SpaceX: Where's the Beef?

A client asked me a wonderfully simple question the other day. It was about the investment world’s recent fascination: SpaceX offering shares of its company to the investing public.

For the last 24 years, SpaceX has operated as a private company. The only way to have purchased shares was to have been an employee of the company or to have been part of a select group of investors that had a chance to buy into the company when it needed funding.

Without that access, there was no way to become an owner of SpaceX.

That changed on June 12. On that day, SpaceX began offering its shares to the public via the Nasdaq stock exchange. If you want to become an owner of SpaceX today, you can do it. As of Friday, you could buy one share for $185, which would give you an ownership stake of 0.0000000076% in the company.

SpaceX is currently valued at $2.4 trillion, making it the sixth largest publicly traded company in the U.S. As for profits, which is the money left over after accounting for all company expenses, SpaceX lost $4.9 billion in 2025.

And that’s great context for the client’s question, which essentially was, “Why is SpaceX worth so much more than other companies that generate bigger profits?”

Again, SpaceX lost money last year. So how does that make sense? Well, it’s all about the future.

I think the best way to explain why SpaceX is valued so highly, despite its losses, is to consider a cow.

Let’s say you are looking to break into the cattle market. But you’re going to start small. In fact, you plan to buy just one cow. Your strategy is to breed the cow and use its offspring to grow your herd. Once you have a holding pen constructed and feed at the ready, you hook up your stock trailer and head to a livestock auction.

As the cattle are escorted by potential buyers in the auction ring, you start sizing up your options. Now, let’s make this more interesting and say you have a supernatural gift for divining how productive cows will be throughout their lives in rearing healthy, vibrant calves.

If you knew one cow in particular would, without a doubt, produce twin calves that are strong and energetic every time that it’s bred, would you pay some amount more for that cow compared to the others that would yield just one calf each breeding season?

Of course.

That cow would help you grow your herd faster. There’s value in that. You would essentially be betting on the future of the cow.

That’s exactly what SpaceX investors are doing today. You absolutely cannot justify SpaceX being worth $2.4 trillion if its business doesn’t grow from today’s levels. But long-term shareholders aren’t considering the company as it exists now. They see potential in the future for incredible profits.

They think SpaceX is a twin-prone cow, to perhaps overextend our analogy.

In fact, if you look at its regulatory filings, SpaceX discusses some of the ways it hopes to generate future income. The company cites activities such as asteroid mining and colonizing Mars. The expectations are lofty.

The biggest question today for SpaceX shareholders is, “Will the company deliver?”

If you pay a premium for a cow, believing it will be more productive, but it turns out twins never arrive and the singles it does birth are weak and susceptible to infections, your upfront investment will be in vain.

Similarly, if SpaceX can’t achieve its lofty goals, long-term investors will be disappointed in the future.

For now, however, many investors are convinced SpaceX will eventually become a cash cow.