Loved this breakdown. The part I keep coming back to is this piecemeal TAM acting as underwritable revenue.
Just because AI creates $22.7T of economic impact does not mean SpaceX captures that as revenue. The real question is: what percentage can they realistically capture, at what margin, over what timeline, and against whom? Especially on the AI side, the durability question feels huge. How high-margin is that demand once hyperscalers expand capacity, chip supply improves, energy constraints shift, and model efficiency keeps improving? That’s where the valuation feels most aggressive
So apart from the evident opportunities and risks: if you compare this trillion Musk development into space and US government investment in the space race with what China is developing in terms of launches, project targets, obtained ‘commercial’ goals so far and grand total profits and losses per sector (putting Musk’s realities and plans and those of US Govt next to China’s, what is your judgement? Can you put this in a simplified graph? Secondly, if you compare what the market can fund of the ‘totality’ of US space plans with what China’s economy and trade surpluses can fund, which of the two has the best chances of sustained ‘success’ (define what that is, too)?
The structural tell is that three businesses with completely different risk profiles are being sold to the public as one number. Starlink generates cash while xAI burns it at $6.4 billion a year. The composite valuation forces investors to own the business they dont want to access the one they do, and that cross-subsidy structure is the oldest catalyst for an eventual breakup demand. This is GE assembled in reverse, going public as a conglomerate so the market can spend the next five years arguing about what the parts are worth separately.
Loved this breakdown. The part I keep coming back to is this piecemeal TAM acting as underwritable revenue.
Just because AI creates $22.7T of economic impact does not mean SpaceX captures that as revenue. The real question is: what percentage can they realistically capture, at what margin, over what timeline, and against whom? Especially on the AI side, the durability question feels huge. How high-margin is that demand once hyperscalers expand capacity, chip supply improves, energy constraints shift, and model efficiency keeps improving? That’s where the valuation feels most aggressive
So apart from the evident opportunities and risks: if you compare this trillion Musk development into space and US government investment in the space race with what China is developing in terms of launches, project targets, obtained ‘commercial’ goals so far and grand total profits and losses per sector (putting Musk’s realities and plans and those of US Govt next to China’s, what is your judgement? Can you put this in a simplified graph? Secondly, if you compare what the market can fund of the ‘totality’ of US space plans with what China’s economy and trade surpluses can fund, which of the two has the best chances of sustained ‘success’ (define what that is, too)?
Fantastic breakdown
Full analysis here https://coastaljournal.substack.com/p/wall-street-spacex-shows-we-have?r=18thb9&utm_medium=ios
The structural tell is that three businesses with completely different risk profiles are being sold to the public as one number. Starlink generates cash while xAI burns it at $6.4 billion a year. The composite valuation forces investors to own the business they dont want to access the one they do, and that cross-subsidy structure is the oldest catalyst for an eventual breakup demand. This is GE assembled in reverse, going public as a conglomerate so the market can spend the next five years arguing about what the parts are worth separately.
Full analysis here https://coastaljournal.substack.com/p/wall-street-spacex-shows-we-have?r=18thb9&utm_medium=ios