SpaceX is Half a Trillion Short | My Stock Plan.
Overall SentimentBullishStrength: 75%
Overall Thesis
Kevin provides a portfolio update on his SpaceX venture capital holdings, discussing recent bullish communications and institutional analyst perspectives while maintaining his long-term bullish stance.
Narratives
SPACEXSpaceX
BullishKevin describes SpaceX as well-positioned to capture high-margin 'frontier' AI compute demand from clients like Anthropic and Google, while acknowledging it will need to raise roughly $400+ billion via a mix of debt and equity over the next several years to fund its AI/compute buildout. He remains long via his venture capital fund exposure and views recent bank notes from Goldman Sachs and Deutsche Bank as broadly bullish, while flagging execution and financing risk.
Key Arguments
- Goldman and Deutsche Bank project SpaceX could triple Neocloud annual recurring revenue to ~$100B by December via Anthropic, government, and Google contracts.
- SpaceX is targeting 5-10 gigawatts of compute by 2027, which Kevin estimates could cost $400+ billion beyond current cash reserves.
- SpaceX has secured cheaper debt financing (5-year notes at 5.35%, 30-year at 6.65%) than standalone xAI or Coreweave, due to de-risking via Starlink and Starship cash flows.
- Deutsche Bank estimates SpaceX could reach ~$300 billion of debt by the end of the decade, with Kevin guessing a further ~$140 billion could come from equity issuance.
- SpaceX's high margin Starlink/Neocloud compute pricing (e.g. GPU-hour pricing well above Goldman's long-term assumptions) supports the bullish revenue case, partly reinforced by Google's large SpaceX equity stake incentivizing it not to walk away from contracts.
Hedges & Caveats
- Disclosure: Kevin has multiple seven-figure exposure to SpaceX in his venture capital fund
- Kevin acknowledges he is positively exposed and wants to be realistic about the stock
- Mentions need to evaluate long-term debt exposure the company may take on
- Notes uncertainty about final share count and dilution upon distribution
- References that most clients plan to hold shares as a long-term call option
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