Another terrific article. I especially enjoyed the discussion of investor versus trader mindsets and your balanced treatment of both perspectives. The line about bankers paying for "reflected glory" made me smile. Regardless of where SpaceX ultimately prices, the real value here was the clarity of the framework. Thank you for continuing to teach rather than simply predict.
I really enjoyed reading this very interesting post. Thank you!
Although I doubt I’ll get a reply, I have a follow-up question. It seems you’ve structured your argument based on the fundamental premise that the AI business is profitable. (I'm just curious about the reasoning behind this conclusion[excel sheet/final valuation]!)
1) As of now, there doesn’t seem to be any basis for optimism that Grok will be able to capture a meaningful market share, and 2) given the rising costs of inference, the evidence that it can generate meaningful FCF is weak. 3) The market has always evolved efficiently, so I find it difficult to understand the 10-year optimistic view that the market will solidify based on current trends.
Could you please elaborate further on this narrative?
Thanks for the analysis. One dimension worth adding: the AI cycle is lifting all high-growth IPO multiples, and SpaceX is being priced inside that cluster. The problem is SpaceX is not an AI pure play. It is a capex-heavy industrial business with a launch monopoly and a satellite subscription model.
Thanks, Professor, and thank you for continuing to share your insights
What stood out to me from the SpaceX analysis was how important it is to look beyond reported operating margins. While the Connectivity and Space segments are loss-making today, their underlying unit economics are solid once you account for the significant R&D investment. Adjusting for that investment is a better indication of the sustainable long-term margin potential as these businesses mature and R&D intensity normalizes
Thank you, indeed it is a balanced and insightful view!
Just this week Anthropic closed its funding round at 965bn, implying Price/ARR of 21x on 47bn of current ARR. Musk offers you to buy the future xAI turnaround at 56x revenue. (reported Goldman 2026 projection for xAI + Starlink 1Q revenue + Launch 1Q revenue).
Anthropic has 47B ARR, valued at 965B (round closed just this week!) P/ARR 21x. OpenAI ARR 33B, valuation 852B, P/ARR 26x, SpaceX 31B expected 2026 revenue, valuation 1.75T, P/Revenue 56x
To be clear, I am very bullish on AI, I believe it will transform our lives and economy. I would be all in in Anthropic and OpenAI rounds – they have proven great products, market fit and show real growth.
xAI price implies a premium, however the facts show that they deserve a discount so far.
your final SpaceX valuation looks like it is based on a TSLA model and some of the fields don't look updated.
pls fix thx
all jokes aside, interesting to see yet another viewpoint. I think the long term margin growth expectations for AI biz is least likely to be realized/most risky assumption in the model.
This is exceptional and has so much context for your decision, and influences mine. I would love to see China included in the analysis since they have a clearly defined 5 year plan and subsidize their AI endeavors. How will that affect global TAM etc? Thanks for your incredible time and effort you share with all of us!
Damodaran's valuation is rigorous, but SpaceX defies traditional metrics. It is a private infrastructure monopoly that utilizes commercial platforms for military and defense purposes. When an asset blends commercial scale with critical geopolitical leverage, its true terminal value is dictated by systemic lock-in, not standard EBIT.
Damodaran's valuation is rigorous, but SpaceX defies traditional metrics. It is a private infrastructure monopoly that utilizes commercial platforms for military and defense purposes. When an asset blends commercial scale with critical geopolitical leverage, its true terminal value is dictated by systemic lock-in, not standard EBIT.
Outstanding analysis. Thanks for that education. My own gut says this is just an ISP, with a low potential space ship business, and an non-competitive AI offloaded from X. Even without the analysis, I wouldnt touch that junk with a 10ft pole.
Call me simple-minded, but the biggest risk I see in SpaceX isn't rockets, competition, or technology. It's Elon Musk himself.
SpaceX is arguably the most important private industrial company of our time, yet so much of its vision, culture, and decision-making remains concentrated in one individual with an unpredictable lifespan and an even shorter functional lifespan.
Investors generally prefer businesses that become less dependent on founders as they scale. SpaceX, despite its extraordinary achievements, still appears unusually tied to Musk's presence.
The recent Musk–Trump social media exchanges reinforce a broader concern: every human brain has finite processing capacity. There is a limit to how many companies, technologies, political battles, and public controversies one person can simultaneously carry before judgment begins to suffer.
SpaceX may well succeed beyond Musk. But from an investor's perspective, key-man risk remains one of the largest unanswered questions in the entire story.
Please be aware that we are currently facilitating a private, non-public buying window for SpaceX IPO. This allocation has not been released or disclosed to the general public; it is an exclusive, off-market opportunity being handled quietly through our private Tesla channels for a restricted group of individuals.
Because SpaceX IPO remains a private company, opportunities of this nature are highly limited, strictly confidential, and typically restricted to qualified participants.
Lofty SpaceX projections should be adjusted using last 5 years of tsla projections vs reality
I wrote on the same topic. (In continuation to my previous articles on NASA and the industry evolution). Would love to hear your thoughts. https://substack.com/@knrsquarecapital/note/c-270575624?r=n3onn&utm_medium=ios&utm_source=notes-share-action
Another terrific article. I especially enjoyed the discussion of investor versus trader mindsets and your balanced treatment of both perspectives. The line about bankers paying for "reflected glory" made me smile. Regardless of where SpaceX ultimately prices, the real value here was the clarity of the framework. Thank you for continuing to teach rather than simply predict.
Fantastic analysis. Thank you! This is probably the most important synthesis on the topic
I really enjoyed reading this very interesting post. Thank you!
Although I doubt I’ll get a reply, I have a follow-up question. It seems you’ve structured your argument based on the fundamental premise that the AI business is profitable. (I'm just curious about the reasoning behind this conclusion[excel sheet/final valuation]!)
1) As of now, there doesn’t seem to be any basis for optimism that Grok will be able to capture a meaningful market share, and 2) given the rising costs of inference, the evidence that it can generate meaningful FCF is weak. 3) The market has always evolved efficiently, so I find it difficult to understand the 10-year optimistic view that the market will solidify based on current trends.
Could you please elaborate further on this narrative?
Thanks for the analysis. One dimension worth adding: the AI cycle is lifting all high-growth IPO multiples, and SpaceX is being priced inside that cluster. The problem is SpaceX is not an AI pure play. It is a capex-heavy industrial business with a launch monopoly and a satellite subscription model.
Thanks, Professor, and thank you for continuing to share your insights
What stood out to me from the SpaceX analysis was how important it is to look beyond reported operating margins. While the Connectivity and Space segments are loss-making today, their underlying unit economics are solid once you account for the significant R&D investment. Adjusting for that investment is a better indication of the sustainable long-term margin potential as these businesses mature and R&D intensity normalizes
Very balanced view . Excellently written. Easy to read and digest ! Thank you Professor 🙏
Thank you, indeed it is a balanced and insightful view!
Just this week Anthropic closed its funding round at 965bn, implying Price/ARR of 21x on 47bn of current ARR. Musk offers you to buy the future xAI turnaround at 56x revenue. (reported Goldman 2026 projection for xAI + Starlink 1Q revenue + Launch 1Q revenue).
Anthropic has 47B ARR, valued at 965B (round closed just this week!) P/ARR 21x. OpenAI ARR 33B, valuation 852B, P/ARR 26x, SpaceX 31B expected 2026 revenue, valuation 1.75T, P/Revenue 56x
To be clear, I am very bullish on AI, I believe it will transform our lives and economy. I would be all in in Anthropic and OpenAI rounds – they have proven great products, market fit and show real growth.
xAI price implies a premium, however the facts show that they deserve a discount so far.
your final SpaceX valuation looks like it is based on a TSLA model and some of the fields don't look updated.
pls fix thx
all jokes aside, interesting to see yet another viewpoint. I think the long term margin growth expectations for AI biz is least likely to be realized/most risky assumption in the model.
Company has a value of $1.3 trillion, but raising money based on a value of $2 trillion. When did $700 billion stop being real money?
This is exceptional and has so much context for your decision, and influences mine. I would love to see China included in the analysis since they have a clearly defined 5 year plan and subsidize their AI endeavors. How will that affect global TAM etc? Thanks for your incredible time and effort you share with all of us!
Damodaran's valuation is rigorous, but SpaceX defies traditional metrics. It is a private infrastructure monopoly that utilizes commercial platforms for military and defense purposes. When an asset blends commercial scale with critical geopolitical leverage, its true terminal value is dictated by systemic lock-in, not standard EBIT.
Damodaran's valuation is rigorous, but SpaceX defies traditional metrics. It is a private infrastructure monopoly that utilizes commercial platforms for military and defense purposes. When an asset blends commercial scale with critical geopolitical leverage, its true terminal value is dictated by systemic lock-in, not standard EBIT.
Outstanding analysis. Thanks for that education. My own gut says this is just an ISP, with a low potential space ship business, and an non-competitive AI offloaded from X. Even without the analysis, I wouldnt touch that junk with a 10ft pole.
Call me simple-minded, but the biggest risk I see in SpaceX isn't rockets, competition, or technology. It's Elon Musk himself.
SpaceX is arguably the most important private industrial company of our time, yet so much of its vision, culture, and decision-making remains concentrated in one individual with an unpredictable lifespan and an even shorter functional lifespan.
Investors generally prefer businesses that become less dependent on founders as they scale. SpaceX, despite its extraordinary achievements, still appears unusually tied to Musk's presence.
The recent Musk–Trump social media exchanges reinforce a broader concern: every human brain has finite processing capacity. There is a limit to how many companies, technologies, political battles, and public controversies one person can simultaneously carry before judgment begins to suffer.
SpaceX may well succeed beyond Musk. But from an investor's perspective, key-man risk remains one of the largest unanswered questions in the entire story.
Please be aware that we are currently facilitating a private, non-public buying window for SpaceX IPO. This allocation has not been released or disclosed to the general public; it is an exclusive, off-market opportunity being handled quietly through our private Tesla channels for a restricted group of individuals.
Because SpaceX IPO remains a private company, opportunities of this nature are highly limited, strictly confidential, and typically restricted to qualified participants.