SpaceX has a $2 trillion market cap, placing it among the 10 largest publicly traded companies, yet it has the lowest revenue in that group and trades at 61 times trailing sales versus 17 times for Nvidia. The author says the numbers indicate the stock is overvalued, though the company posted its first profit as a public company in Q3 with net income of $4.4 billion, and revenue rose 161% year over year to $14.6 billion. Its AI segment, now called Super Intelligence (SI), grew 830% to $7.6 billion and accounts for over half of revenue, but also took $16.4 billion of the $19.6 billion in Q3 capital expenditures. Although the valuation has fallen from nearly 100 times trailing sales before the October 20 earnings report, the author argues it still leaves little room for error, and a bear market that slows AI spending could be particularly problematic. The author takes a wait-and-see approach and suggests investors could consider starting small given the risk and volatility.
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