David Friedberg Says 1 Piece of SpaceX Could Be Worth a Trillion Dollars Inside 18 Months, ‘That I Think Funds All of the Rest of This’

"The Starlink business alone could be a trillion-dollar market cap. Within two years, within 18 months, let's say," David Friedberg said on the All-In podcast. "That I think funds all of the rest of this as kind of science projects and upside." Friedberg corrected himself from two years down to 18 months mid-sentence, which makes the call more aggressive, not less. When he said it, all of SpaceX (SPCX) — rockets, Starship, the fabs, the AI business, and Starlink together — was worth about $1.4 trillion.

Friedberg also did the arithmetic out loud, which is rarer and more useful than the number itself. “Starlink alone could be generating on the order of $40 billion of revenue top line with a huge amount of that flowing to free cash," he said. "That could be a $30 billion free cash flow within the year […] If you just put a 30X multiple on that, which I think you can because these subscription businesses are very high renewal rate, very low CAC.”

So, $40 billion of revenue, $30 billion of free cash flow, 30 times. That is $900 billion rounded up.

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These are three clear assumptions, and each one can be checked against what SpaceX actually filed for the second quarter.

Let's start with revenue. The connectivity segment did $4.291 billion in revenue in Q2, up 32% sequentially and 66% year-over-year (YOY), with $2.597 billion of adjusted EBITDA. Annualized at the current run rate, that is roughly $17 billion. Getting to $40 billion inside a year means more than doubling it.

The subscriber math shows where that would have to come from, and it is not obvious. Starlink ended the quarter with 12 million subscribers, double a year earlier. At $66 of monthly ARPU, call it $2.4 billion a quarter from consumer subscriptions, with enterprise and government making up the rest of the segment and growing 63% sequentially.

ARPU is the awkward number. It was $85 a year ago. Subscribers doubled while revenue per subscriber fell 22%, which is what happens when growth comes from cheaper markets and cheaper plans. A $40 billion revenue line at $66 ARPU implies a subscriber base several times today's level.

Then there's the margin, which is the load-bearing assumption. Friedberg's model needs roughly $0.75 of free cash flow on every revenue dollar. The segment's adjusted EBITDA margin was 60.5%, but adjusted EBITDA is a company-defined measure. SpaceX warned plainly in the Q2 report that "other companies in our industry may calculate Adjusted EBITDA and Segment Adjusted EBITDA differently than we do or may not calculate them at all." On a GAAP basis, the connectivity segment's income from operations was $1.656 billion, a 38.6% margin. The gap is $805 million of depreciation and $136 million of stock compensation. Depreciation is not a bookkeeping artifact for a satellite constellation; the satellites genuinely wear out and have to be replaced.

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Capex is the other side of that. SpaceX spent $18.4 billion in the quarter, with $15.8 billion of that total spent on AI. Free cash flow is what is left after that, and the V3 satellites Starlink's next phase depends on are not yet in operational orbit, while the 20 deployed on July's suborbital Starship flight burned up on re-entry as planned. Barchart has already made the case that the market is handing you the AI business for free; Friedberg's view is that argument taken to its limit.

Finally, there's the multiple — 30 times free cash flow is not a neutral choice. The big U.S. telecoms trade around nine to 10 times equity free cash flow. Netflix (NFLX) and Spotify (SPOT) — the closest large subscription comparables — sit near 27 times and 26 times. Friedberg's 30 times is a bet that Starlink is priced like a consumer software subscription and not like the connectivity business it sells.

To his credit, he labeled it. "I'm kind of making a bull case," Friedberg said in the same breath, while All-In panelists are investors discussing assets they may hold. It is also worth noting the tape moved underneath him. SPCX stock closed at $108.27 on Aug. 5 and closed at $133.11 on Aug. 7, a rally of roughly 23% in two sessions as the first lockup expiry passed, taking the market cap to about $1.8 trillion. SpaceX is still more than 40% below its 52-week high, and Barchart wrote up the billions of dollars that came off along the way. CEO Elon Musk's first public earnings call was two days before Friedberg spoke.