$RKLB: How Will SpaceX's Massive IPO Affect Rocket Lab's Recent Surge?

Added: 2026-05-31

[00:00:00]I guess let's just talk. And I know we hit on Rocket Lab every week cuz we're you're selling every week.

[00:00:06]It crossed $150 a share. I remember feels like I don't know 2 weeks ago when it was crossing $100 a share. It probably wasn't 2 weeks ago, but it feels that way.

[00:00:18]Um And that was crazy.

[00:00:20]>> It was It may have been less than 2 weeks ago. I mean it was It's Yeah, it's been insane.

[00:00:24]>> [laughter] >> Um Is Is Rocket Lab just solely moving up in because of the excitement of the SpaceX IPO or is there any other reason?

[00:00:36]>> Well, at 120 times revenues, this is sort of like where it gets into dangerous and high-risk territory, right? Like I used to make fun of Palantir because Palantir was being valued at over 100 times revenues.

[00:00:50]Uh well, guess what? It's no longer being valued at over 100 times revenues.

[00:00:54]Palantir's down something like 40% from its highs despite crushing its most recent quarter, right? Um and and it's still not not a cheap stock, right? And this is sort of like what we're looking at with Rocket Lab is that it's not a cheap stock anymore and a lot of its potential and continued growth for you know, now you have to keep going out further and further out in order to justify its current valuation.

[00:01:21]And um And And that just makes it really high-risk. So, with it still being you know, like or it was about 20% of my portfolio and it you know, even as I kept selling because it would make new highs, it would remain at 20% of my portfolio.

[00:01:36]Today, I think as of close it's like around 16% of my portfolio and it's still pretty large. Like that's a pretty high-risk holding still.

[00:01:46]So, I might reduce even more, but uh again, I still love this company. It's not that it's the company is not great, but you know, at 120 times sales that got to you got to weigh that in as to what's the risk reward factor.

[00:02:02]Um whereas meta for for for me seems like a much better risk reward, you know, much lower risk and potential high reward if um the market continues to crush it and everything goes up. Meta should go up once it uh proves to the naysayers that hey it's it's a cash generating machine.

[00:02:22]>> So SpaceX last week released uh their financials as you know, they're about to IPO.

[00:02:30]Um and you did a great breakdown of it on X, but before I we get to that I still want to talk about Rocket Lab a little bit. My concern is it's very clear SpaceX is going to be extremely overvalued when it IPOs.

[00:02:48]And I don't know if it's going to happen in the short term, medium term, long term. Eventually SpaceX will correct to a certain extent um to be more in line with its results.

[00:03:03]I'm not saying it's going to be in line with its results, but it's going to it's eventually going it has to um as all things kind of do correct up or down. Um my concern with Rocket Lab is when SpaceX decides to correct Rocket Lab it'll bring Rocket Lab back down with it. Um >> It might, yeah. I mean first of all it's that's not a statement of fact like it doesn't have to correct, right? Like Tesla like a lot of people have been waiting you know, for years for Tesla to correct and it hasn't corrected despite the fact that Tesla's revenues are down year over year for the past couple of years and Optimus keeps getting pushed out further and further and uh robotaxis keeps getting pushed out further and further and yet Tesla is still you know, one and a half trillion dollar company. So there technically SpaceX doesn't have to correct, right? But when I saw SpaceX's filings and actually saw the revenue and the lack of revenue growth because in all of 2025 SpaceX had grown at just 33%, which is basically on par with like how fast meta is growing today, right? But making it even is that in the first quarter of this year, they only grew at 15%. So, the growth rate has even slowed down for SpaceX. So, that was a major surprise.

[00:04:31]The collected collection of all of the revenues combined was only 18 billion. I thought that they had significantly higher revenue than 18 billion.

[00:04:41]In fact, I thought just the SpaceX and the launch business and the satellite business meaning Starlink, I thought those two alone were in the 20s.

[00:04:54]You know, there was sort of like these rumors that they're in the 25 billion dollar revenue run rate, but it turns out that those two businesses combined with the SpaceX AI business, which is only 3 billion.

[00:05:08]All of it combined is only 18.

[00:05:12]And then the SpaceX AI business or that's the combination of Twitter X AI Grok, all of that combined is only a 3 billion dollar business. When Elon bought Twitter, Twitter was a 5 billion dollar business. So, in the past 3 years since he's bought that company and added the AI capabilities and Grok and the sales of these additional subscriptions, he's basically managed to reduce Twitter's revenue by 40% over that time frame period. So, by all measures when you look at the sort of like SpaceX financials, this is a massive disaster, like in my opinion, right? Like not financial advice, obviously, but this is a massive, massive disaster. Like no one thought that they were this bad.

[00:05:59]>> [laughter] >> Um now, there's one saving grace, and that is Anthropic, the company that Elon Musk has been making fun of for the past, you know, year, uh has come out come out as their saving grace and made a deal with xAI to rent their unused [laughter] data center because they don't need it.

[00:06:23]Nobody's using their product for one and a quarter billion dollars per month of revenue for SpaceX. And if you annualize that, that's like roughly 15 billion dollars annualized revenue. So, this one Anthropic deal is worth almost as much as all of SpaceX, xAI, Twitter, Grok, launch business, uh Starlink combined.

[00:06:47]This one contract, right? Uh and that is their saving grace. It's it you could have never I could have never predicted that uh that this that SpaceX would actually be saved by Anthropic, the company that uh Elon loves to call misanthropic.

[00:07:06]Um so, it's just hilarious. One caveat here is that Anthropic or SpaceX can cancel the contract with 90 days notice. So, you know, uh they might have the last laugh after all if they if they choose to >> [laughter] >> mess with Elon.

[00:07:26]>> That'd be Shakespearean.

[00:07:28]>> Uh it's it's just uh yeah.

[00:07:31]>> [laughter] >> And then and then and then you'll see the name-calling really go wild by Elon if they do that, right? I mean, I would not want to touch SpaceX with a 10-ft pole at the at this price point.

[00:07:43]It's It's just you know, mind-boggling to me.

[00:07:48]The company is doing doing great stuff, by the way. It's just and its mission I love like so much of what it's doing, but revenues, financials just don't add up.

[00:07:59]So, it's it's very frustrating to look at the numbers.