Rating Upgraded, AI Risks Noted
SpaceX Achieves Investment-Grade Credit Rating as AI Ambitions Raise Spending Concerns
Key Points
S&P said its model anticipates leverage would peak in 2028 at an adjusted 1.2x (not just below 2.0x), then “improve year by year” as SpaceX expands Starlink/“connectivity” revenue and profitability and begins monetizing its AI operations.
S&P characterized SpaceX’s AI ramp as likely to create a near-term cash crunch, saying aggressive capital spending tied to the AI push is “expected to produce significantly negative free cash flow in the near term,” while also noting SpaceX had committed in its IPO filing to maintain leverage consistent with sustaining an investment-grade rating.
On the AI business, S&P’s rationale described a specific “reusable rocket technology” approach aimed at building “lower-cost data centers powered by solar energy,” with monetization via “long-term leases” and cited deals such as leases to Anthropic as part of the demand thesis.
S&P also highlighted SpaceX’s plan to use Starship to place next-generation satellites that host AI accelerators in low-Earth orbit, leveraging “continuous solar power” and “reduced cooling requirements,” with S&P analysis projecting operational costs could be “over 90 percent” lower than Earth-based alternatives.
Reuters reported market reaction details after the ratings: SpaceX shares fell about 1.1% in extended trading, and the company’s valuation had surged past $2 trillion following its blockbuster Nasdaq debut—prompting investors to weigh that valuation against the cost burden of the AI push.
SpaceX has earned investment-grade credit ratings from all three major agencies — S&P Global Ratings (BBB), Moody's (Baa1), and Fitch (BBB+) — each with a stable outlook, following the company's blockbuster Nasdaq IPO in June 2026. The upgrades mark a major milestone for a company that once operated in speculative-grade territory, and open the door to cheaper debt from institutional investors like pension funds and insurers.
The ratings landed as SpaceX's valuation surged past $2 trillion after its debut. But shares slipped about 1.1% in extended trading on June 18, Reuters reported, as investors weighed the company's rich price tag against warnings that its artificial intelligence push will drain cash in the near term.
Starlink Cash Flow Anchors the Investment-Grade Case
Rating agencies pointed to two pillars holding up the BBB rating: SpaceX's dominance in rocket launches and Starlink's growing profits. SpaceX has delivered over 80% of global mass to orbit since 2023, according to Fitch. Starlink now serves 12 million subscribers and generated $1.19 billion in profit in the most recent quarter — making it the company's only profitable segment, Investing.com reported.
S&P Managing Director Naveen Sarma said the BBB rating "balances the solid foundation of the launch and connectivity businesses" against risks tied to SpaceX's "still-nascent AI business." S&P projects adjusted leverage will peak at just 1.2x in 2028, well below the 2.0x ceiling the company pledged to maintain in its IPO filing.
AI Ambitions Will Burn Cash Before They Print It
S&P was blunt about the cost of SpaceX's AI push. The agency said aggressive capital spending tied to AI is "expected to produce significantly negative free cash flow in the near term." SpaceX reported a net loss of $4.28 billion on revenue of $4.69 billion in Q1 2026, according to Asia Business Daily.
SpaceX has already locked in large AI compute deals to support the revenue case. Forbes reported a $1.25 billion-per-month lease deal with Anthropic and a $920 million-per-month deal with Google — roughly $26 billion in annual revenue at run-rate. S&P cited the Anthropic lease specifically as evidence of real demand for SpaceX's AI infrastructure.
SpaceX Plans Orbital Data Centers Powered by Sunlight
SpaceX's AI strategy goes beyond Earth-based data centers. The company plans to use its Starship rocket to place large satellites carrying AI chips into low-Earth orbit. S&P's analysis said these orbital units could run on "continuous solar power" with "reduced cooling requirements" — and that operating costs could be "over 90 percent" lower than ground-based alternatives.
Not everyone is convinced. Nvidia CEO Jensen Huang has called space-based data centers a "dream for now," noting that 95% of a server rack's mass is cooling equipment — a problem that gets harder, not easier, in the vacuum of space, according to Tom's Hardware. SpaceX says deployment of its first AI satellites could begin by 2028.
Investment-Grade Status Unlocks a $20 Billion Bond Sale
The timing of the ratings was no accident. Bloomberg reported — cited by Asia Business Daily — that SpaceX is preparing its first investment-grade bond offering, totaling at least $20 billion. Lead banks Goldman Sachs, JPMorgan, and Morgan Stanley are expected to begin investor presentations around June 22. The sale would refinance a $20 billion bridge loan SpaceX took on ahead of its IPO.
Investment-grade status matters because large institutions — pension funds, insurance companies — are often barred by their own rules from buying lower-rated debt. With BBB or better in hand, SpaceX can now borrow from that vast pool at lower interest rates. SpaceX is also expected to join the Nasdaq 100 by July 6, which would trigger automatic buying from index-tracking funds, according to Basenor.
Sentiment
Mostly PositivePublishers
18
Articles
57
Reach
75
