SpaceX Stock Forecast: $8 Billion Spectrum Deal Turns Starlink Into a Mobile Challenger

On October 8, SpaceX announced an agreement to acquire the nationwide, low-band 800 MHz spectrum from Grain Management for roughly $8 billion. This acquisition is awaiting FCC approval.

Low-band spectrum is able to cover broader geographical areas, penetrate buildings better and provide better signal strength than mid-band or high-band spectrum. Starlink Mobile could benefit greatly from these proposed spectrum acquisitions.

This pending spectrum acquisition signals a change for SpaceX, Starlink has primarily complemented land-based cellular networks. If approved, nationwide low-band spectrum could leave Starlink primed to take on the Big Three U.S. Carriers.

American Airlines expanded its Starlink rollout on Oct. 8 to its mainline fleet of more than 1,000 aircraft. Rollout to the additional aircraft will begin next year.

Recurring enterprise revenues from in-flight connectivity are important to the airlines. SpaceX's Q2 enterprise and government connectivity revenue more than doubled to $1.81 billion from the prior year's $867 million.

SpaceX reported 12 million Starlink users at the end of Q2, compared to the 6 million users at the same time last year and the 10.3 million users at the end of Q1. Starlink connectivity revenue grew 66% to $4.29 billion, and operating income rose 79% to $1.66 billion.

Adjusted EBITDA increased 64% to $2.60 billion. Consumer revenue rose 44% to $2.49 billion. Enterprise and government revenue more than doubled to $1.81 billion.

Monthly ARPU fell to $66 from $85 a year ago as SpaceX expanded to international markets. The final security and spectrum approvals for the use of Starlink in India are still pending.

SpaceX is searching for $40 billion in financing to acquire Nvidia's AI chips, according to Reuters. The deal is said to consist of $10 billion in bank financing and $30 billion in investment grade debt.

In Q2, SpaceX reported $2.56 billion in AI revenue and $1.15 billion in AI adjusted EBITDA. However, SpaceX's AI capital expenditure was $15.83 billion, making total company capex $18.37 billion.

AI is definitely a fast-growing business for SpaceX, but it is rapidly consuming capital much faster than SpaceX's more established businesses.

For Q2, SpaceX reported revenue of $7.81 billion, a 92% increase from the same quarter last year. Adjusted EBITDA for the quarter was $3.54 billion, and SpaceX reported a net loss of $541 million.

SpaceX finished the quarter with approximately $100 billion in cash, cash equivalents and marketable securities, as well as $47.5 billion in backlog. With that cash and backlog, SpaceX is well positioned to fund its acquisitions, as well as its other businesses like Starlink and Starship.

Flight 14 on Starship successfully reached orbit on September 28 and deployed 26 Starlink V3 satellites. A booster Raptor engine shut down during ascent, while an upper-stage engine issue shortened the mission.

Flight 13, prior to this mission, also deployed 20 V3 satellites. As a result, Flight 14 was the first to deliver V3 satellites to orbit.

Despite this, the recent development of V3 satellites requires Starship to continue critical missions. Engine issues on Starship shows the system is still undergoing development.

By October 5, one of SpaceX's subsidiaries had filed for a 32.4 mile long natural gas pipeline near Cape Canaveral to service the company's launch activities.

The company's launch schedule for the month of October, shows a Starlink launch window spanning the 12th and 13th, as well as the CRS-35 mission to the International Space Station on the 13th. The cadence shows SpaceX has a major competitive edge for the month of October.

SPCX closed at $162.57 on October 9 after pulling back from its recent highs at $172.14. The price is above both the MA’s and the rising trend line, and as such, the larger trend is still viewed as bullish.

SpaceX Stock Price Chart - Source: Tradingview

RSI is at 56, below its signal line of 63 but above the 50 neutral level. Immediate resistance is at $163.36, with the larger resistance level at $172.14. A 4-hour close above the $172.14 level would open the way up to the $190.16 level.

Support is at the $154.36 to $154.09 area. A 4-hour close below this level would open the way down to $150.14, with lower support at $146.86.

My base case remains bullish as long as price holds above the $154.09 area.

Key Levels

•  Latest Close Price: $162.57

•  Major Support: $154.36 to $154.09, $150.14, $146.86

•  Major Resistance: $163.36, $172.14, $190.16

•  RSI: approx. 56

•  Recovery trigger: 4-hour close above $163.36

•  Breakout trigger: 4-hour close above $172.14

•  Breakdown trigger: 4-hour close below $154.09

First, SpaceX is in the spotlight as they just agreed to spend $8 billion on spectrum. This could help Starlink Mobile become a national wireless competitor. Additionally, Starlink subscriber growth and SpaceX’s investments in artificial intelligence (AI) are creating further opportunities and accelerating growth for SpaceX.

A close above $172.14 on the 4 hour time frame could signal a longer-term bullish target of $190.16. On the other hand, a close below $154.09 could signal a breakdown and a longer-term bearish bias.

SpaceX is quickly vertically integrating into AI and telecommunications. SpaceX’s latest spectrum acquisition deal could provide an opportunity to transform mobile services in the same way Starlink disrupted satellite broadband. With the proposed acquisitions, capital will be stretched and aggressive cash flow negativity could become the norm. From a valuation standpoint, SpaceX will be focused on cash and capitol intensity. Technically, SpaceX is in a bullish trend as long as it holds above $154.09.