💰 The $1.77 Trillion Question

THE MAIN EVENT
The $1.77 Trillion Question 🚀

SpaceX is about to become the cleanest test of the AI-IPO boom.

Not because it is some vaporware science project with a pitch deck and a dream. SpaceX is very real. It launches rockets at a pace no one else can touch, owns the dominant satellite internet network, and has a revenue base most IPO candidates would kill for.

So the question for investors is not “Is SpaceX impressive?” It obviously is.

The question is: At $1.77 trillion, is SpaceX still a deal, or are public investors about to become the exit liquidity?

According to the IPO details reported by Axios, SpaceX plans to sell 555.6 million shares at $135 each, list on Nasdaq under $SPCX ( ▼ 0.18% ) , and begin trading around June 12. That would make it the largest IPO ever… by a mile.

Let’s score it like investors should: bull case, bear case, and what to watch before deciding if the Elon premium is worth paying.

Bull Case: This Is Not Another Pets.com 📈

The strongest SpaceX argument starts with the moat.

In 2025, SpaceX completed 165 orbital launches, nearly one every other day, representing about 85% of all U.S. orbital launches and almost twice China’s total, according to Space.com.

That is not a normal competitive advantage. That is a tollbooth to orbit.

But the bull case is bigger than the rockets themselves:

• Starlink scale: SpaceX reported about $18.7 billion in 2025 revenue, with Starlink making up roughly 61% of sales.

• Starship optionality: If reusable heavy lift works at scale, SpaceX can unlock cheaper satellite deployment, in-space infrastructure, and markets that barely exist today.

• xAI upside: The AI segment lost heavily in 2025, but Anthropic’s compute deal could turn it from a drag into a serious revenue engine.

Much of the actual financial case comes from Starlink, which is growing fast and highly profitable: $11.4 billion of revenue, a 63% EBITDA margin, and $4.4 billion of operating profit.

In plain English, SpaceX has a high-margin internet business strapped to the world’s best launch machine. The Mars stuff gets the headlines. Starlink pays the bills.

Then there is xAI (home to Twitter and Grok), where the story gets messier and even more interesting.

In 2025, SpaceX’s AI segment generated about $3.2 billion of revenue but posted a roughly $6.4 billion operating loss. Oof.

But Anthropic’s new compute deal changes the math. At $1.25 billion per month, SpaceX could add $15 billion of annualized revenue through May 2029 from a single customer.

That is almost as much as SpaceX’s entire 2025 revenue base.

Of course, revenue is not profit. Compute comes with power costs, chip depreciation, financing costs, maintenance, and constant reinvestment. The deal also reportedly includes a 90-day termination clause, which makes it less bulletproof than a traditional long-term infrastructure contract.

Still, the upside is clear: if SpaceX can sell high-demand AI compute at attractive margins, xAI starts looking less like an anchor and more like another growth pillar.

As one bullish investor told the Financial Times, SpaceX has “the deepest moat that exists today.” Another put it more simply: “Never bet against Elon.”

Bear Case: Great Company, Absurd Price 📉

Twitter tweet

The bear case is not that SpaceX is fake. It is that the IPO price already assumes too much greatness (i.e., the “Elon Magic Multiple”).

At $1.77 trillion on $18.7 billion of revenue, SpaceX would trade around 95 times sales. That is nosebleed territory, especially for a company that lost $4.9 billion in 2025.

The bear case has teeth:

• Valuation: Roughly 95x sales for an unprofitable company.

• Concentration: Starlink is carrying the entire profit story.

• Falling ARPU: Starlink is growing users, but average revenue per user has been declining.

• AI losses: The AI segment is expensive, uncertain, and facing brutal competition.

• Governance: Musk retains heavy control through dual-class shares.

• Key-man risk: SpaceX is still very much an Elon Musk company.

Morningstar has valued SpaceX at roughly $780 billion, far below the IPO target, and called the proposed valuation significantly overvalued. New Constructs CEO David Trainer was even blunter in Fortune:

The IPO Pop As A Market Thermometer 🌡️

SpaceX will tell us something bigger than whether investors like rockets.

The first-day move will be a live read on how much heat is sitting inside the AI-private-market boom. DataTrek’s Nick Colas told Opening Bell Daily that a healthy first-day IPO pop would probably be 15% to 20%.

A 50% to 70% pop would be a different signal. That starts looking a lot like 1999, when average first-day IPO gains hit 71.2%.

The simple read:

• Up 15%-20%: Strong demand, probably rational enthusiasm.

• Up 50%-70%: Froth alert.

• Flat or down: Public investors may be rejecting private-market math.

So the pop matters, but it should not become your whole investment thesis. Most investors do not need to win the first day.

If you get IPO allocation at $135, great. If you buy after trading opens, you are buying at the market price, which could be much higher.

Three practical routes:

1. Buy SPCX directly. Simple, but risky if the first-day pop is huge.

2. Wait for index exposure. Nasdaq’s fast-entry rules could pull SpaceX into the Nasdaq-100 quickly, which matters for QQQ-style funds. S&P, however, has decided not to fast-track SpaceX into the S&P 500, so VOO/SPY holders will not get automatic exposure for at least a year.

3. Use pre-IPO or thematic funds. For indirect exposure, investors can look at XOVR, ARK Venture, and space-themed ETFs like NASA, UFO, or ARKX. However, these often come with steeper fees, lower liquidity, and the actual SpaceX weight can vary a lot from fund to fund.

The Takeaway

The investment decision comes down to a few key questions:

1. How hot is the first-day pop? A 15% to 20% move signals strong demand. A 50% to 70% rip starts looking more like mania than healthy price discovery.

2. Is Starlink growing the right way? Subscriber growth needs to more than offset falling ARPU.

3. Does Anthropic change the AI math? A $15 billion annualized revenue stream is huge, but only if it actually narrows xAI’s losses.

4. Can Starship become a commercial reality? Reusable heavy lift could unlock bigger markets, but only if SpaceX can solve the technical challenges.

5. Will index demand distort the price? Nasdaq-100 inclusion could force QQQ-style funds to buy shares, creating price-insensitive demand early on.

Remember: two things can be true at once. SpaceX is a phenomenal business and still a tricky stock at this valuation.

The bull case is about dominance, Starlink profits, and AI upside. The bear case is about paying nearly 100x sales for a company that still loses money and gives public shareholders very little control.

That does not mean investors should ignore it. It means the entry price matters.

MARKET MOOD
Bitcoin And Tech Go Their Separate Ways ↔️

Winners

Victoria’s Secret ($VSXY) - Market Cap: $5.8B (Week-to-Date: +32.9%)

Victoria's Secret had been written off as a fading mall brand. This quarter said otherwise. Earnings nearly doubled expectations on sales of $1.6B (+15%). The real win was quality of growth: more full-price selling, fewer promotions, and a 13% comparable-sales jump. That gave management the confidence to raise its full-year projection.

Hewlett Packard Enterprise ($HPE) - Market Cap: $71.1B (Week-to-Date: +24.7%)

HPE sells the servers and networking gear that data centers run on, and the AI boom is now showing up in the numbers. Revenue jumped 40% and adjusted earnings more than doubled, while total orders and backlog climbed sharply. The company raised full-year guidance, with revenue projected to grow close to 30%.

Twilio ($TWLO) - Market Cap: $35.9B (Week-to-Date: +24.1%)

Twilio is the plumbing behind the texts and calls you get from your bank, your dentist, and your delivery driver. This week’s rally had nothing to do with earnings, though. Wall Street is warming up to Twilio's voice-AI push: new tools built for AI agents, plus partnerships with voice startups Deepgram and ElevenLabs. Analysts piled in, lifting price targets toward $250 and calling the turnaround complete. The stock hit a four-year high.

Losers

Five Below ($FIVE) – Market Cap: $10.6B (Week-to-Date: -15.5%)

Here's the flip side of Victoria's Secret. Five Below crushed the quarter, with net sales up 33% and comparable sales up 23%. The stock fell anyway because the company’s outlook assumes tariff relief only lasts through July 24, then reverts to higher rates. For a retailer built around cheap imported goods, that uncertainty overshadows a lot of good news.

Cboe Global Markets ($CBOE) – Market Cap: $29.9B (Week-to-Date: -14.2%)

Cboe runs the options and derivatives markets where Wall Street places its bets, including the famous VIX "fear index." Its worst week since 2020 came courtesy of regulators, who approved Bitcoin "perpetual futures" on rivals like Kalshi and Coinbase. The worry is that a new 24/7 derivative could pull trading away from established exchanges. Cboe argues its moats, including deep liquidity and institutional clients, will hold up just fine.

Broadcom ($AVGO) – Market Cap: $1.98T (Week-to-Date: -6.2%)

Broadcom is one of the biggest winners of the entire AI boom, designing the custom chips hyperscalers use to avoid relying on Nvidia. So how does a company growing revenue 48% drop 13% in a single day? Expectations. Its AI-chip forecast of ~$16B for next quarter landed below the $17.2B Wall Street wanted.

CHART OF THE WEEK
The $1 Trillion "VOO And Chill" Era 📈

Vanguard's S&P 500 ETF just became the first fund in history to cross $1 trillion.

• Fees matter. With just a 0.03% annual fee, VOO is the cheapest way to own the S&P 500.

• The rally helped. Investors keep piling into passive funds, but the huge run since the 2022 pullback has swelled their assets too.

• Broad, but top-heavy. It’s spread across 500 companies, but the Magnificent 7 take up 35% of the index, so "diversified" comes with a tech-heavy lean.

VOO is my single biggest holding, so I'll cosign the market’s enthusiasm here: cheap, boring, and diversified-ish keeps winning.

FAST FACTS
Capital Pours Into Compute, Concrete, And Qubits 🏗️

🤝 Alphabet Sells Stock For AI: Google’s parent plans to raise $80B, including $10B from Berkshire, as AI demand outruns available compute capacity. [Read]

🏠 Homebuilders Find Deep-Pocketed Buyers: Berkshire is buying Taylor Morrison for $8.5B, while Japan’s Sumitomo is scooping up Tri Pointe for $4.5B. [Read]

⚛️ Quantum Gets Its Moment: Honeywell-backed Quantinuum priced at $60, raised $1.7B, and landed near a $16B valuation on just $31M of 2025 revenue. [Read]

💸 Your 401(k) May Get Access(ed?): The comment window closed on a Labor Dept rule to allow private equity, real estate, and crypto in retirement plans. Nearly 37,000 comments later, the industry is split. [Read]

🤖 Tesla Ditches The Safety Driver: Riders can now hail fully driverless Model Ys across Austin’s roughly 245-square-mile metro zone. [Read]

₿ Bitcoin’s Slide Gets Uglier: BTC is near $63K, roughly 50% below its October peak, while spot ETFs logged a record 13 straight days of outflows. [Read]

💼 Hiring Refuses To Crack: ADP says private employers added 122K jobs in May, with 8 of 10 sectors growing. That is the strongest month since January 2025. [Read]

WORDS TO REMEMBER
Stop Hunting For Perfect Stocks 🧠