SpaceX is expanding Starlink — its most profitable segment generated $4.42 billion in operating profit in 2025, and the company now faces logistical hurdles to scale the satellite network further as it prepares for a potential IPO.
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SpaceX plans Starlink expansion after $4.4B profit in 2025
SpaceX is pushing ahead with an expansion of Starlink, the satellite-internet business that generated $4.42 billion in operating profit in 2025 and now serves more than 10 million subscribers, though the company must resolve several logistical challenges before it can scale further.
"Starlink is the engine of core earnings for the broader SpaceX ecosystem, and the expansion plan signals that management sees a clear path to doubling that subscriber base within the next 18 to 24 months," said Rachel Kim, an analyst at Edgen who covers AI infrastructure and cloud buildouts. "The question is whether the launch cadence and ground-station capacity can keep pace."
Starlink app downloads and monthly active users more than doubled in the first quarter compared with a year earlier, according to data cited in private-market research. The subscriber base reached 10 million in February 2025, up from roughly 4 million a year prior. Starlink's $4.42 billion in operating profit came as the broader SpaceX-xAI group posted a consolidated loss because of more than $20.7 billion in capital spending, over half of which was tied to AI infrastructure.
The expansion plan targets both consumer and enterprise markets, including direct-to-cell service and government contracts. SpaceX already holds a $1.8 billion contract with the National Reconnaissance Office through its Starshield division, and the xAI deal could strengthen its position for Pentagon AI contracts, according to private-market analysts. The company launches a rocket roughly every two days, a cadence that would need to accelerate to deploy the additional satellites required for expanded coverage.
What the expansion means for investors
SpaceX is targeting a valuation of $1.75 trillion and a $75 billion capital raise for what would be the largest initial public offering in history, potentially in late June 2026. Private-market pricing for SpaceX shares has risen sharply over the past 90 days, reflecting what investors describe as a scarcity premium, a Musk premium, and IPO optionality.
The Starlink expansion directly supports that valuation thesis. If the subscriber base can grow from 10 million to 20 million over the next two years at a similar average revenue per user, Starlink's operating profit could approach $9 billion annually, according to estimates from private-market analysts. That would make the satellite business worth more than the launch operations and the broader Musk ecosystem combined.
SpaceX is also being valued against AI infrastructure names rather than traditional aerospace or telecom companies, which has widened the valuation debate. The group's $20.7 billion in capital spending in 2025 — more than half on AI — shifted investor perception, with many now viewing SpaceX as an AI infrastructure play with a satellite distribution layer.
The main risks center on execution. The logistical challenges of scaling a satellite network include manufacturing capacity, regulatory approvals for spectrum and orbital slots, and the ground-station infrastructure needed to handle increased traffic. SpaceX did not disclose a timeline for the expansion or specific subscriber targets in its announcement.
Tesla investors who missed the first wave of the electric-vehicle maker's rally are watching closely. Tesla shares surged more than 4,500% from $10 in 2016 to over $450 in 2025, and many see SpaceX as the next Musk-helmed company with similar asymmetric upside. The portfolio effect — where AI, autonomy, defense, energy, satellites, and robotics become increasingly intertwined — is drawing crossover investors from both tech and aerospace funds.
This article is for informational purposes only and does not constitute investment advice.
