SpaceX Wins $1.6 Billion Space Force Contract: What It Means for the Company and Investors

The Big News: SpaceX’s New Government Contract

Space Exploration Technologies Corp. (SpaceX) just scored a major win: a $1.6 billion contract from the U.S. Space Force to fly 18 missions using their Falcon 9 rocket. Think of Falcon 9 as SpaceX’s reliable delivery truck for space—it’s the rocket they use most often.

Important Point: The flights are scheduled to be completed by the end of 2027. That’s about a year and a half of steady work.

What This Contract Looks Like in Simple Terms

Breaking Down the Numbers: SpaceX’s Launch Business

SpaceX isn’t just launching for the government—they’re the world’s go-to launch provider. Here’s how dominant they are:

• 70% of all global launches (not counting China) use Falcon 9
• In 2025, the launch business brought in $4.1 billion in sales
• That same year, they earned $653 million in EBITDA (think of this as "operating profit"—money left after running the business but before taxes and accounting adjustments)
• They carried 2,213 metric tons of stuff into orbit (that’s like launching over 1,500 cars into space!)

Important Point: Falcon 9 isn’t just SpaceX’s workhorse—it’s the world’s workhorse for getting things to space.

Why SpaceX’s Stock Has Fallen Over 40% Since Its IPO

SpaceX had a record-breaking IPO (Initial Public Offering—when a company first sells stock to the public), raising over $85 billion. That’s more than double the second-largest IPO ever. But since then, the stock has dropped more than 40%. Here’s why:

Two Main Worries Are Dragging the Stock Down

1. Valuation Was Too High

   • The stock was trading at ~100x annual sales
   • Translation: Investors were paying $100 for every $1 of revenue SpaceX made
   • For a capital-intensive business (rockets are expensive!), that’s way above normal
2. Lockup Expiration = More Shares for Sale
   • After an IPO, insiders (employees, early investors) are locked up from selling shares for a period
   • That lockup is expiring soon
   • The first unlock will double the shares available for public trading
   • More supply + same demand = lower price

Important Point: These aren’t "SpaceX is failing" problems—they’re "stock got too expensive too fast" and "lots of insiders want to sell" problems.

SpaceX by the Numbers: Revenue, Losses, and Debt

Let’s look at the financial report card. Remember: SpaceX is investing heavily in the future (Starship, Starlink, AI), so big losses aren’t necessarily a red flag—but they’re worth knowing.

2025 Full Year

• Revenue: $18.7 billion
• Net Loss: $4.9 billion
• Long-term Debt: ~$29 billion

Q1 2026 (First Quarter)

• Revenue: $4.7 billion
• Loss: $4.3 billion (almost as much as all of 2025 in just 3 months!)

Important Point: The first earnings report as a public company comes on August 4, 2026. That’ll be a big moment for investors.

The Bigger Picture: SpaceX’s Pivot to AI

Here’s where it gets interesting—and maybe a little confusing. SpaceX is now leasing data center capacity (basically, supercomputer space) to:

• Alphabet (Google’s parent company)
• Anthropic (maker of Claude, an AI competitor to ChatGPT)

This could bring in billions per month. But the author of the original article has concerns:

Why This AI Move Might Be a "Stopgap" (Temporary Fix)

Important Point: The $1.6B Space Force contract is nice, but it’s a modest addition to a $4B/year launch business. The real story is whether the AI pivot works.

Should You Buy SpaceX Stock Right Now?

The Motley Fool Stock Advisor team (a popular investment newsletter) did not include SpaceX in their "10 Best Stocks to Buy Now" list. For context:

• Their average pick returns 889% vs. 203% for the S&P 500
• Past winners: Netflix (2004 pick → $1,000 became $397,081), Nvidia (2005 pick → $1,000 became $1,166,221)

Before You Buy, Consider:

1. Valuation – Still pricey at ~100x sales?
2. Lockup expiration – More shares hitting the market soon
3. Massive losses – $4.3B in one quarter is a lot of red ink
4. AI strategy – Is leasing compute to rivals smart or desperate?
5. First earnings call – August 4, 2026 will reveal a lot

Important Point: This isn’t financial advice. Do your own research or talk to a financial advisor before investing.

Summary

FAQ: Your Questions Answered

1. Is SpaceX profitable?

Not right now. They had a $4.9 billion net loss in 2025 and a $4.3 billion loss in just Q1 2026. They’re spending heavily on Starship, Starlink, and now AI infrastructure.

2. Why is the Space Force contract only $89 million per launch?

That’s actually a competitive price for a reliable, proven rocket. Falcon 9 is reusable (the booster lands and flies again), which lowers costs. Government contracts also often have fixed pricing.

3. What is a "lockup expiration" and why does it matter?

After an IPO, insiders (founders, employees, early investors) sign a lockup agreement—they can’t sell shares for ~6 months. When that ends, millions of shares can hit the market at once, often pushing the price down.

4. Why is SpaceX leasing computers to AI companies instead of using them for Grok?

Great question! The author wonders the same thing. If Grok (SpaceX’s AI) is competitive, keeping that computing power in-house makes sense. Leasing it out suggests either: (a) they need cash now, or (b) they have more capacity than they need.

5. Should I wait for the August 4 earnings report before deciding?

Many investors would wait. The first public earnings call will give:

• Updated financials
• Management commentary on losses, debt, and AI strategy
• Guidance for the rest of 2026
  It’s a major milestone for a newly public company.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. The original content was published by The Motley Fool. Always do your own research or consult a licensed financial advisor before making investment decisions.