SpaceX posted $14.6 billion in Q3 sales and a profit, but $19.6 billion in quarterly buildout and cancelable cloud deals leave the $2 trillion value stretched. I see 26% downside to $113.71.
Key points
- $14.6 billion in Q3 2026 sales grew 161% from a year ago and turned a $4.4 billion profit in Q3 2026.
- $19.6 billion in Q3 2026 buildout was 134% of sales in Q3 2026, with $16.4 billion for compute in Q3 2026.
- $63 billion backlog in Sep 2026 covers less than five months of Q3 2026 sales pace after cloud ramp in Q3 2026.
The call
The market is too optimistic. The value is $2.04 trillion at $154.14 a share in Oct 2026. That needs $148 billion of 2027 sales at 13.8 times sales in 2027. Cancelable cloud deals cannot support that rent.
Quarterly revenue jumps on cloud deals ($ billions)- Reported revenue
- My forecast
SEC 8-K Exhibit 99.1 Oct 20 2026; E is my forecast.
I expect cash burn to force a lower value. Q4 2026 buildout is guided at $35 billion to $40 billion. That dwarfs $8.8 billion in quarterly cash earnings in Q3 2026. Connectivity earns real profit while compute spent $16.4 billion for $7.6 billion of sales in Q3 2026.
Valuation
| Item | Value |
|---|
| 2027 sales estimate | $148 billion in 2027 |
| Enterprise value at 10.6 times sales in 2027 | $1,562 billion in 2027 |
| Plus net cash in 12 months to Oct 2027 | $30 billion in Oct 2027 |
| Target across 14.0 billion shares in Oct 2027 | $113.71 a share in Oct 2027 |
Compute eats cash while connectivity pays (dollars billions)SEC 8-K Exhibit 99.1 Oct 20 2026; capex is buildout spending.
Enterprise value means cost for all shares plus debt minus cash. The 10.6 times blend pays 12 times for cloud, 6 times for links and 4 times for launch. Downside of 26% to Oct 2027 calls for a Strong Sell.
Risks
- Cloud deals renew and Grok demand jumps, seen in backlog and deferred revenue growth through Q1 2027.
- Starship reuses both stages and cuts satellite cost, seen in launch pace and link margins through 2027.
- Tesla deal or cheap debt funds the buildout, seen in filings and cash balance through H1 2027.
What would change my mind
Firm multiyear cloud contracts plus buildout below sales for two quarters through 2027 would support a higher value.