If you still think SpaceX is a space company, please stop.
Yes. Its “Space” segment covers the launch business. Its “Connectivity” segment is what we know as Starlink. But to understand where the founder and CEO, Elon Musk, is taking the company, aiming your telescope at Mars may be a waste of time.
“Probably in four or 5 years AI will be 99% of the value of SpaceX. I’d say 5 years for sure AI will be 99% the value of SpaceX. And the value of SpaceX will be some astronomical number.” — Elon Musk, All Hands Meeting, August 11, 2026
SpaceX first earnings report as a public company, released on August 4, revealed revenue is up 92% year-over-year to $7.8 billion, with the AI segment now the fastest-growing part of the business by far. The second quarter capital expenditures make the priority obvious. Space and Starlink combined spent just over $2.5 billion. AI spent almost $16 billion.
Two days later on August 6, the first tranche of insider shares unlocked, more than doubling the public float from roughly 640 million shares to over 1.5 billion. More unlocks are coming through the fall and are expected to pressure the share price.
“SpaceX is a neo cloud with a telecom business and a side hustle as a defense contract. Neo cloud is basically just renting out data centers. The telecom business is Starlink, wherever they’re taking it. And then, yeah, Laura, to your point, there’s-- I mean, the, the space business, the defense business is there, but it doesn’t seem to be the focus.” — Lou Whiteman, Stock Analyst, The Motley Fool
In this episode, Founder and CEO of Quilty Space Chris Quilty, MilkyWayEconomy’s Chief Economist, George Pullen, and the The Motley Fool Stock Analyst Lou Whiteman join me for a livestreamed episode to walk through the mechanics as well as the good, the bad, and the foggy in SpaceX’s first quarter as a public company. The episode, which was livestreamed, is available here, on YouTube, as well as on all major podcast platforms.
Here are just a couple of my takeaways from the August 4 earning call.
Telcos: Musk is coming for your business
Musk has no intention of just sitting on the 65 megahertz of spectrum SpaceX acquired from Echostar, in a deal worth $19.6 billion split between cash and stock. What those on the line heard in the earnings call heralded a push to use SpaceX Mobile as well as its dishes to peel off U.S. mobile phone customers from AT&T, Verizon, and SpaceX’s current mobile service partner T-Mobile.
“ We anticipate really strong uptake of that capability”, SpaceX’s President and Chief Operating Officer Gwen Shotwell said. “As far as revenue, like I’m just gonna take a very high level kind of top-down. The big three in the United States, AT&T, Verizon, and T-Mo, roughly between them six hundred billion dollars a year. And I anticipate us to be able to acquire quite a few of their customers because I think our service will be better.”
She said SpaceX mobile would be operational by the end of next year.
What’s happening with Terafab?
Musk had called Terafab, the semiconductor fabrication facility, “essential” during the pre-IPO roadshow. It was meant to reduce SpaceX’s dependence on buying NVIDIA chips to scale the AI segment, but was altogether missing from the earnings report and SEC quarterly filing.
Roughly 10 minutes into the earnings call Musk said, “Going forward, we’ve decided to build exclusively on Nvidia, because we think the Vera Rubin architecture is the best architecture.”
About 25 minutes later, Citigroup analyst John Godin pitched a softball asking, “Any related thoughts on capital needs for next steps in extreme vertical integration like Terafab?” Musk, Shotwell, and Bret Johnsen, the chief financial officer simply ignored the pitch and spoke about return on investment.
Two days later, a press release was posted on the SpaceX website announcing, “Today, we are announcing that Terafab will be built in Grimes County, Texas.” Thing is, Nathan Owens of Manufacturing Dive already revealed that fact back in May.
Connectivity, a.k.a. Starlink
Yes. I do remember when Musk said Starlink was a “key stepping stone on the way toward establishing a self-sustaining city on Mars and a base on the moon.” That was May 2019. Back then he also said Starlink would capture 3% to 5% share of a $1 trillion global internet market to generate an annual revenue of $30 billion to $50 billion.
Those numbers changed when SpaceX went public. According to the SPCX S-1, the Connectivity segment’s total addressable market, or TAM, is $1.6 trillion. In the second quarter of 2026 alone, Connectivity — a.k.a. Starlink — generated $4.291 billion in revenue.
Annualized, that’s a run rate of $17.2 billion this year. Barring an unforeseen calamity, that means Starlink will account for roughly 2.9% of a world broadband market estimated to be valued at $600.4 billion, according to Grand View Research. That actually supports what Musk said in 2019.
Reading
SpaceX
24/7 Wall St. — “Mystery Buyer Just Bet $20 Million SpaceX Could Nearly Triple By Friday. One Analyst Thinks It Could Be a Big Wall Street Bank.” — AJ Tiarsmith, August 4, 2026
24/7 Wall St. — “Elon Musk Tells SpaceX Employees ‘AI Will be 99% The Value of SpaceX’ Within 5 Years” — August 12, 2026
The Next Web — “Musk Says SpaceX AI Will Out-Earn Rockets by September, and Be Trained on Staff” — August 12, 2026
China
Ars Technica — “One of China’s Workhorse Rockets Just Exploded in Flight” — Eric Berger, August 12, 2026
NASA
Aviation Week — “NASA Administrator Isaacman Imagines the State of Space in 110 Years” — Irene Klotz, August 5, 2026
Press Freedom
National Press Club — Statement in Support of Legislation to Restore Pentagon Press Access — Statement by NPC President Mark Schoeff Jr., August 7, 2026
Ad Astra!
Laura
AI-GENERATED TRANSCRIPT: The episode transcript text was produced using automated speech recognition. Technical terminology may contain inaccuracies. This is provided for accessibility and is not a verbatim record. Please refer to audio for the definitive version.
