Important points
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While Orbital AI data centers remain speculative, Starlink is already profitable and growing rapidly with a huge $1.6 trillion broadband and mobile connectivity market.
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Investors should keep an eye on Starlink Mobile’s rollout as direct-to-mobile services face technical, regulatory and competitive hurdles.
Most of the recent topics space exploration technology(NASDAQ: SPCX) Central to this were its artificial intelligence (AI) ambitions, including its absorbed Grok chatbot and plans for an orbital data center. Those headlines are provocative.
But SpaceX’s initial public offering (IPO), as the company is also known, hints at a prize that could end up being even more important: a connectivity opportunity that the company is pegging at about $1.6 trillion.
Forgot Nvidia in 2009? This unusual signal is flashing again.In 2009, a “double down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, a company 100 times smaller than Nvidia is flashing the same “full conviction” signal. Continued “
Image source: Getty Images.
opportunities for connection
The $1.6 trillion figure comes from Starlink, SpaceX’s satellite internet business, and is split into two parts. The company expects about $870 billion in fixed broadband (bringing the Internet to homes and businesses that terrestrial networks can’t easily reach) and about $740 billion in mobile services.
Starlink is already a flagship company for SpaceX, serving more than 10 million customers and generating the majority of the company’s revenue. The next stage of growth is Starlink Mobile. This is an initiative that connects ordinary smartphones directly to satellites and will eventually challenge traditional wireless carriers around the world.
Why AI could upend business
This is why I think connectivity has the potential to overshadow the AI story. The vision of orbital data centers is indeed bold, but it’s years away, unproven at scale, and still running out of money.
Starlink, by contrast, is real, growing fast, and already profitable. Connecting billions of people without reliable internet and providing a signal to every phone in dead zones is a concrete huge market that SpaceX is currently capturing. If one business is a working, cash-generating machine and the other is a promising experiment, the one that is working is usually more noteworthy.
A catch worth naming
However, I would like to keep the $1 trillion figure in mind. This $1.6 trillion is a market that can be addressed over the long term, and is not revenue that SpaceX can record right away. Skeptical analysts point out that spectrum limitations, cell site capacity caps, and the physics of transmitting data to unmodified phones could keep realistic mobile revenues at a fraction of the key numbers for years.
Wireless carriers are also banding together to blunt Starlink’s reach, including rivals such as: AST Space Mobile They are chasing the same satellite-to-phone dream. Turning a huge market into real profits requires huge capital and perfect execution.
Key points for investors
While SpaceX’s AI vision will continue to garner attention, connectivity could quietly become a driver of long-term value for the company. For investors weighing the stock, Starlink and its move into mobile, rather than the orbital data centers everyone’s talking about, seems like a more valid reason to be interested. I will be closely monitoring the rollout to direct cells as some of this $1.6 trillion opportunity becomes real money or remains a pitch deck slide.
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Mika Zimmerman has no position in any stocks mentioned. The Motley Fool owns a position in and recommends AST SpaceMobile. The Motley Fool has a disclosure policy.
