SpaceX is valued at nearly $3 trillion, surpassing Amazon and Microsoft, but there’s a problem
SpaceX rose for the fourth consecutive day, with its market value reaching about $2.64 trillion on Tuesday, approaching the $3 trillion mark. During the transaction process, space exploration technologies corp. The market value was briefly ahead of Amazon and Microsoft, but eventually the two companies once again surpassed SpaceX in market value.
Even after the stock price retreated, SpaceX remains one of the most valuable companies in the world, ahead of the likes of Broadcom, Meta, Tesla, Micron Technology and Eli Lilly.
Why investors care
The biggest problem for investors is that even though SpaceX isn’t yet profitable, its valuation has reached huge. SpaceX still reports losses but trades at a valuation similar to the largest tech giants.
SpaceX had sales of about $19 billion in the past 12 months, according to AlphaSpace data cited by Yahoo Finance. This means the company is more than just a concept or a startup with no revenue. It already has major businesses including rocket launches and the Starlink satellite internet network.
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SpaceX revenue versus big tech companies
Microsoft’s revenue last year exceeded $300 billion. Amazon’s revenue exceeded $700 billion during the same period. SpaceX’s revenue represents only a fraction of those numbers. The company also posted a net loss of approximately $8.7 billion, according to Yahoo Finance.
Investors no longer view SpaceX as just a rocket company. They see it as a future infrastructure giant that can power communications, satellite services, defense systems, launch, data networks and global internet access via Starlink. Many investors believe these businesses could become extremely profitable in the future.
Many investors compare SpaceX to Tesla because both companies are related to Elon Muskaccording to Yahoo Finance. It took Tesla about 21 months to grow from a $100 billion company to a $1 trillion company. After going public, SpaceX’s valuation reached higher even faster. That speed makes the current rally unusual.
The trap behind the $3 trillion rally
Yahoo Finance said investors are already confident in the future of the aerospace industry and SpaceX’s long-term vision. The real challenge is whether the company’s financial results can ultimately match the massive valuation. Currently, SpaceX’s market capitalization reflects the profits investors expect in the coming years, not the profits it is making now. If future earnings grow as expected, investors may be right. If those profits don’t materialize, SpaceX’s valuation could come under pressure.
So SpaceX is close to becoming a $3 trillion company and briefly surpassed Amazon and Microsoft’s market capitalization. However, unlike most trillion-dollar companies, SpaceX is still losing money.
