Space Exploration Technologies Corp. SPCX shares came under pressure after Starship's 13th test flight scheduled on Thursday was aborted moments before take-off. The stock’s price fell below the IPO price on Thursday following this incident. After raising a record-breaking $75 billion through its June initial public offering, SpaceX has remained one of the market's most closely watched growth stories.
With the leading-edge designing, manufacturing and rocket launching capabilities, SpaceX has gained solid market traction over the past few years. However, are the recent developments a worrying sign for investors, and does it change SpaceX’s long-term investment case?
Starship Remains Vital to SpaceX’s Growth Initiatives
SpaceX’s launch franchise is the foundation of the investment case. The company has completed about 650 orbital launches and has launched more than 80% of global mass to orbit since 2023, supported by Falcon reusability and high cadence. While Falcon 9 currently serves as SpaceX's primary launch vehicle, Starship represents the company's next-generation fully reusable launch system. Engineered as one of the world’s largest and most powerful reusable launch vehicles, Starship is expected to significantly reduce the cost while carrying a substantially higher payload.
The Starship project has a significant execution risk owing to its high complexity. This risk is not limited to the Space segment because the Connectivity and AI segment also relies on future launch throughput to reach its planned scale. The company faces competition from Rocket Lab Corporation RKLB. Rocket Lab has been steadily extending its commercial launch capabilities through its Electron rocket and the upcoming Neutron launch vehicle. Electron achieved 21 launches in 2025 with 100% mission success, reinforcing reliability and customer retention.
SpaceX has repeatedly adopted a gradual development approach over the years. In each test flight, regardless of success or not, the company gathers valuable engineering data that helps improve the system. Given the high complexity of the process in developing reusable launch systems, temporary setbacks are not uncommon. Despite Rocket Lab’s growing prowess in commercial launch, SpaceX remains the leader in the industry, backed by its launch cadence, payload capability and reusable rocket technology.
Starlink Remains a Major Growth Engine
Beyond Starship, Starlink remains one of SpaceX's strongest long-term growth drivers. As of March 31, 2026, the company boasts a subscriber base of around 10.3 million. With approximately 9,600 satellites in orbit, Starlink service is available in 164 countries and markets. Solid subscriber addition, expanding global coverage and continuous improvement in networking capacity are major driving factors. The company has also developed one of the largest satellite-to-mobile constellations and provides direct-to-device voice, messaging and data services. Expanding the Starlink business is providing the company with better earnings visibility and a diversified revenue mix. Strong recurring revenue from this segment will continue to support overall revenue growth and enable SpaceX to go through the development challenges of Starship.
However, it is to be noted that Starlink’s business faces competition from Viasat, Inc. VSAT in the satellite-based broadband internet space. Viasat has built a strong presence in aviation, enterprise and government communications. It has completed the next-generation global ViaSat-3 constellation with the successful launch of ViaSat-3 Flight 3 on April 29, 2026, targeted to the Asia-Pacific region. Starlink’s rapidly expanding low-Earth-orbit constellation and a strong focus on technology upgrades are expected to give a competitive edge in the long run.
Should Investors Worry?
The launch hiccup may impact investors’ sentiment in the near term. However, some key things to take into account are that the launch was aborted automatically, indicating that engine monitoring, safety systems and software worked. The company is proceeding with corrective action. It will replace two raptor engine and is aiming to complete the launch early next week.
However, SpaceX is scaling several capital-intensive platforms simultaneously. Despite SpaceX's strong long-term growth prospects, execution remains critical. Capital expenditures increased to $20.7 billion in 2025 as the company continued investing heavily in Starship development and Starlink expansion. While occasional testing setbacks are expected, prolonged delays could also delay commercialization and revenue-generating opportunities.
SpaceX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).