SpaceX (SPCX.US) Starship reaches orbit for the first time, Wall Street unanimously bullish: the computing power leasing behind it opens up valuation imagination space.

On September 28, SpaceX's (SPCX.US) Starship lifted off from its Starbase facility in Texas on its 14th integrated test flight, reaching Earth orbit for the first time and releasing 26 third-generation Starlink (V3) satellites via a deployment mechanism on the spacecraft known as the "candy dispenser." What the market values is clearly not just this single launch, and Wall Street investment banks have come out unanimously bullish. TD Cowen initiated coverage on Monday with a "Buy" rating and a $200 price target; together with Royal Bank of Canada (RBC), Clear Street, and CLSA, the four firms' price targets range from $200 to $250, implying roughly 37% to 72% upside based on Monday's closing price. And in this wave of bullishness, what keeps being mentioned is not the rocket, but computing power leasing. Starship reaches orbit for the first time: all satellites deployed, returns after just two laps According to reports, this flight used the B21 booster and the S41 spacecraft, both part of the third-generation Starship system; one of the spacecraft's six engines malfunctioned, and the live broadcast commentary at one point judged that orbit could not be reached, but after reassessment the engineering team confirmed an orbital insertion burn could still be attempted. About 25 minutes after launch, Starship reached orbit, then spent roughly half an hour releasing satellites one by one, establishing contact with all 26 satellites, and Musk confirmed all satellites were operating normally. The flight was not flawless. One engine shut down early during ascent, and a mission originally planned to orbit Earth about 6 times at an altitude of roughly 275 kilometers over nearly 10 hours was ultimately shortened to about 3 hours and only 2 laps, with the upper stage's remaining engines burning longer to compensate. The Super Heavy booster splashed down in the Gulf of Mexico, and no attempt was made this time to catch it with the launch tower's mechanical arms; the spacecraft completed its first deorbit burn and splashed down in the designated area of the Pacific west of Chile. The significance of this flight lies in this: since the first integrated test flight in 2023, all 13 previous flights had remained suborbital, and reaching orbit is the basic threshold for a launch vehicle. Aviation engineer Dean Sleden called placing 26 V3 satellites into their target orbit a "huge victory," and noted it marked Starship's first revenue-generating commercial flightthese satellites are worth millions of dollars. Catherine Curley, a senior analyst at Georgetown University's Center for Security and Emerging Technology, took a more restrained view: the mission made notable progress but was not a "super success," and "by SpaceX's own metrics and goals, they did not complete the 10-hour flight, and the engine did have problems." 1 Tbps per satellite: the capacity leap brought by V3 According to documents SpaceX submitted to regulators, the V3 satellite is designed with a downlink capacity of about 1 Tbps, equivalent to each satellite supporting about 10,000 households simultaneously running full 100 Mbps broadband, with uplink capacity of 160 Gbps; compared with V2, downlink is up about 10-fold and uplink up about 22-fold, and the antenna supports 2,048 uplink and downlink beams (V2's phased array had 192 downlink and 144 uplink). According to SpaceX's technical notes, a single Starship launch can deliver into the constellation about 20 times the capacity of a Falcon 9 launching V2 satellites. Weight is another threshold: a single V3 weighs about 2,000 kilograms, roughly twice the previous generation, and Falcon 9 cannot lift it. Third-party commentary has been more optimistic, though these are personal statements: Rob Maurer, managing partner of First Principles Group, said on X that "with just today's Starship launch alone, SpaceX added more Starlink capacity in the past hour than in the entire first year and a half of Starlink launches"; Phil Bessel, a former Apple Inc. executive and now a senior director at Rivian, said a single V3 is designed for 1.16 Tbps of user capacity and 2.4 Tbps of inter-satellite optical links, and these links could ultimately form a network backbone capable of routing more traffic and even connecting computing resources to space. Musk wants Starship to launch 60 V3 satellites per flight once it enters routine operations; by one estimate, to noticeably improve Starlink service overall, about 1,000 V3 satellites need to be in orbit, requiring at least 17 more launches at full capacity. SpaceX has applied to the U.S. Federal Communications Commission (FCC) to operate up to 100,000 V3 satellites; as of September 2026, Starlink had launched about 13,000 satellites cumulatively, with about 11,000 in orbit, serving tens of millions of users in more than 160 countries and regions. Wall Street marks up the price: computing power is the near-term engine TD Cowen initiated coverage led by analyst John Blackledge with a "Buy" rating and a $200 price target, calling SpaceX's broader opportunities in AI and space "enormous." The firm expects AI computing power leasing to contribute about 60% of revenue in 2027, with revenue compounding at 62% annually from 2026 to 2031, and low-Earth-orbit launches approaching 1,000 by 2031. TD Cowen also expects about 35% of 2026 sales to come from computing-related business, a segment that could surpass Starlink, the "crown jewel," as early as the first quarter of 2027, and account for 65% of overall revenue by 2028, with nearly half of planned computing capacity in coming years leased to outside companies. Deutsche Bank Aktiengesellschaft analyst Edison Yu gave a "Buy" rating and a $235 price target, estimating that five signed customers correspond to about $54.5 billion in revenue run-rate, and saying that as capacity comes online "several more large deals are expected to land." Other moves the same day: RBC reiterated "Outperform" and a $225 price target, calling the 14th flight an important milestone for Starship's launch capability and V3 deployment; Clear Street maintained "Buy" and a $217 price target, saying the mission advanced the company's ability to expand a high-capacity constellation, but that the engine issue was a reminder that execution risk remains; CLSA initiated coverage with "Accumulate" and a $250 price target; Bernstein SocGen maintained "Buy" and a $248 price target. According to Tipranks data, the average analyst price target is $233. The details of the computing contracts are the key to understanding this round of expectations. Anthropic pays $1.25 billion a month to lease computing power from SpaceX's Colossus data center in Memphis; the computing agreement signed by Alphabet Inc. Class C cloud is $920 million a month, effective next month; Reflection AI pays $150 million a month; and another unnamed customer pays $1.11 billion a month starting in Decembertotaling about $3.4 billion a month, or about $40.8 billion annualized, if fully performed. However, only three of the five disclosed customers have been publicly confirmed, and the fourth, disclosed in July, has been speculated by some analysts to be the U.S. Department of Defense; these leases also contain an "unusually short" 90-day termination clause, making it relatively easy for customers to exit. The parent company's results provide support at the bottom. According to an earnings summary, SpaceX's second-quarter revenue (released August 4) was $7.8 billion, up 92% year over year, above the market expectation of $6.81 billion, with adjusted EBITDA of $3.5 billion, up 191%, and a net loss of $541 million, of which the AI segment had revenue of $2.6 billion, up 247%. Chief Financial Officer Bret Johnsen said the company is on track to reach a $100 billion annual recurring revenue (ARR) run-rate by the end of 2026; management plans for computing infrastructure to reach 15 to 20 gigawatts by the end of 2027, while Musk moved his $1 trillion annual revenue target forward from 2031 to 2030. The source of this computing narrative is the merger in February this year: SpaceX acquired xAI in an all-stock deal (consideration of about $250 billion, with a combined valuation of about $1.25 trillion), the AI business was officially renamed SpaceXAI in July, and Colossus thereby became an asset of the listed company. Musk put the merger logic bluntlyorbital data centers: the company has applied to the FCC for up to 1 million in-orbit satellites for AI computing, and plans to begin launching them with Starship as early as the end of next year. The other side: a roughly $1.9 trillion market cap, a 20x price-to-sales ratio, and a flood of lockup expirations The other side of the stock price is valuation. Based on the September 28 closing price, SpaceX's total market capitalization is about $1.92 trillion; by the original account, the stock is down 10% year to date but still up 1% for the month. By one calculation, 2025 revenue was about $18.7 billion and the company is still losing money, while Wall Street expects that to jump to $44.8 billion and $108.3 billion in the next two yearseven if fully achieved, the price-to-sales ratio based on 2027 expected revenue is still close to 20x, which is not cheap for an asset-heavy company, and its forward price-to-earnings ratio is about 204x. "The Big Short" investor Michael Burry said at the time of the company's listing that there was nothing in the prospectus to support even a $1 trillion valuation, and later described it as "a small space business, a niche telecom business, a struggling social media platform, plus a 'lite version of CoreWeave.'" Share supply is the nearer problem: the company issued only about 4% of its shares in the IPO, and lockups have been expiring in wavesone batch unlocked on September 24, up to 328.4 million shares each could become tradable on October 9 and October 24, and as many as 1.3 billion shares could flood the market after the third-quarter report; Musk himself is locked up until June next year, but employees and institutional investors are not. Financing costs are also rising: according to the same report, shortly after listing the company issued $25 billion in bonds with coupons of 5.35% to 6.65%; with the Federal Reserve having just raised rates and hinting it may continue to do so, if more debt is issued to finance the next round of computing and launch site construction, the path to profitability will be tighter. Retail sentiment has recovered somewhat. On the Stocktwits platform, SPCX's retail sentiment index rebounded from "bearish" the previous day to "neutral," with 24-hour message volume up 74%; one long-term holder commented that "the money will come, all the major bank analysts have confirmed it," while another user stressed that the flames and water fireball on reentry were "completely normal for this phase of testing," and called the 14th flight a "historic success." The lagging competitors, and NASA's bet on Starship for the Moon landing The situation of competitors instead highlights SpaceX's position. Blue Origin's New Glenn made its first flight in January this year, but a mission in May failed during the powered landing phase, destroying the rocket and its only launch pad, with a return-to-flight target set for before the end of the year; United Launch Alliance's Vulcan has been grounded since February due to a booster anomaly. Amazon.com, Inc.'s Leo constellation's most recent successful deployment was on July 2, with 396 satellites launched cumulatively, a clear gap versus Starlink's more than 11,000 in orbit, and its goal of starting commercial service by mid-2026 has already passed. More critical is NASA's dependence. According to industry media estimates, Starship is the only crewed landing system for the Artemis lunar program, and the mission requires 10 to 20 "tanker Starship" flights and the transfer of cryogenic methane and liquid oxygen in orbit, a process with no precedent to date; SpaceX has twice postponed the in-orbit propellant transfer demonstration, with the latest target "no earlier than the end of 2026," while Artemis III plans an uncrewed lander demonstration in Earth orbit by the end of 2027, and Artemis IV plans the first crewed lunar landing in early 2028, both depending on the success of that demonstration. Back to Musk's own timeline: he wrote on Sunday that "Starship is 2 to 3 years away from one flight per hour"; the longer-term goal is 10,000 launches a year by 2030for reference, Falcon 9 flew 165 times in 2025, already a company record and about half of global orbital launches that year. TD Cowen's projection of nearly 1,000 low-Earth-orbit launches by 2031 falls roughly in the range of "less than 3 per day." The results of the engine anomaly investigation will determine whether the 15th flight can attempt, as originally planned, to catch the spacecraft with the launch tower's mechanical arms.