Goldman Sachs Initiates Coverage on SpaceX: A Giant Unifying Three Trillion-Dollar Markets through Vertical Integration

Goldman Sachs initiates coverage on SpaceX with a "Buy" rating, characterizing it as an infrastructure giant vertically integrated across aerospace launches, satellite internet, and artificial intelligence. The target price is $205, implying a potential upside of about 27%, with a risk-reward ratio of 2:1.

According to Wind Chasing Trading Desk, the team led by Goldman Sachs analyst Eric Sheridan stated in their July 7 report that SpaceX has evolved from a pure aerospace manufacturer into an "Infrastructure-as-a-Service" platform. The three major business segments—Space, Connectivity, and AI—collectively face a potential market size as high as $28.5 trillion.

Goldman Sachs expects total company revenue to grow from $18.7 billion in 2025 to $474.3 billion in 2030, with a five-year compound annual growth rate of 91%, and GAAP operating margin will significantly improve from -13.9% in 2025 to 50.1%.

The direct impact of this report on the market is: it provides SpaceX with a systematic valuation framework and clarifies three core investment debates—addressable market size, revenue growth trajectory, and margin expansion path. At the same time, Goldman Sachs cautions that the company expects to raise around $270 billion in debt capital from 2026 to 2030, and free cash flow will remain negative until 2030, with considerable share price volatility risk.

From Rocket Manufacturer to Infrastructure Platform

SpaceX's core competitiveness lies in vertical integration. Through organic investment and the consolidation with xAI (acquired in February 2026 for about $250 billion), the company has upgraded its positioning from an aerospace manufacturer to an infrastructure service provider covering the entire supply chain.

In the space segment, SpaceX eliminates third-party profit stacking to compress per kilogram orbital costs to levels unreachable by competitors. Since its first flight in 2010, Falcon 9 has completed 658 missions with a success rate exceeding 99%, reducing launch costs by over 85% compared to industry averages. Goldman expects, with full commercialization of Starship, per kilogram launch cost will further drop to $183 by 2030, representing a 99.1% discount to SpaceX's long-term target.

In the connectivity segment, Starlink satellite internet service has become the company's core source of cash flow in the mid-term. Goldman Sachs notes that capital generated here will support deeper space exploration and AI business expansion.

In the AI segment, SpaceX is building a complete chain from computing infrastructure to advanced AI models via acquisition of xAI (including Grok model and X platform) and ongoing acquisition of Anysphere ("Cursor"). Goldman notes that the company is rapidly expanding ground computing power at costs far below industry averages, which analysts find "unexpected", attributed to vertical integration and internal development strategies.

Space: Launch Sovereignty and Cost Moat

Goldman Sachs describes SpaceX's position in the space launch sector as "dominant." Since 2023, SpaceX has handled over 80% of global orbital mass transportation tasks. In the external commercial launch market, the company has maintained over 50% market share since 2015.

Starship is the core variable for this segment. This fully reusable two-stage rocket has a low Earth orbit payload capacity of more than 100 metric tons, over four times that of Falcon 9. As of the report's release, Starship has conducted 12 test launches; Goldman expects commercialization in the next few quarters.

Goldman forecasts total launches will grow from 165 in 2025 to 2,808 in 2030, the majority being internal payload launches (Starlink and orbital computing deployments). For external commercial launches, Goldman assumes about 50 Falcon 9 launches per year from 2027-2030, gradually supplementing with Starship.

Space segment revenue is expected to grow from $4.1 billion in 2025 to $8.3 billion in 2030, with a five-year CAGR of 15%. GAAP operating margin is forecast to improve from -16.1% in 2025 to 15.8% in 2027, then drop to 7.3% in 2030 due to Starship infrastructure build-out and depreciation.

On regulation, Goldman notes SpaceX is currently approved for a maximum of 145 Starship launches per year (distributed across Starbase, Kennedy Space Center, and Cape Canaveral), but all are currently consolidated at Starbase with an actual annual cap of only 25 launches. Goldman expects SpaceX's launch volume to break 25 in 2027, requiring completion of new launch pads or a new FAA approval round.

Connectivity: Starlink’s Scale and Monetization

Connectivity is SpaceX's most mature commercial business and the main source of mid-term profits in Goldman’s forecast. Goldman expects revenue in this segment to grow from $11.4 billion in 2025 to $246.9 billion in 2031, with a five-year CAGR of about 69%.

Broadband (Starlink Broadband): Goldman expects Starlink paying users to grow from 8.9 million at the end of 2025 to 130.3 million by 2031, a compound annual growth rate of about 50%, with global broadband market share rising from 0.7% to 8.5%. Growth drivers are twofold: sustained penetration in developed markets (US, Canada, Western Europe, Australia, New Zealand), expected to reach 14.7% market share in 2031; and rapid expansion in emerging markets, expected to reach 6.7% share in 2031.

Meanwhile, Goldman expects Starlink broadband ARPU to decline about 10% annually, from $60.37 in 2026 to $38.42 in 2031, mainly due to a shift toward lower monetization regions and SpaceX's proactive price concessions to optimize user scale.

Mobile (Starlink Mobile): Goldman expects connected devices to grow from 7 million in 2025 to 239.7 million in 2031, a CAGR of about 76%. Starting in 2028, SpaceX plans to launch direct-to-consumer (DTC) mobile services, with ARPU significantly higher than the existing direct-to-device (DTD) model. Goldman also notes SpaceX signed a deal with EchoStar in 2025 to acquire its 65MHz U.S. spectrum and global MSS spectrum licenses for about $19.6 billion (cash and shares), with completion expected November 2027, laying a spectrum foundation for DTC mobile business.

Connectivity segment GAAP operating margin is expected to steadily rise from 38.8% in 2025 to 54.1% in 2031, benefiting from fixed cost leverage and declining unit costs with constellation scale expansion.

AI: From Ground Compute to Orbital Data Centers

AI is the most elastic and uncertain segment in Goldman’s valuation framework. Goldman expects revenue to grow from $15.6 billion in 2026 to $589.2 billion in 2031, with a five-year CAGR of about 107%.

Compute scale is the core driver. SpaceX currently operates COLOSSUS I (~0.21GW, with about 100,000 NVIDIA H100 GPUs) and COLOSSUS II (~0.43GW, about 110,000 GB200 and GB300 GPUs) data center clusters. Goldman expects total compute power to grow from about 2GW at end-2026 to about 36GW at end-2030, with orbital (satellite) compute introduced from 2029 onwards (8.5GW in 2029, expanding to 26GW in 2030).

Monetization path: Goldman divides SpaceX’s compute monetization into three categories: inference (benchmark $2B/GW), hosting (benchmark $1B/GW), and internal training (not directly monetized). Goldman expects blended monetization rates between $1-1.5B/GW from 2027 to 2030. notably, SpaceX recently signed hosting agreements with Alphabet, Anthropic and Reflection AI, with pricing far above market ($2.5-3B/GW), reflecting scarcity premiums due to global supply-demand imbalance.

Terafab is another key variable in the AI segment. This AI chip vertical integration project, jointly promoted by SpaceX and Tesla, aims to design, manufacture, and deploy AI chips in-house, reducing reliance on third-party suppliers (especially NVIDIA GPUs). Goldman assumes SpaceX will invest around $120 billion in Terafab over the next five years, mostly concentrated in 2027-2029.

Ad business: Goldman expects ad revenue from X and Grok platforms to grow from $2.6 billion in 2026 to $36.3 billion in 2031, a CAGR of about 70%. By then, global (excluding China) digital ad market share will increase from about 0.4% in 2026 to about 2.3% in 2030.

AI segment GAAP operating margin is expected to jump from -1.8% in 2027 to 43.7% in 2028, reaching 62.4% in 2031, with annual improvement of about 1,700 basis points.

Sum-of-the-Parts, Discounted to Present

Goldman uses a Sum-of-the-Parts (SOTP) valuation method, assigning multiple to each segment's 2029 forecast data and discounting at 12% to the present.

Specifically: Space segment applies 15.0x EV/Sales (2029 forecast sales $7.9B, EV $118.1B); Connectivity applies 24.0x EV/EBIT (2029 GAAP EBIT $39.4B, EV $946.4B); AI applies 28.0x EV/EBIT (2029 GAAP EBIT $81.4B, EV $2.278T). Combined, 2029 enterprise value is about $3.343T; discounted, target price is $205.

Scenario analysis: downside target is $95 (down about 41% from current levels), upside target is $295 (up about 82% from current).

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The above highlights are from Wind Chasing Trading Desk.

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