Is the SpaceX valuation realistic?
“For the first time we see a company and a stock where both the bears and the bulls will turn out to be right, just over different time frames,” the guest said. Musk’s companies are always far removed from their fundamentals. Clearly we have a visionary who delivers on his plans, just not on the timelines he wants. SpaceX will most likely succeed, but not at this price.
We have seen red on the markets all week. Investors can wait for the company’s first earnings report to see whether the price has any link to fundamentals. According to the guest, it is normal for any company to want to list at a higher valuation, but SpaceX specifically has to be looked at in three segments.
In Starlink the company is the leader, with 10.3 million users. SpaceX has an accumulated loss of 660 million dollars, driven by large and well-known investments in its spacecraft, but the company keeps generating revenue. The big question is AI, where 6 billion dollars has been invested.
Investment in AI
Bandilov explained that AI is a very powerful tool that helps us in our work, but many questions around it remain open. It is important to track companies’ capex and whether it will generate a return. The situation is somewhat reminiscent of the dot-com bubble, but there are differences. Companies developing AI generate revenue, but their valuations are a cause for concern.
He added that there are market rumors of a Tesla-SpaceX merger. A fair question is whether investor interest could move from Tesla to SpaceX. Musk is a great salesman, and his fan base holds its positions to the very end. We have yet to see how existing shareholders behave and whether they will take profits.
Nothing in the market is rational, because it is driven by emotion, no matter how hard we chase fundamentals. There is strong demand in the IT sector, even though the biggest layoffs were expected there. “Economic data show that the Fed needs to focus on inflation. The market is already pricing in one or two rate hikes by the end of the year,” the guest said.
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