Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk believes Starlink could become a massive business, with AI and robotics driving bandwidth demand and potentially pushing annual revenue above $1 trillion.
Starlink Could Become a Cash Machine
Earlier this week, former Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) executive and venture capitalist David Friedberg made a bullish case on the latest episode of the All-In podcast, citing Starlink’s rapid subscriber growth and strong financial performance.
Friedberg said Starlink had 12 million subscribers after doubling its user base year over year, while its connectivity business generated $4.29 billion in revenue, up 66% year over year.
He estimated that continued growth could eventually push Starlink toward $40 billion in annual revenue and potentially $30 billion in annual free cash flow.
“Starlink’s just an unbelievable juggernaut cash machine,” Friedberg said, arguing that the business alone could eventually support a valuation approaching $1 trillion.
Musk Says Starlink’s Potential Is Even Bigger
Musk responded to a video of Friedberg’s comments on X, suggesting the venture capitalist’s projections may actually be too conservative.
“Far more than that,” Musk wrote.
He said bandwidth demand could surge as AI systems and robots require more data connectivity than humans do.
Musk added that even if the overall communications market merely doubles, he expects Starlink could eventually capture at least 25% of the market outside China.
That, he said, could translate into more than $500 billion in annual revenue.
Musk also said it is “not out of the question” that Starlink could eventually carry more than 50% of global internet traffic, potentially generating more than $1 trillion in annual revenue.
Starlink Mobile Could Expand the Market
During the company’s earnings call, SpaceX president Gwynne Shotwell said Starlink Mobile is expected to begin service at the end of 2027 and could attract customers from AT&T Inc. (NYSE:T), Verizon Communications (NYSE:VZ) and T-Mobile US (NASDAQ:TMUS).
T-Mobile CEO Srini Gopalan, however, has downplayed the threat, arguing that satellite connectivity will likely complement traditional cellular networks rather than replace them.
Starlink’s direct-to-phone service currently uses about 5 MHz of partner spectrum, but FCC-approved $19.6 billion deals will give SpaceX access to 65 MHz of EchoStar spectrum.
Combined with 10 times more next-generation mobile satellites, the upgrade could make Starlink’s service 100 times more capable, Shotwell said.
Price Action: SpaceX closed at $133.11 on Friday, up 15.83%, while shares gained another 0.74% to $134.10 in after-hours trading, according to Benzinga Pro.
According to Benzinga Edge Stock Rankings, SpaceX remains bearish across the short-, medium- and long-term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Samuel Boivin / Shutterstock.com
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