Space Exploration Technologies Corp. (NASDAQ: SPCX) is expanding Starlink's U.S. wireless ambitions through a nationwide spectrum purchase, while analysts weigh the opportunity against the cost and technical challenges of competing with established telecom carriers.
SpaceX agreed to acquire a nationwide low-band wireless spectrum portfolio from Grain Management in a deal reportedly valued at $8 billion.
The stock has risen more than 20% above its IPO price and, according to CNBC host Scott Wapner, ranks as the sixth-largest company in the Nasdaq 100 behind NVIDIA Corp. (NASDAQ: NVDA), Apple Inc. (NASDAQ: AAPL), Alphabet Inc. (NASDAQ: GOOG) (NASDAQ: GOOGL), Microsoft Corp. (NASDAQ: MSFT) and Amazon.com Inc. (NASDAQ: AMZN).
MoffettNathanson Sees Strong Business, but Questions Wireless Economics
MoffettNathanson research analyst Julie Zhu said she views SpaceX's execution and leadership positively but questioned the market's reaction to the spectrum deal.
She told CNBC on Monday that Starlink's satellite-based wireless service still faces major disadvantages against the Big Three (implying AT&T Inc. (NYSE: T), T-Mobile US Inc. (NASDAQ: TMUS) and Verizon Communications Inc. (NYSE: VZ)).
Zhu said the service is "not competitive with the Big Three and what they're offering," pointing to weaker signals over long distances and the difficulty of matching terrestrial networks.
She also noted that the three carriers still control roughly 14 to 15 times more spectrum than SpaceX, even after the acquisition.
Building comparable coverage would also take years and significant capital.
Broadband, AI Remain Key Growth Drivers
Zhu said SpaceX still has meaningful value across its broadband business and other growth opportunities.
She also pointed to the company's AI operations as an important part of its valuation, saying Grok and xAI will require continued investment.
SpaceX must balance those opportunities against other capital demands, including roughly $100 billion earmarked for Louisiana and Starship development, additional research spending and broader rocket investment.
Zhu said the AI business currently offers a one-year payback, while the potential return from a major wireless buildout remains uncertain.
MoffettNathanson maintains a $142 price forecast on SpaceX.
The analyst's valuation reflects concerns that investor expectations may be running ahead of the economic returns SpaceX can generate from its wireless ambitions.
Isaacson Sees a Much Larger Opportunity
Perella Weinberg advisory partner and Tulane University professor Walter Isaacson took a more optimistic view of the wireless opportunity.
"He bid on it, he got the 800 MHz spectrum," Isaacson told CNBC. "This is huge," Isaacson said, pointing to Musk's view that the potential market could approach the size of the global economy.
Bernstein Sees Opportunity for Tower Operators
Bernstein analyst Madison Rezaei said SpaceX could become a fourth major customer for U.S. tower companies.
"What we suddenly have is a new carrier on the tower companies," Rezaei said. She estimated that another tenant could lift recurring tower revenue by roughly 10%-15%.
Rezaei also said SpaceX is more likely to partner with an existing wireless carrier than build an entirely new tower network, while Zhu questioned whether such a roaming agreement would ultimately materialize.
Price Action: T-Mobile US shares were up 0.81% at $153.09, AT&T shares were down 0.31% at $22.42, Verizon Communications shares were up 0.96% at $43.19 and SpaceX shares were down 0.77% at $162.16 during premarket trading on Tuesday, according to market data.
