SpaceX, the aerospace manufacturer and space transportation company founded by Elon Musk, is poised to generate approximately $8 billion in sales in 2023. However, Cathie Wood’s ARK Invest believes that figure will be significantly larger in the future, thanks to an unconventional strategy.
In a recent investment thesis published by ARK Invest, the firm suggests that SpaceX’s ability to launch and reuse rockets gives them a substantial competitive advantage. According to ARK’s research, this innovative approach allows SpaceX to achieve significantly lower launch costs than its competitors, resulting in an overall more cost-effective service.
As a venture fund focused on disruptive innovation, ARK Invest holds a position in SpaceX. Its investment strategy encompasses both public and privately held companies that align with their theme of transformative industry advancements.
While the estimated $8 billion in revenue largely comes from providing launch services to clients like NASA and the Starlink space-based internet service, it is important to note that SpaceX has other ventures lined up. Although launch services are crucial to the company’s long-term success, they will not always be its main revenue stream.
SpaceX has yet to comment on its financials, but other players in the industry are also preparing to make their mark. For instance, Amazon.com is planning to offer space-based Wi-Fi through its satellite network. During an event in Las Vegas, Amazon Web Services (AWS) CEO Adam Selipsky explained how customers would be able to use their private networks by leveraging AWS’s satellite infrastructure.
In conclusion, SpaceX’s innovative approach of reusing rockets presents a game-changing opportunity in the space industry. With its unique competitive advantage and a long list of projects in the pipeline, the company is positioning itself for substantial growth and continued success.
Amazon’s Satellite Constellation: Kuiper
Amazon is venturing into the satellite industry with its newly launched satellite constellation, named Kuiper. While Kuiper has ambitious plans, it still needs to partner with multiple launch providers to deploy its satellites into orbit. Currently, there are only a handful of Kuiper satellites orbiting the Earth. On the other hand, SpaceX’s Starlink has already deployed thousands of satellites into space.
The Potential of Space-based Broadband
According to ARK, the space-based broadband market is projected to reach an annual revenue of $100 billion in the near future. In this market, SpaceX is expected to dominate with the largest market share.
Transforming the Broadband Services Market
The global broadband services market currently generates over $400 billion in sales. Space-based solutions aim to tap into this lucrative market while also improving coverage in rural areas. By doing so, they anticipate expanding the overall size of the market.
Starlink’s Vast Potential
There is no doubt that Starlink holds enormous potential. However, ARK is renowned for its ambitious predictions. For example, it remains optimistic about Tesla stock and has set a target price of $2,000 per share. As of now, Tesla stock is trading around $245.
The Self-Driving Robotaxi and Beyond
ARK sees a significant revenue opportunity for SpaceX beyond Starlink. If SpaceX achieves rapid reusability with its Starship, it could potentially generate $270 billion annually from point-to-point transportation. Starship is SpaceX’s fully reusable launch system, significantly larger than its Falcon 9 rocket. ARK believes that Starship has the potential to transport people around the world at a fraction of the time it takes by airplane.
Valuing SpaceX: A Complex Task
Determining the value of SpaceX is not a straightforward matter. Unfortunately, the report does not provide a valuation for SpaceX. Requests for comment to ARK regarding their thesis were unanswered at the time of this writing.
In private markets, SpaceX has already been valued at $150 billion, making it one of the most valuable players in the aerospace industry.
