Peter Diamandis Dismisses SpaceX Valuation Concerns — 'You're Not Buying Just The Revenue... You're Buying Humanity's Future Economy'

• Diamandis cited SpaceX’s launch monopoly, the Starlink business, and its frontier AI efforts as reasons for his bullish outlook on the company.
• He said that while everyone is fixated on SpaceX’s rocket launches, Starlink is the profit engine.
• Diamandis said that he believes the odds of Tesla folding into SpaceX are at 100%, adding that the synergies between the two companies make a potential merger logical.

Early SpaceX investor and X Prize Foundation’s Executive Chairman Peter Diamandis on Monday dismissed valuation concerns around Space Exploration Technologies Corp. (SPCX) following its blockbuster IPO last week.

During an interview with CNBC, Diamandis said that SpaceX is being priced as a normal space company when it is actually a combination of three converging businesses.

Diamandis touted SpaceX’s launch monopoly, the Starlink business, and its frontier AI efforts for his bullish outlook on the company. He said that he first invested in SpaceX in 2013.

“You’re not buying just the revenue, though I expect that to scale significantly. You’re buying humanity’s future economy, and I think that’s one of the key points folks aren’t really understanding,” he said.

His comments come amid concerns from Morningstar analysts, who noted in a note last week that the SpaceX IPO is overvalued. Short-seller Jim Chanos also echoed similar sentiments, saying that SpaceX’s valuation aim was built on “hopes and dreams.”

SpaceX shares were up more than 13% in Monday's midday trade.

Diamandis Looks Beyond Rocket Fixation, Touts Starlink Profitability

Diamandis said that while everyone is fixated on SpaceX’s rocket launches, Starlink is the profit engine. According to SpaceX’s regulatory filings, the Starlink business’s operating income in the first quarter (Q1) came in at $1.19 billion.

Diamandis said that Starlink is becoming the new communications layer and infrastructure for the entire planet.

“I think of the launch business as the moat that SpaceX has, Starlink is the cash flow engine, and the AI satellites that Elon has announced... he’s shown us 11 million square feet of production, and he just showed us the AI satellites, all of these are under one ticker, and it's three exponential curves that are all accelerating,” he said.

Diamandis also added that SpaceX is now becoming a hyperscaler, citing compute contracts signed with Alphabet Inc.’s (GOOG, GOOGL) Google and Anthropic.

Diamandis Explains Why TSLA, SPCX Merger Would Be Logical

Diamandis said that he believes the odds of Tesla Inc. (TSLA) folding into SpaceX are at 100%, adding that the synergies between the two companies make a potential merger logical.

He said that Musk never wanted to be Tesla CEO, but he built it because he thought it was important. Diamandis added that Musk’s focus was always on SpaceX.

“Bringing them together really consolidates them and enables him to really guide the combined company,” he added.

Diamandis also cited Tesla’s Gigafactory and SpaceX’s Terafab projects, saying that they borrow resources and deliver products to each other.

During an interview earlier on Monday, Wedbush’s Global Head of Tech Research, Dan Ives, echoed similar sentiments regarding the SpaceX and Tesla merger.

“I would be shocked if it doesn’t happen just given the synergies, given the cross pollination, and also for Musk himself, I think it makes the most sense to have all that AI technology under one hood, especially given the controlling nature of SpaceX,” he said.

What Retail Traders Think About SPCX Stock

Retail sentiment on Stocktwits around SpaceX trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels at the time of writing.

SPCX stock is up 17% year-to-date, while TSLA stock is down 9%. The S&P 500 ETF (SPY) is up 27% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 41%.

The iShares A.I. Innovation and Tech Active ETF (BAI) is up 93% during this period.

Also See: AMD Tops $900B Market Cap For First Time As Ryzen AI Halo Challenges Nvidia DGX Spark

For updates and corrections, email newsroom[at]stocktwits[dot]com.