Since the S-1 filing, xAI has taken over and is likely the largest share of revenue. I would estimate that ~95%+ of xAI revenue, and 100% of its profit, is from renting their datacenters.

This is a datacenter REIT bolted onto a social media company bolted onto launch business bolted onto a niche ISP. The expected price to sales is ~100x. The best datacenter REITs trade at ~10x and pay a dividend, which SpaceX does not. Meta trades at ~7x sales. Comcast is one of the best-run ISPs, and it pays a 5.5% dividend on a stock trading at < 1x sales.

To say SpaceX is overvalued is to even beginning to convey the magnitude of the situation. It's going to be very painful when the valuation normalizes.

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rootusrootus 2 hours ago | parent | next [-]

TSLA has a forward PE of ~200x. That is probably the most logical comparison with SpaceX. Proof that the market can stay irrational for quite a long time.

It fills me with a bit of dread about the future of the market. I am 10 years out from retirement, have a bit over 1M sitting in that market, and I wonder if it will implode in the meantime. I am fairly committed to the "invest like a dead man" (i.e. index funds, no touch), but the world we live in today makes me have real doubts that the next few decades will look anything like the last few.

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davedx 20 minutes ago | parent | next [-]

Start gradually converting your equity to bonds is the standard advice on that timeframe. If you're dreading equity drawdowns, that's what fixed income is for.

	▲	solenoid0937 2 minutes ago \| parent [-]
		This is absolutely terrible advice and is out of touch with modern financial understanding. Bonds feel psychologically safer, but lead to failure more often than total market equity portfolios, even when you account for market crashes. https://youtu.be/p25PPBgMiEk

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Waterluvian 2 hours ago | parent | prev | next [-]

About 10 years out as well. I’ve concluded I just invest a very balanced set of index funds and bonds and GICs across a handful of institutions, and then invest in my home because even if the housing market collapses I get to enjoy my nice home.

Other than that I’m just not over investing for retirement and instead making sure the money is spent today on family growth and experience.

I eventually just got tired of everyone with an opinion on what doing it right looks like or how to predict the market.

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tony69 2 hours ago | parent | prev | next [-]

Plenty of hedged equity funds out there. Trade some performance for peace of mind.

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davedx 21 minutes ago | parent | prev [-]

Eh, Tesla had a relatively normal growth company valuation for a while when they were growing strongly. The problem is the stock still hasn't compressed the multiple back down as growth stagnated... because the market swapped out "valuation based growth" for "call option on robotaxi success" at the blink of an eye.

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bwfan123 3 hours ago | parent | prev | next [-]

Circular financing at its finest. And Self-dealing between the hyperscalers, openai, and anthropic.

google invests in anthropic and spacex - and shows appreciated values as earnings. Then it turns around and rents tpus to anthropic to show it as revenues. The main buyers and sellers for all of this are the hyperscalers, openai and anthropic.

It is a game of musical chairs while the party is still on.

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theturtletalks 3 hours ago | parent | prev [-]

Do companies like Uber, Tesla, etc ever intend to pay dividends? If a stock never intends to pay dividends, the value of the stock is simply the price the next shumck is willing to pay.

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missedthecue 2 hours ago | parent | next [-]

The value of the stock is your share in the underlying business. Because underlying business changes over time (hopefully for the better) you are not simply hoping another shmuck pays you more, like with tulips, whose underlying value does not change with time. You own a portion of a concern that is improving its own fortunes.

Furthermore, dividends are approved by the board once per quarter or once per year. A dividend on a stock is not a contractual guarantee like it is on a bond. Therefore, it cannot be a basis of value.

With your logic, Berkshire Hathaway is a long-running greater-fool tulip bubble whose shares are only bidded up by finding more shmucks.

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nestes 2 hours ago | parent | next [-]

Well, the value of the stock for people who essentially do not have any meaningful control of the business must essentially be tied to the expectation of some liquidity event down the line -- future cash flows. So this could come in the form of dividends, sale of the stock, bankruptcy proceedings, or a purchase of the business.

If I knew for certain (big if) that a business would never have a liquidity event and I couldn't transfer my ownership then it's dead capital for all intents and purposes and you could consider its value essentially $0, right?

	▲	kjshsh123 an hour ago \| parent [-]
		But you can transfer your ownership.

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sebastos an hour ago | parent | prev | next [-]

That’s the story, but it’s bullshit. The underlying intrinsic value of a stock can only be materialized if the company liquidates and you receive a share of the sell off of its assets. How many publicly traded companies abruptly decide they’re tired of the business, stop in their tracks, and liquidate their assets? This only really happens if the company is acquired or if it goes bankrupt. Acquisition is the closest the story comes to truth, but it’s also just forced sale to a greater shmuck. If a company goes bankrupt, a tiny fraction of the current stock price would be realized into cash for common investors because of all the privileged investors and lenders ahead of them, not to mention that the actual value of capital assets etc probably doesn’t cover all the losses (the company’s going bankrupt after all). The value of the underlying capital assets are essentially never returned to the common investors, and the idea that you own a portion of them is in practical terms a lie.

	▲	hattmall an hour ago \| parent [-]
		It's not purely the liquidation value, it's the idea that the liquidation value will continue to increase, or profits will be paid out to owners.

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ozgrakkurt an hour ago | parent | prev [-]

This makes no sense. Why doesn’t the “underlying value” of tulips change?

“Underlying value” is a meaningless word btw

	▲	bitpush an hour ago \| parent \| next [-]
		Things don't have any inherent value. It is priced at a level that a buyer thinks it is worth. A gallon of oil can be $3 or $6 depending on whether someone is willing to pay. It can also be $10 but only if people are willing to buy it at $10 if not "prices will come down to match the demand" - another way of saying it would be $9..$8...$7...$6 until it matches a buyer at which point gas is $6.
	▲	missedthecue an hour ago \| parent \| prev [-]
		The underlying value of a tulip is the same as it was in 2000 and 2026. The underlying value of Google is much different in that same time frame.

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marcosdumay 22 minutes ago | parent | prev | next [-]

US companies normally do stock buy-backs instead.

It is a way to distribute the money to the investors, that their tax system favors.

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2 hours ago | parent | prev | next [-]

[deleted]

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runako 3 hours ago | parent | prev [-]

Excellent question. They may not intend, today, to pay dividends. However, the same question could have been asked about the successful tech companies of the '00s. Companies don't like to start paying dividends until they are fairly certain of their future profit stream and therefore ability to continue paying (and increasing) the dividends in the future.

Apple, Oracle, Nvidia, Cisco, Alphabet, Meta, Salesforce, and Qualcomm all pay dividends now. It's not unreasonable to expect Uber and Tesla to pay in the future. However, the median time after IPO for similar companies to pay a dividend is close to 20 years. So we could expect Uber to perhaps wfstart paying sometime around 2039. Tesla...is Tesla so who knows?