ARK Invest has presented a multi-billion-dollar thesis for SpaceX. The firm offered its perspective on the company as it is part of ARK Venture Fund’s overall portfolio.
ARK Invest is a long-time Tesla investor and Cathie Wood has deep faith in Elon Musk’s projects. The firm has now released its investment thesis for Space Exploration Technologies Corporation (SpaceX). ARK notes that the company designs and manufactures rockets and spacecraft. It offers launch services from its rockets and global communications through its Starlink satellite constellation, as well as Starshield, a satellite network for government agencies.
ARK points out that in 2017, SpaceX demonstrated the ability to reuse the first stage of its Falcon 9 rocket. In 2022, SpaceX was able to repair the first stage of a Falcon 9 in 21 days, and in 2023 the company will be launching the rocket approximately every four days. The rapid pace of development of SpaceX is evident.
ARK noted that despite the fact that SpaceX proved the reliability of reusable rockets back in 2017, the company still has no competitors on the market. According to the firm’s research, SpaceX’s ability to reuse rockets results in structurally lower launch costs than its competitors, which will be difficult to match. The company also has the most aggressive and advanced technological development plans for rockets, satellites, and interplanetary systems being implemented today.
ARK is betting on SpaceX’s newest reusable rocket, Starship. It is a two-stage super-heavy launch vehicle and spacecraft. It is the heaviest, tallest, and most powerful space launch vehicle in human history, and SpaceX plans to make Starship completely reusable.
As noted in the thesis, the biggest near-term opportunity for SpaceX is the Starlink satellite constellation. It is designed to provide global internet access. SpaceX has already launched thousands of Starlink satellites into orbit.
In the US alone, 42 million people do not have access to broadband. This means that offering broadband services to low-income communities in the US could represent a target market of approximately $10 billion per year. ARK calculated that assuming the average household consists of 2.6 people, that means the average monthly broadband bill is $50.
Meanwhile, billions of people around the world do not have regular access to the internet whatsoever. This means that there is still a huge group of people in the world that represent an attractive market opportunity. ARK believes the satellite communications market could approach $100 billion annually in the medium term, and Starlink is well-positioned to win the lion’s share of this.
Additionally, if Starship is successful in achieving rapid reuse, ARK’s research suggests there should be a $270 billion annual revenue opportunity from point-to-point transportation.
