Time to buy SpaceX (SPCX)?
I believe SpaceX is an even better buy today. Elon Musk told us why on SpaceX’s first earnings call…
On its first earnings call, SpaceX revealed it invested $15 billion into artificial intelligence (AI) infrastructure last quarter. Through its acquisition of xAI, which makes “Grok” AI models, it’s building data centers on the ground.
Right now, AI companies are desperate for compute. Despite collectively spending more than $750 billion this year building AI data centers, Google (GOOGL)… Microsoft (MSFT)… Amazon (AMZN)… Meta Platforms (META) and others can’t keep up with AI demand.
SpaceX is charging huge premium for it data center capacity renting. It is one of the few companies in the world that can build data centers fast.
SpaceX’s AI sales have more than tripled since last year. The contracts it’s signed with Google and Anthropic are worth $26 billion a year.
Elon said SpaceX’s AI revenue will surpass every other SpaceX business next month.
$300 billion… revenue
That’s the low end of what Elon Musk says SpaceX could generate annually from AI compute by the end of 2027.
For some perspective, SpaceX generated $18.7 billion in revenue in 2025. We’re talking about a potential 16X surge in annual revenue in less than two years.
SpaceX plans to build at least 10 “gigawatts” (GW) of AI capacity over the next year.
They’re essentially building massive industrial warehouses. Musk says each GW of AI compute brings in between in $30 billion and $50 billion a year. The agreements with Google and Anthropic fall within this range.
Why paying SpaceX $30 billion+ per gigawatt.
Answer: speed.
Building a giant data center takes years. You need land… GPUs… cooling… transformers… and above all, huge amounts of electricity.
Obviously doing all these and connecting to the grid takes time…years.
SpaceX doesn’t wait in line. It powers its sites with its own gas turbines.
It built a 750,000 sq. ft. data center in Memphis with 200,000 Nvidia chips… in 122 days. From bare warehouse to the world’s most powerful supercomputer in four months. Nvidia founder Jensen Huang said the job normally takes three years.
Paying SpaceX’s premium isn’t reckless. It’s the only math that works.
SpaceX isn’t really selling compute. It’s selling time. And right now, time is the most expensive thing in AI.
If (and it’s a big if) SpaceX can pull this off, it’ll be raking in $300 billion by the end of next year. Even if it hits 50% of that target, we’re still talking about a huge jump in revenues.
At its current 80X sales, SpaceX is one of the most expensive stocks on the market. But if sales explode, the multiple can shrink very quickly.
At $300 billion in annual revenue, today’s $1.86 trillion valuation equals just over 6X sales. 6X sales for one of the most important companies in the world?
I am keen to add to my pile slowly, though I do not like Elon way of working. I still believe he might pull this off. So I will keep adding when it goes down.
