Off the top of my head, there is a very well established business involving buying expensive things and leasing them to the companies that intend to operate them so they can sell services: aircraft leasing.
AER is the biggest player and they have a P/E ratio of, drumroll please, 6. And I expect that GPUs, despite currently looking like an appreciating asset, will actually depreciate faster than aircraft in the long run.
Sidenote: 3 is actually high. 94 is absolutely ridiculous.
Do you mean low? AAPL has a ps of 10.
I would also like to point out, that on a forward P/E basis, AAPL is quite overvalued compared to historical norms, but basically every tech company is right now.
A few segments of the economy are known to have low revenue/investment ratios, and companies there get P/S up to 7 or so.
Then, very few companies have people betting on their growth so much that their P/S get as high as 15.
And then you have literally about half a dozen exceptions on the ones S&P tracks that get higher than that.
It’s almost like the future we were promised in the 1960’s would immediately materialise the moment launch costs drop. Starship will be revolutionary if it pans out the way we expect (as the shuttle would have been, had it kept the low cost promise), but that’s not enough to warrant that 94 number.
It's not clear if Musk (SpaceX/X.ai) is really pursuing AI any more - I expect he hasn't necessarily given up on it, and he hasn't said he has, but it seems he's rented out almost all of his GPUs to Anthropic and Google, so that's not going to be much of a revenue generator, at least for time being.
It was in the news not too long ago that Musk was looking to use Samsung to fabricate "AI chips", presumably either for X.ai and/or Tesla, so perhaps he's basically put X.ai on hold until he can reboot his efforts with his own chips (& perhaps a new datacenter)?
The "93% AI company" is also a huge mischaracterization since this isn't AI business - it's datacenter/GPU leasing business which their 2 customers can pull the plug on with 90 days notice.
At those scales, that’s absolutely massive, and more computing capacity than most governments have.
I understand the gist here, but come on. This is a generational company. It’s the only relevant space launch business, and has its tentacles deep in AI infrastructure as well. Maybe the AI bet is foolish — I don’t know — you should short it!
It’s possible, and common, for one large company to have multiple business lines, each worthy of a very different P/E multiplier. In principle you end up with a weighted average of some sort.
edit: Matt Levine has some great articles about this phenomenon and how some companies try to juice it.
It’s another misdirection.
All of Musks business stuff highly depends on first mover advantage.
If people now selling it as a 'generational company' than it becomes even more stupid.
He didn't invent an unkown solution he is hiding to transform something into gold, he only put a lot of money into rockets.
And the rockets right now don't even have enough payload to have unlimited potential. If Space-X knows how to build a rocket very efficient, 10 years later other companies can do that too.
Do they? Out of all of them, I think only one of them really depends on, or even benefits from, first mover advantages: Starlink.
Tesla famously gave away all their patents, and is also being overtaken by Chinese companies with cheaper batteries because batteries are the expensive bit; SpaceX rockets are theoretically well protected because national security regulations >> patent law, but even there lots of Chinese clones popping up; TBC and Neuralink and SolarCity are going nowhere fast; Grok wasn't even the first in its field; Twitter/X is not only in heavy decline but was also always trivially cloneable and the clones are now an open source ecosystem of semi-distributed alternatives; xAI has shown ability to make data centres while pissing off locals but the market for those data centres is other AI companies who also commission their own data centres but found themselves scaling much faster than xAI did.
(Starlink's first mover advantage is "this orbit already contains a satellite").
Tesla won a lot of by being the first mass produced electric car.
Yeah the fact that China overtakes Tesla is a huge problem with Tesla and forces them to spread out. From all Musks hussles, only Tesla Cars and Space-X Starlink make money.
These two business are good running businesses, given. But these are not Trillion Dollar valuation companies.
Without the hype for these two things, nothing else would be possible.
It will very likely be valued much, much higher. The SpaceX IPO is, in itself, a marvelous piece of financial engineering (requiring co-operation among multiple actors) which has been a long time in the works.
- Right out of the gate nearly all retail investment platforms have dramatically reduced requirements for purchasing an IPO, most notably Fidelity, which previously required $500,000 in your account to participate in an IPO reduced (on Friday) this amount to $2,000
- Retail investment, despite being quieter in the post-WSB era, is at all time highs.
- Reports are that the SpaceX IPO is already highly oversubscribed, meaning there are many more retail investors interested than there are shares available.
- SpaceX has a wildy low float of only ~4% which means price discovery will be much slower then normal, especially with aforementioned demand
- All of these retail platforms enforce some sort of "soft lock-in" whereby you're excluded from future IPOs if you sell your shares within 15-30 days. So if you want to get out you're not going to be able to participate in Anthropic/OpenAI IPOs in a few months.
- Coincidentally, most of the major indexes (thankfully excluding the S&P 500) have adjusted their rules to require only 15 days post-IPO before inclusion and have no profitability requirements. Many also adjusted the rules so that low float IPOs have their weight multiplied despite the low float.
- Many retirement accounts, in one way or another, are required to track these indexes and will be forced to buy these SpaceX shares at a very likely frenzied price and further drive the price up.
SpaceX will very likely open with far more retail demand than shares, the insiders (VCs, employees etc) will still be legally locked from selling, retail investors are penalized if they sell, and so the demand will be high and supply very low.
If they can keep this demand hyped for just 3 weeks, price will still be elevated when retirement accounts are forced to buy... roughly the same time retail investor start seeing the penalty for selling expiring (meaning it is not irrational at all to be in the IPO, but it is irrational to sell before being listed in an index).
Fun fact: the other fascinating thing about this IPO is the terms for insider lock-in. At first earnings (Jun 30) inside investors unlock and can therefor liquidate 20% of their shares... but if the stock performs well, they can unlock and additional 10%. There are additional rules for continued unlocking of more shares depending on performance as time goes on. So everyone on the inside has a very vested interest in a spike in stock prices: not only will their stocks be worth more, but they can realize that value faster.
I would be surprised if SpaceX price doesn't explode in the first few weeks because for everyone involved this would make sense. It's only in August that we'll start seeing the really interesting things start happening.
Not at all surprising that the US in 2026 has degenerated to the point of turning the equity market itself into a bucket shop.
e.g. with https://www.nordnet.dk/kampagner/ipo/spacex for Denmark.
The minimum is 1 share (~$135), the FAQ on "when can I sell" says "Once trading begins in SpaceX, you can sell your shares at the current market price, which can be both higher and lower than the IPO price."
