Rockets, satellites, and a very expensive question... The $1.75 trillion SpaceX debate... Explaining Starlink... Gravity always wins... On the AI front... Where to put money to work instead...
Editor's note: SpaceX's IPO is just four days away, and Elon Musk's rocket/satellite/AI company is set to go public at a $1.75 trillion valuation. Buzz on and off Wall Street keeps building, but if you've read these pages, you know we're skeptical of the excitement...
On Friday, Stansberry's Investment Advisory lead editor Whitney Tilson shared his take on why you should protect your portfolio from the SpaceX IPO (and also the upcoming OpenAI debut).
Today, we're sharing Stansberry Venture Technology editor Dave Lashmet's thoughts on SpaceX. Dave recently sat down with Director of Research Matt Weinschenk on our weekly Top Stocks show on YouTube...
In the following conversation – edited for length and clarity from that interview – Dave, who has spent years covering the space industry, and Matt get into the details of SpaceX's financials and why its business model is in some ways "mythical."
The question, Dave says, isn't whether SpaceX is an exciting company. In fact, he says Musk's rocket-launch business has done amazing things. But whether SpaceX will actually make shareholders money over the long run is another matter...
The biggest opportunity right now in space...
Matt Weinschenk: Dave, space is big and exciting, but what's the actual business opportunity here? Is it rocket launches? Is it data centers? Asteroid mining? Why does space matter so much right now?
Dave Lashmet: So, space lets you not have to put towers everywhere, if you have enough bandwidth to help everyone... I think that the biggest real-time revenue opportunity in space before 2035 is going to be communications... and communication satellites don't just have to be [about] me and you and our cellphones.
Say you wanted to fly a drone somewhere and you don't have ground control. If you want to see what the drone sees, it has to go through a satellite. The more drones, the higher the resolution, the more bandwidth you need.
There are global military implications for communications in space. Governments probably pay more per satellite and per unit of bandwidth, and they're the first customers – so they cover a lot of the developmental costs [before] these companies go commercial.
Matt: SpaceX has communications [with Starlink]. What else is part of its business? Can you break that down?
Dave: The big three are a really cool launch technology, a communications network – a railroad in space – and a massively overpriced, overhyped AI segment... which also, weirdly, includes [social media platform] X.
Getting into the details of SpaceX and its valuation...
Matt: The most profitable part of SpaceX is Starlink. Is it valuable enough to support this $1.75 trillion IPO?
Dave: I think we could easily come to a decision that the IPO price is between 6 and 10 times too much – by any metric. And the easiest metric first is [that] it's currently losing money. How much would you pay for a business that loses money? I made pizzas in college. That's the business, that's the fundamental basis for how I look at the world. For me, a stock is 1% of 100 pizza places. Whether it's one pizza place or 100 pizza places where you own a hundredth of the shares, if it's losing money, it's not a good business... And right now, SpaceX is losing money. So what is that worth? Probably not $2 trillion.
Matt: In the S-1, which is the IPO filing that companies come out with, SpaceX had a total addressable market ("TAM")... at $28 trillion. The U.S. economy is around $32 trillion...
If you look at Starlink, SpaceX is saying connectivity is a $1.6 trillion TAM. To get there, it would have to wipe out Verizon, AT&T, and T-Mobile, and then take the whole market for itself...
Dave: And it can't possibly do that. The general metric is that a satellite-communication system in space is what's available on the ground 10 years ago. You have to find out where it turns power, how well it works as a system... It has to get cheaper and lighter, and then you space-test it and build the space network. Add two and a half years to each of those four steps and you're at 10 years. It's still true. There are people talking about 5G towers in space in 2029. That's about right. We'll probably have a 5G network in space around 2031 or 2032.
Matt: So, AT&T has all this fiber laid, cables, towers. Is it cheaper to do a space network than a real ground network?
Dave: When you're in rural Oklahoma, it's cheaper to be served by a satellite than a wire that comes all the way to you. [But] when you're over the Pacific Ocean or the Atlantic Ocean, the satellite is passing over the ocean, and nobody is there. The usage rate [for the satellite network] is typically going to be about 10%, so you have 90% of cost that you don't monetize.
And then, when you're over New York City, you can't possibly serve everyone... A [satellite] cell tower serves about a thousand people. So say you have four satellites. You have capacity for roughly 4,000 people – not just Manhattan, but the whole New York metropolitan area. So that means [SpaceX] can't possibly replace Verizon and AT&T. As much as it has an advantage in rural areas, it has challenges in populated areas.
Matt: Starlink has 10 million subscribers now and about $4 billion in annual revenue... but AT&T has around $120 billion. Verizon has around $130 billion.
Dave: I think [SpaceX] might get to about 2% of the trillion-dollar market. It won't get the rest because it can't possibly serve it. It's not just New York City. When it gets over L.A., it can support 4,000 people. When it gets over Dallas, it can support 4,000 people... Its TAM is mythical.
On the AI front...
Matt: What about the AI pitch? $22 trillion of SpaceX's TAM is enterprise AI... The story is, we need data centers in space, and SpaceX is going to do it. Are we actually going to see that?
Dave: You might be able to put one up, but the problem is getting the data back off the satellite. You and I could put a bunch of chips in a shell and fire it into space. But how do we send a query up and get an answer back? That's a nightmare. Maintenance is impossible... You have to launch a solar panel and then not be able to maintain it...
And then whatever you put in low-Earth orbit is coming back down. The Earth drags it in. It has to burn fuel constantly just to stay in place... So maybe [SpaceX] has a data center in 2028, but in 2030, it has to replace it because it burned up in the upper atmosphere.
If I put a factory with Micron memory and Nvidia or Intel chips [in a ground data center], it's there in Year 4, Year 6, Year 8. It might start to get technologically obsolete, but it's still there. I can resell the chips. I can't resell the chips if they burned up in the atmosphere in year four. It's just a ridiculous idea... Everything about this is fly-by-night.
Matt: So, SpaceX pre-AI was not profitable. It had $20 billion in [capital expenditures] in 2025. $12 billion of that was for AI. Now it's on pace to spend $40 billion this year – and all of the increase is on the AI side. So as much as this is a company with profitability issues, this pivot into AI is making that worse and worse.
Dave: When Tesla came up with cars, they had different kinds of cars that had different sorts of promise... That's not true for AI for SpaceX. It's not doing the graphics cards. It's not doing the memory. It's not doing the interconnect... It's just buying. It's buying at the peak of the market. Great, how do you monetize that?
Matt: So, this thing is trading at 110 times sales. Take all its sales – about $14 billion – and at $1.75 trillion, that's 110 times sales. That is astronomical... And it only bought xAI in February, and now it's mostly an AI company. It has a deal with Anthropic to bring in about $1.2 billion a month. With that, you get down to maybe 60 times sales.
Dave: So, [what companies like Nvidia, Micron, and Advanced Micro Devices] are doing [is] selling products into a mania... What SpaceX is doing is buying into the mania.
It's paying the most that anyone's ever paid for silicon in order to get silicon now, and because it captured part of the limited production capacities of these foundries, it's saying, "We have the chips, so if you want the chips, you have to give us money." It's a weird business. If I bought all the ice cream from the ice cream truck on a hot day, then tried to resell it, it's really good for summer but not so great come winter.
Where to put money to work instead...
Matt: So with all that – the valuation, the profitability challenges – this show is called Top Stocks. Is SpaceX a top stock to you?
Dave: No, I think it's a bad business... It might be a good trade, but I would never hold it more than 21 days. As a business, it's literally a railroad. Everything you put into space is going to come back down – and fast. If you built railroads with wooden rails and you let trains roll over them, they would totally collapse in not very much time. [Elon Musk] is building a China shop and letting a bull loose, and the bull is basically gravity and air resistance... Space is hard.
I do think that launches are a great business, that connectivity is a railroad business, and that AI is an overpriced mistake... and X is whatever X has always been.
Matt: So, where should an investor who's genuinely interested in the space sector actually put their money?
Dave: I think Amazon (AMZN) is a new space player in a way that folks don't understand... Amazon is buying Globalstar (GSAT). Globalstar has satellites and spectrum, and it owns the slots in space in order to have satellites in space... and Globalstar has 250 million Apple users per year. [Close readers may recall we quoted Dave's discussion on this in our April 16 Digest.]
In every iPhone is a dedicated antenna up and a dedicated antenna down committed to Globalstar's frequencies. Now Amazon can own that. Amazon has the potential to track everyone everywhere. It already delivers everything to everyone. Because of the deal with Globalstar and Apple, it'll make a good business better.
If I had to choose, I would say Amazon. Even though I like the [launch business] from SpaceX, I don't like any of the rest of the business.
Editor's note: Dave's choice of Amazon over SpaceX right now in the "space race" is a great example of how he's telling subscribers to approach this growing trend. Amazon is a proven business getting access to new and potentially powerful growth.
SpaceX, as it goes public, is already priced for a future that may never arrive...
More broadly, Dave is focused on what he calls "everything but SpaceX" – innovative, valuable companies doing real work in space positioned to deliver long-term returns. As he also told Matt...
SpaceX is taking between [a] 6x and 10x overvaluation at launch. What we want to find is companies that have 6x to 10x growth, not that are already 6x to 10x overvalued.
If you're interested in learning more, Dave has gone much deeper on the real opportunities in space, and the type of companies positioned for this kind of growth, in a free presentation that's available right now.
Among other things, he discusses a little-known space-communications company set up to thrive no matter what happens to SpaceX. Its technology is 10 times better than SpaceX's, Dave says, but it has gotten drastically less attention...
Click here for all the details and to watch the presentation. And make sure you do it soon... The video will go offline later this week, and as you'll also hear in the presentation, this might be the last time you see Dave go public in an event like this.
New 52-Week Highs (as of 6/5/26): Alpha Architect 1-3 Month Box Fund (BOXX), Exelixis (EXEL), W.W. Grainger (GWW), Hilton Worldwide (HLT), Eli Lilly (LLY), Invesco High Yield Equity Dividend Achievers Fund (PEY), and Ryder System (R).
In today's mailbag, feedback on Whitney Tilson's Friday Digest... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"I'm 100% on board to avoid these IPOs! Looking forward to your ideas for action in avoiding the catastrophe that is developing." – Subscriber Chuck S.
"Stock Sherpas, So the fault lies with the P.T. Barnum promoter or the foolish investor gamblers who purchase a ticket? A thing is overvalued only when the market of fools refuses to pay the price. The market in the short term can be a drug induced trip to euphoria and in the long term it can be a blood-soaked financial battlefield and graveyard to one's folly. Everything is marked to market in good time." – Subscriber Benjamin B.
All the best,
Corey McLaughlin with Matt Weinschenk and Dave Lashmet
Baltimore, Maryland
June 8, 2026
