Key Points

Orbital AI data centers remain hypothetical, but Starlink is already profitable and expanding quickly in a vast $1.6 trillion broadband and mobile connectivity market.
Direct-to-cell service encounters technical, regulatory, and competitive obstacles, so investors should monitor Starlink Mobile's progress.
10 stocks we like better than Space Exploration Technologies

Recent attention around Space Exploration Technologies (NASDAQ: SPCX) has focused on its artificial intelligence plans, such as the Grok chatbot it acquired and ideas for orbital data centers. Those developments are intriguing.

Yet the upcoming public offering from SpaceX highlights a larger potential reward: a connectivity market the company estimates at about $1.6 trillion.

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The connectivity opportunity

The $1.6 trillion estimate stems from Starlink, SpaceX's satellite internet unit, and splits into two parts. The company projects around $870 billion from fixed broadband services reaching homes and businesses beyond ground networks, plus about $740 billion from mobile offerings.

Starlink already drives most of SpaceX's operations, with over 10 million customers and the majority of revenue. The upcoming phase involves Starlink Mobile, which aims to link standard smartphones to satellites and eventually compete with global wireless providers.

Why it may eclipse the AI business

Connectivity could outpace the AI narrative for clear reasons. An orbital data center concept is ambitious but remains distant, untested at large scale, and continues to consume cash.

Starlink, however, operates today, grows rapidly, and generates profits. Serving billions without reliable internet access, along with providing phone signals in remote areas, represents a concrete and sizable market that SpaceX is addressing immediately. When one unit produces cash and the other tests ideas, the proven operation typically takes precedence.

The catch worth naming

Still, the trillion-dollar projection deserves context. It reflects a long-term addressable market rather than near-term revenue. Analysts point out that spectrum constraints, cell-site limits, and the challenges of transmitting to standard phones may restrict actual mobile income to a fraction of the total for years.

Wireless providers are also uniting to limit Starlink's expansion, while competitors such as AST SpaceMobile pursue similar satellite-to-phone goals. Converting a large market into profits requires substantial investment and precise execution.

The takeaway for investors

SpaceX's AI plans will draw headlines, but connectivity may ultimately drive the company's enduring value. For those evaluating the stock, Starlink and its mobile expansion offer more solid grounds for interest than orbital data centers. Tracking the direct-to-cell launch matters, as that effort will determine whether part of the $1.6 trillion opportunity turns into revenue or remains a presentation slide.

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Micah Zimmerman holds no positions in any mentioned stocks. The Motley Fool maintains positions in and recommends AST SpaceMobile. The Motley Fool follows a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.