Editor's note: SpaceX isn't what you think it is...

Despite the name and public perception, Elon Musk's company isn't a space company. And investors who saw it for what it really is poured money into its launch.

In today's Masters Series, adapted from the June issue of True Wealth, editor Brett Eversole reveals the real reason behind SpaceX's successful IPO and why you should understand a company's core business model...

How SpaceX Pulled Off Its Successful IPO

By Brett Eversole, editor, True Wealth

On a Monday night in 2015, a crowd of engineers and flight controllers monitored their screens... watching a launch pad in Cape Canaveral, Florida.

That night, SpaceX would attempt to safely land a rocket booster after an orbital launch for the first time in history.

Up till then, every orbital launch in history had ended with the rocket boosters falling into the ocean... or burning up as soon as they reentered our atmosphere.

Rockets are expensive. They make up about half the total cost for a launch, which can reach billions of dollars. No one had figured out how to reuse one of these rocket boosters after an orbital launch.

SpaceX had tried twice before. Both times, the rocket crashed on its return. Adding to the stakes, SpaceX's competitor, Blue Origin, had recently landed a booster after a suborbital flight.

It was time for a third attempt.

As the flight controllers watched, SpaceX's Falcon 9 rocket lifted off in a cloud of fire and smoke. Then, the spacecraft's two stages separated. When the booster landed neatly at "Landing Zone 1," the room broke out in applause.

As founder and CEO Elon Musk said in a conference afterward, it was a "revolutionary moment."

To date, SpaceX has a 98% success rate for landing Falcon 9 first-stage boosters. And its ability to reuse rockets dramatically cuts costs. It's one reason the company has been able to launch more than 10,000 low-orbit satellites to create Starlink Internet.

Love him or hate him, Musk's success at SpaceX has created the most space innovation since the original space race in the 1960s. And he just pulled off another win...

After weeks of criticism, doubts, and finger wagging, the SpaceX IPO went off without a hitch. The company raised $86 billion, making it the largest IPO in history.

It was valued at a staggering $1.8 trillion. But despite the eye-popping valuation, investors ate it up. The deal was more than 4 times oversubscribed. The stock opened 11% above the IPO price and traded as much as 30% higher throughout the day.

Now, the world's preeminent space company trades publicly on the U.S. stock market under the ticker SPCX. But here's the thing...

SpaceX didn't tell investors it was a space company. It told them it was an AI company.

Remember, SpaceX merged with xAI this year. xAI was an odd combination of what used to be Twitter (renamed X) and Musk's in-house frontier AI lab. The company's chatbot, Grok, is one of the leading AI models today.

In its S-1 filing – where a company tells potential investors what it does and what it expects for its business – SpaceX didn't sell its outlook on space. It hung everything on AI.

Specifically, the company said its total addressable market ("TAM") was $28.5 trillion. That's the entire potential market it sees for its combined business lines.

Setting aside the fact that this is nearly the size of the U.S. economy... of that total, the company said the opportunity in "space-enabled solutions" was a mere $370 billion. Another $1.6 trillion is in "connectivity," which includes its Starlink business.

In other words, SpaceX says only about $2 trillion – or 7% – of its TAM relates to space.

The other $26.5 trillion is for AI. And the vast majority, $22.7 trillion, goes to enterprise applications... or AI products for businesses.

SpaceX has openly admitted that it doesn't see itself as a space company. It sees itself as an AI company. And it's targeting the enterprise market.

The company's numbers might be crazy – but it's spot on with that direction. You see, a fundamental change has begun in AI this year. And the success of this massive AI IPO tells us what it is...

"Phase 2" of the AI boom is here.

We've lived in "Phase 1" for years. That phase was all about building the infrastructure and models needed for the AI boom. Now, Phase 2 is underway... And it's all about selling.

Importantly, this shift tells us that the stock market has more room to run than most folks realize. And it strengthens the health of the overall bull run.

Good investing,

Brett Eversole

Editor's note: The recent AI market correction might have resulted in a cooldown, but the boom is not finished yet. The rally is merely shifting away from the AI build-out to the sales of AI services.

Brett believes that the companies that adapt to this change will continue to find success while the rest will fall behind – including previous winners. Hear Brett's warning and learn what Anthropic's role in the next stage of the AI revolution is here.