"SpaceX Valuation Is Crazy"

Added: 2026-06-02

[00:00:00]With the SpaceX IPO just around the corner in what will be the biggest bio market cap and capital raise in history, thought it was worthwhile listening to what some of the skeptics have to say.

[00:00:10]The same types of people, maybe not specifically the same people, but the same types of people who were reminding everybody that Tesla stock was egregiously overvalued. The valuation made no sense. But in context, by the way, Tesla stock, give or take, up roughly a thousand times since IPOing 16 years ago. Not a,000% times. you and the other tech geeks out there thinking about SpaceX shares and now thinks about going forward.

[00:00:33]>> I don't get the valuation. I mean, >> at least he's honest. There's a lot of investors who have learned the rules for investing who will look at a particular stock through their lens of the way you must value companies. And this is the kind of reaction many people have had for Tesla since 2010. The whole time I don't get it. Valuation doesn't make sense. What What the hell? They're a car company. How could this possibly make any sense? Is SpaceX stock going to be round two? This is a company that you can come back. [laughter] >> This is a company that's [clears throat] growing 30% of a $20 billion revenue base. You have Nvidia that is growing 80% of a $400 billion revenue base. Why would you buy SpaceX?

[00:01:14]>> Because it's Elon. See, these are the Oh, I don't want to be too hard on this guy. I think he's claimed that SpaceX revenue was growing 30% presumably year-over-year. Did he not read the S1?

[00:01:26]The anthropic deal alone, $1.25 billion a month. If that is sustained over a full 12 months, and the deal is up to 3 years, then that one deal alone will have doubled Space's year-over-year revenue, not including any additional Starlink revenue growth in the coming 12 months. So then, I'm not sure if this guy's a serious person. Regardless, if you dig a little bit deeper, the S1 disclosed that there were other potential negotiations for other companies to also pay SpaceX money to access AI compute. So, the real question is, does he not get the valuation or did he not actually look at the S1? The claim out of the gates on revenue growth just doesn't add up. Let's skip ahead a little bit, maybe get some more clarification on exactly what the hell he was talking about.

[00:02:09]>> An entropic as opposed to really betting on their own model. So that will generate a good $15 billion revenue run rate just by renting the GPUs.

[00:02:18]>> Wait a [ __ ] second. Is this the same is he's the literal same guy who at the beginning of this segment was claiming that SpaceX was doing 30% presumably year-over-year revenue growth. Yet he does know the details of the anthropic deal and he failed to mention that. I'm so confused right now. Maybe I'm just a dumbass. What the [ __ ] is this guy talking about?

[00:02:36]>> But would you pay up, you know, 80 time sales for that crazy?

[00:02:40]>> Again, I don't know. I you know it you know it's going to happen.

[00:02:43]>> Oh >> you know it's going to happen. And this is me in 1993 when I initiated coverage of this thing called the internet with America online. I just said I don't know what it is but just buy it.

[00:02:51]>> I'm talking relative valuation here and Nvidia had such a solid print compared to that it's like a bargain.

[00:02:58]>> Now this sounds like the analysts are saying but relative to Ford and GM this is really really expensive.

[00:03:03]>> You know what he's got a point.

[00:03:04]Absolutely cooked bro. Anyway, let's move on to the next skeptic >> and I want you to walk you through how you were thinking about coming to your valuation.

[00:03:12]>> Sure. Now, I will just say as um Meredith, I'm sure is going to say, so let me preempt her.

[00:03:18]>> Oh, no.

[00:03:19]>> We'll ignore her that SpaceX is worth whatever people are willing to pay for it. So, let's just get that aside. Um, but really what I wanted to do was to try to clear away all the murk and the and the the sort of drama and and mythos around um flying to Mars, flying to the moon, all this sort of stuff that Elon loves to talk about and just look at what actually is in SpaceX. And what it really is is a um telecom firm. It's it uh rents or sells um satellite broadband terminals to people around the world and they can they can get access to the internet from them. Uh that means it's basically like a cable operator or um so it you know that's a fairly plain vanilla um business. It's also moving into cloud computing. uh it's rented out some of its um you know some of its AI computing capacity to various companies like anthropic I guess that's the only one have a couple of thoughts it is true today that the majority of SpaceX's current revenue not including the anthropic deal so 2025 revenue the majority of that did come from Starlink which you could in theory describe as a telecommunications business home broadband and cell service however an important distinction or two this is the only provider of home broadband that has literally blanketed the entire surface of planet Earth, including, by the way, above ground. Shout out to every airline adopting Starlink right now. No other quote unquote telecommunications company, can service essentially every square inch of the planet, the jungles of Peru, mountain villages, middle of the desert, the ocean. This is a big deal. Same is true of their cell service. And this was only possible with the launch business, which no other company has. So while it is true you can look at Starlink as a telecommunications business, there's nothing else like it.

[00:05:18]As for the web services business, the Anthropic deal, a great insight. But there's more than meets the eye here. If AI companies such as Anthropic were capable of scaling up AI compute as quickly and efficiently as SpaceX, it would make no sense whatsoever for them to be throwing billions of dollars over to SpaceX to access their compute. In theory, it will be much more affordable for them to do this themselves. I mean, Anthropic recently raised [ __ ] tons, $65 billion to be exact. The reason for the anthropic deal with SpaceX is because no other company can scale compute as quickly or as affordably as SpaceX AI.

[00:05:54]So again, it's true that this is a cloud service, but given how high the stakes are with AI at the moment, companies like Anthropic, accessing more compute can immediately scale up the number of tokens available to customers and massively increase their revenue overnight. The stakes are so high, the urgency so critical that unlike many cloud data providers out there, lots of choice, if you're an AI company, bottlenecked, throttled by access to compute, losing tens of billions of dollars of annual revenue, option one is try and do it yourself, be slow and miss out on tens of billions of dollars of revenue. Option two is go to SpaceX because there are no other providers like SpaceX at comparable scale and capable of scaling as quickly as they can. So, we're noticing a theme here.

[00:06:37]Telecommunications, yes, but the only game in town. Cloud compute for AI. Yes, but the only game in town.

[00:06:44]>> Um, although it said it will, it wants to do more of that. Uh, and it's got a small advertising business in X. Um, and so then, >> fair enough relative to other businesses. Although that said, X is far more than just an advertising business.

[00:07:00]X money launching the content platform and the content platform. It's not just a way of delivering ads to consumers, although that's true, but it's also the world's biggest realtime stream of text, video, and images. Invaluable for training AI. So, once again, yes, but >> of course, it also launches um the rockets, and that is maybe one of the businesses that people are most um focused on, but it's actually one of the smaller parts of the business. So what I did was I just looked at each of these three and I looked at the closest comparison in the public market and I looked at where those companies are trading and I applied the multiples of which they are trading to the revenue figures that we >> well this will be good seeking closest comparables for businesses for which there's only one game in town >> we got from SpaceX and I tried to also calculate based on the first quarter um numbers what those businesses might do this year and I came up with a number that suggested that the most generous and I'm being very generous uh valuation for SpaceX would be around 700 and I think it was 50 no sorry it was it was around 700 >> that 700 >> honestly I was actually expecting a much lower number >> billion yeah yeah I think you got to 678 >> 678 billion the reason I I'm a bit confused as I went through various different versions and had to keep um adjusting some things.

[00:08:31]>> Okay, so 600 to 78 billion whatever 700 billion. It's not 1.7 trillion.

[00:08:38]>> Some people and you had someone on uh TIVv yesterday, Ross Gerber, who's much smarter than I am, who >> actually you know what, no comment, >> said it's worth 500. And you know, I wouldn't argue with that. Uh it really depends on how you do the calculations and how you and what you compare it to.

[00:08:57]But let's say it's worth somewhere of that order. 500.

[00:09:00]>> Oh yes. Depends on quote what you compare it to. What if and here's the big question. What if there is nothing you can compare it to? I think this might be the crux of the entire valuation discussion around SpaceX right now. There is nothing like this. And all of this incomparable only game in town, multiple different facets of the business is housed under a single roof, which is also unprecedented. Following the rules, which everybody knows if you disobey, you'll get thrown in prison.

[00:09:31]But following the rules when it comes to investing will often lead many academically bright people into making major mistakes, missing opportunities, selling too early, or even betting against particular companies, shorting stocks, and getting their financial anus ruined. If as an investor you're an obedient little convention follower, then obviously the only way you could possibly value a company would be to compare it to other companies, determine how quote unquote the market is valuing other companies. Maybe it's a multiple on their revenues. Maybe it's a multiple on earnings. Oh, it's a telecommunications company growing at XYZ. What do we typically put on that?

[00:10:10]What's the multiple use for that? Oh, okay. So, that's Starink. But if you are following the rules in attempting to value a company that itself does not follow the rules, [ __ ] you're probably going to have a tough time. We saw this with Tesla. Tesla's just a car company. Therefore, how do we value just a car company? Oh, wow. Well, Tesla's worth more than all the other just a car companies on Earth. That's crazy.

[00:10:31]Shorting the stock. Let's be real. There is nothing to compare SpaceX to. This requires some additional thinking. And since there are no pre-established rules, you do need to exercise a little bit of courage to try to understand what does the business look like in the future. What are the implications of their launch business a decade plus ahead of the rest of the world?

[00:10:50]Especially when it comes to orbital AI compute. Of course, a traditional investor following the rules would say, "Oh, business doesn't exist yet, therefore ignore." Want more content, early access, bunch of perks? Click the links in the pinned comment. AG1 has been part of my daily health protocol for almost half a decade. It's packed full of vitamins and minerals and helps me fill in nutritional gaps while supporting energy, digestion, and immune function. It also has prebiotics and probiotics to promote gut health. I take my health very seriously, and so should you. Try AG1 today by visiting drink ag.com/smr or click the link in the pin comment and enjoy a free welcome kit with vitamin D3 plus K2 and AG1 travel packs. That's drinkagg1.com/smr.