SpaceX IPO: why Cathie Wood sees Starship as a major selling point for investors

Cathie Wood expects strong demand for Elon Musk's SpaceX shares after going public, despite the skepticism of part of the market about the company's valuation. And her main bet is on Starship rockets, Wood said, discussing the upcoming mega-listing on the YouTube channel of her fund ARK Invest. Rockets can make it as cheap as possible to deliver cargo into space and launch new directions - from the global Internet to orbital data centers.

While investors are increasingly looking at SpaceX through the lens of AI infrastructure, for ARK Invest the starting point for valuing the company is Starship, Cathie Wood said. If Starship becomes a stable launch system, the company could dramatically reduce the cost of getting cargo into orbit - from about $1,000 to less than $100 per kilogram, ARK predicts. That would allow SpaceX to deploy a low-orbit satellite constellation more quickly. One fully loaded Starship is capable of generating about $1 billion in revenue annually with a five-year satellite life cycle.

Cheaper launches are expanding several markets for SpaceX, according to ARK Invest. The first is Starlink. Wood says that a few years ago, the fund estimated the service's potential market at about $34 billion because it saw it mainly as a connection for rural, water and remote areas. Now SpaceX itself is writing about $1.6 trillion: with cheaper launches, Starlink is moving beyond niche satellite communications and starting to compete for the broader telecom and internet market.

The second trend is orbital computing. ARK Invest points out that at delivery costs below $300 per kilogram, orbital data centers become commercially viable, and as they drop to $100 per kilogram, they can compete with terrestrial infrastructure for AI.

Wood said demand for SpaceX stock in the private market already exceeds the parameters of the proposed $75 billion to $85 billion offering. If investors begin to value SpaceX through a broader growth scenario - the expansion of Starlink into the larger telecommunications market, coupled with the development of orbital data centers and long-term projects related to the moon and Mars - the securities could get a strong boost after going public.

The skepticism of some analysts, as the founder of ARK Invest explains, is due to the risk of high competition. But Wood believes that no one can match SpaceX in launch costs. "The closest analog (Blue Origin - Opinvest) just last week blew its rocket to smithereens. I don't think it was actually a good thing for SpaceX, but I think it's just an indication of how complex rocket engineering is. So it's a unique company at a unique time in the market," said ARK Invest chief futurologist Brett Winton.

SpaceX is going to place about 555.6 million shares at $135 on the Nasdaq exchange under the ticker SPCX. Thus, the company expects to raise about $75 billion at a valuation of about $1.77 trillion. Listing is scheduled for June 11, trading should begin the next day.

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