up to the hype.

After going public on Friday and raising nearly $86 billion, the stock is now up close to 32%. As of 2:23 p.m. ET, the stock traded near $213 per share and had a market cap of $2.82 trillion.

That puts SpaceX ahead of Amazon and within reach of Microsoft. It’s now the fifth-largest company in the world by market cap.

It’s pretty incredible to see a company go public and, within days, become one of the largest in the world. But it’s also uncharted territory for investors. Here’s how to think about the valuation.

Image source: Getty Images.

Breaking down SpaceX’s three segments

SpaceX has three segments: space, connectivity, and artificial intelligence.

The space division conducts rocket launches for commercial clients and sends astronauts into space. The company has managed to build reusable rockets like the Falcon 9, which lowers launch costs.

Interestingly, the space division has the lowest total addressable market (TAM) at $370 billion. However, it’s the reusable rocket technology that powers the entire thesis.

The next division is connectivity, also known as Starlink, which has established a low-Earth-orbit satellite internet service with over 10,400 satellites. The ultimate goal is to have around 42,000 total.

Starlink, with 10.3 million users, is already a good business. In 2025, the division generated nearly $11.4 billion in revenue and an operating profit of roughly $4.4 billion. SpaceX believes Starlink’s TAM is $1.6 trillion.

The last division is AI. SpaceX only added this division earlier this year when it acquired xAI, another company founded by Elon Musk.

The AI division encompasses the social media platform X, the Grok intelligence platform, the company’s data centers, and a planned terafab facility built in partnership with Tesla and Intel.

The AI division is also planning to build orbital data centers in space and offer enterprise applications to businesses. SpaceX believes the TAM of this business is $26.5 trillion.

How to think about valuation

Looking at the assigned TAMs, the AI division is the clear driver of the company’s enormous valuation. The business will need to deliver on some of its bigger promises, such as orbital data centers, if it wants to sustain its current valuation and grow it.

In meetings with investors, Goldman Sachs bankers reportedly told prospective investors that it thinks the AI division can grow revenue by 100-fold by 2030.

Investors already saw the AI division flex its muscles when it signed two massive AI compute deals with Anthropic and Google, totaling $2.2 billion in combined monthly revenue.

A team of analysts at Morningstar assigned the AI division a “moonshot” valuation of nearly $108 per share, which assumes it “rapidly scales orbital data centers to capture 20% of our forecast AI computing capacity by 2040.”

However, Morningstar assigns only a 7% likelihood to this outcome, although they are the most bearish analyst team on Wall Street in their assessment of SpaceX.

Another thing to note is that enterprise applications account for $22.7 trillion of the company’s total TAM.

The concept for enterprise applications is vague, but in its prospectus, SpaceX says it is working with Tesla to develop an agentic AI platform called Macrohard.

If successful, Macrohard would be “capable of fully emulating digital workflows and augmenting human operation of computers—from coding and product development to management and entire business processes—using sophisticated autonomous agents.”

The big takeaway is that SpaceX’s valuation hinges on the AI division, which investors are banking on to build orbital data centers at scale to power Grok and Macrohard, which will create and run agents that can basically work like humans.

It’s hard to understand how investors are willing to reward the company with a valuation suggesting all of these ideas are close to happening.

But perhaps investors see Musk and SpaceX being the closest to such ambitions, making a potentially massive reward worth the risk.

Tesla has also long traded at a premium multiple, so it’s possible investors assumed SpaceX would receive similar treatment.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Goldman Sachs Group, Intel, Microsoft, and Tesla. The Motley Fool has a disclosure policy.