SpaceX stock rises with data center overhaul, budding UK defense deal in focus

SpaceX's stock price is climbing on Thursday as investors digest several developments impacting the rocket and satellite company. The most significant news originates from The Information, which reveals SpaceX and CEO Elon Musk are revolutionizing data center construction for the company. This shift prioritizes reliability over speed, leading to the installation of additional backup power and cooling systems, as well as more rigorous testing before data centers go live.

This change marks a departure from the rapid data center construction approach used by SpaceX's AI unit at its Colossus campus in Tennessee, where the first data center was completed in only 122 days but experienced frequent outages. Notably, over a dozen data center leaders have left SpaceX in recent weeks, replaced by SpaceX engineers.

Musk acknowledged the recent Memphis outage, stating the company is taking corrective action to prevent future occurrences. While the data center construction pace may slow, SpaceX's defense business is receiving a boost. Reuters reports that the UK has spent nearly $40 million on SpaceX satellite services, elevating the UK's dependency on Musk's company.

The Defense Ministry has purchased around $17.6 million worth of Starshield services, the military-grade version of Starlink with enhanced encryption, along with $22.3 million in standard Starlink equipment. The UK is the first non-U.S. country to publicly use Starshield. Despite these developments, SpaceX stock absorbed a new supply of shares, with 319 million insider shares (about 7% of insider stock) becoming eligible for sale on Wednesday, marking the 90-day point since SpaceX's June IPO.