SpaceX’s upgraded Starship launch on Friday delivered enough progress to keep the momentum intact behind Elon Musk’s $1.75 trillion IPO, while warning that full reusability of the rocket remains a work in progress.
Starship is critical to lowering SpaceX’s launch costs, expanding its Starlink satellite business – its cash engine – and supporting future undertakings such as space-based computing, deployment of orbital AI data-center satellites and human missions to the moon and potentially Mars.
“SpaceX did not need perfection from this Starship flight. It needed proof that the upgraded vehicle is moving in the right direction, and that is largely what investors saw,” said Mark Vena, CEO at SmartTech Research.
The company has spent more than $15 billion developing what it hopes will become a fully reusable rocket capable of carrying far larger payloads than existing launch systems.
SpaceX’s 12th test flight of a Starship prototype since 2023, and the first of its V3 iteration, was successful on most counts on Friday. It deployed a clutch of mock satellites and executed a controlled splashdown of the spacecraft in the Indian Ocean. But it failed to achieve a controlled landing of the Super Heavy booster, which tumbled into the Gulf of Mexico.
Starship Flight 12’s key goals and outcomes
Even an imperfect test can strengthen the investment case if it demonstrates measurable progress toward full reusability, Vena said.
Investors, analysts and fund managers are heavily bullish on the IPO, betting that Musk, known for turning high-risk engineering bets into dominant businesses, will deliver the highly ambitious promises he has made in SpaceX’s IPO filing.
“Full reusability is the key to unlocking dramatically lower launch costs,” said James Bruegger, chief investment officer at British investment firm Seraphim Space. “That’s where the real value lies.”
The company itself has warned that delays in development or cost targets could hinder deployment of next-generation satellites and AI infrastructure as they drive up costs, echoing concerns from a few investors that Starship could get trapped in a cycle of fixes and fresh failures, never quite proving an end-to-end working system.
“What we saw with the Starship launch is that it reduced the bear case risk that the Starship is stuck in a failure loop. So it doesn’t completely eliminate the execution risk,” said Jesse Nacht, a research associate at MarketVector Indexes. “Unless something were seriously catastrophic, I don’t think it would change expectations all too much.”
SpaceX’s Starship towers over competing heavy-lift rockets
