SpaceX's $1.77 trillion IPO... The casino is expanding... What to buy instead... AI spending is outweighing consumer spending... It's showing up in jobs data... The issue for the market is higher interest rates...
It's SpaceX IPO eve...
Tomorrow, shares of Elon Musk's SpaceX will begin trading publicly on the Nasdaq exchange under the ticker symbol SPCX.
Beyond these facts, the next thing that comes to mind to say is "get your popcorn ready"... as former Dallas Cowboys wide receiver Terrell Owens once famously said after signing a free-agent contract with "America's Team" in 2006.
Similarly, 20 years later, SpaceX's debut in public markets will be a show... one way or another.
The company is pricing its Class A shares at $135, implying a valuation of $1.77 trillion on the business.
As we've covered lately, it's hard to justify that number, which equals about 100 times sales. But that idea probably won't stop shares from experiencing the typical first-day IPO "pop"... and then some.
Remember the emergence of "meme stocks" in 2021? (It was right before tech stocks topped out ahead of an eventual bear market in 2022...)
The SpaceX public debut is looking like a "meme" IPO experience already. The satellite/rocket/AI company has wanted to offer more "pre-IPO" shares to retail investors than any other private business before... and has found plenty of buyers.
Brokerages have obliged, lowering typical thresholds for pre-IPO investments. Fidelity cut its minimum account requirement from as high as $500,000 to as little as $2,000... Robinhood, E-Trade, and SoFi set no minimum at all.
Meanwhile, brokers are warning clients against "flipping" pre-IPO shares quickly... They've threatened that resellers could get banned from future IPO opportunities, which may discourage early retail selling.
And in the past few days, we've learned of a wave of leveraged SpaceX ETFs that are also launching tomorrow... These are single-stock funds that rise faster than the stock's share price – and fall faster, too.
And as we've written before, many major indexes are bending rules to include SpaceX as soon as possible.
All this is fuel for speculative fervor...
Investor orders have reportedly topped $250 billion, and SpaceX was seeking to raise $75 billion.
And this is likely just the start of a run of turbocharged mega-cap IPOs... AI leaders Anthropic and unprofitable OpenAI could follow...
Our take...
As for what long-term investors should do about all this, the prudent move is to watch and take it as a sign of froth. If you want to play with a short-term trade, it's like you're going to the casino. Don't put in any more money than you're willing to lose.
We expect volatility to be high with SpaceX shares, even if they pop on their first day of trading...
As we've shared here via our colleagues lately, SpaceX's outlook fails to justify a valuation close to what it's commanding. Expect early investors to cash out as soon as they can, thanks to retail investors piling in at just the wrong time...
Musk is on track to keep more than 80% of the company's voting power through his own shares.
Many folks will be forced to buy SpaceX shares whether they want to or not. We've touched on this point before, and you can hear more about it in a new presentation our colleague Whitney Tilson has put together that will go live on Tuesday. Click here to register.
What to buy instead...
Our Director of Research Matt Weinschenk discussed this in an episode of our Top Stocks show with Stansberry Venture Technology editor Dave Lashmet. As Matt explained, he predicts SpaceX will lose 75% of its IPO value within two years.
"There's just so much risk," he explained while discussing the company's financials with Dave.
But we're not saying the businesses that SpaceX is involved in – like satellite communications, rockets, and AI – are either unexciting or worthless...
You can find value in the "Space Race," for example, as Dave explains in his new free presentation.
You'll hear about a company that Dave says has 10 times better technology than SpaceX and could reshape the future of space-based communications. And since it's not already overhyped, it could provide 1,000% gains for early investors along the way...
As Dave explains, a catalyst that virtually no one on Wall Street has spotted is coming next week, and he believes it could send a small list of stocks soaring within days. Be sure to watch Dave's presentation before it goes offline soon. Click here to learn more.
AI's increasingly real impact...
All while the AI boom has an outsized impact on investors, the trend is having a "real" economic impact more than ever before.
As our colleague Mike Barrett has explained to his Select Value Opportunities subscribers, spending linked to data-center development has overtaken consumer spending as the U.S. economy's biggest driver, according to GDP numbers. As Mike wrote last month...
We don't normally pay much attention to the Bureau of Economic Analysis' quarterly gross domestic product ("GDP") figures. But its April 30 report for the first quarter of 2026 illustrates how AI is supplanting consumer spending. Check it out...
Throughout history, consumer spending has been the primary driver of economic growth. Personal consumption expenditures (the metric for consumer spending) outpaced GDP (the value of all goods and services produced by the economy) in the first quarters of 2024 and 2025.
In the first quarter of 2026, this growth driver fell behind overall GDP due to the higher fuel costs associated with the war in Iran, which began on February 28.
We can also look at the growth in nonresidential fixed investments... Capital expenditures ("capex") for new assets – like manufacturing plants, software, and equipment – have surged from 0.22% in the first quarter of 2024, to 1.24% in the first quarter of 2025, and then 1.39% in the most recent quarter.
This activity has overtaken consumer spending as the primary driver of U.S. economic growth. And massive data-center investments by the tech companies noted [in the table below] are responsible for most of it...
The combined capital spending of these five tech giants totaled about $271 billion (on a trailing-12-months basis) in April 2025. That surged 78%, from $271 billion to $482 billion as of the latest quarter. This spending is expected to rise sharply through the end of 2026, to more than $700 billion.
Mike updated his subscribers yesterday, saying that "this trend remains firmly intact." In a June 1 report, the U.S. Census Bureau revealed that monthly data-center construction spending eclipsed $50 billion in April for the first time ever, according to Bloomberg.
That outpaced all public spending on transportation-related infrastructure like airports, marine terminals, and mass transit – also for the first time. And now the trend is showing up in jobs reports, too... like last Friday's "nonfarm payrolls" report for May.
It showed an increase of 172,000 jobs last month, blowing economists' consensus expectations of 80,000 out of the water. As Mike explained...
Nonresidential construction employment increased for the seventh consecutive month, due to the data-center spending spree we noted earlier. The manufacturing sector also added jobs for the same reason. But, again, jobs growth was broad... We saw rising payrolls across sectors – from leisure and hospitality to healthcare.
It's not all sparkling news... As we've mentioned lately, executives are now citing AI as the top reason for laying off workers, but the tech firms closest to the technology seem to be the most likely to be letting people go.
Last month, technology firms announced 38,242 job cuts, the most of any sector. But at the same time, they also announced more hires (11,250) than any other sector in May. As Mike wrote...
High inflation and rising interest rates are hampering profitability and stunting economic growth. And AI-related layoffs are also on the rise. Despite those factors, the overall U.S. employment picture keeps getting better, not worse.
This is exactly what University of Chicago economist Alex Imas suspected would happen. Imas posited that AI would increase the value of jobs where the human touch is the whole point, even as the automated economy continues to expand.
The bottom line is, the veil of invisibility is finally coming off... AI's true impact is showing up in the official government statistics that investors have long relied on.
The issue is...
We've often said that the "economy is not the stock market" and vice versa. In other words, economic data and the stock market often behave on different timelines. This is another one of those cases.
And this time, it means the strength of the AI boom could coincide with downside for stocks.
Because, as the market showed on Friday with a big down day – the benchmark S&P 500 Index was down about 2.6% and the tech-heavy Nasdaq Composite Index lost 4% – investors aren't thrilled with the idea of a stronger labor market...
That's because of what could come next, like higher interest rates.
As we've discussed for several months, bond traders have switched from expecting rate cuts this year... They're now expecting the Federal Reserve to raise rates as its next move. That's because the pace of inflation has picked up due to the war in Iran. A strengthening job market only adds to the case for the Fed to raise interest rates under new Chair Kevin Warsh.
As Mike wrote yesterday...
A booming economy, including surging employment, is likely to push already-elevated inflation even higher. Companies are competing for scarce resources and workers. And that'll force the Federal Reserve to raise interest rates rather than cut them.
And as Warren Buffett famously said, "Interest rates are to asset prices like gravity is to the apple. They power everything in the economic universe." Low interest rates mean low gravity on stock prices. Higher rates mean more gravity, pulling prices down.
So, in the ways that hundreds of billions of dollars can do, the AI spending boom might be increasingly leading to its own bust... or at least a slowdown of what has been a three-plus-year bull market. That's what happens. Booms lead to busts. Busts lead to booms.
By putting your money into SpaceX, you're more likely to catch the wrong side of that cycle.
New 52-week highs (as of 6/10/26): Coca-Cola (KO), Invesco High Yield Equity Dividend Achievers Fund (PEY), and Public Storage (PSA).
A quiet mailbag today... As always, e-mail your comments and questions to feedback@stansberryresearch.com.
All the best,
Corey McLaughlin
Baltimore, Maryland
June 11, 2026
