July 29, 2026 • 26 mins
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TIMESTAMPS
0:00 SpaceX Stock Crash
2:30 Bear Case Unpacked
5:28 Starship Flight Breakthrough
10:14 AI And Compute Expansion
16:33 Elon’s Unified Ecosystem
17:01 Supply Unlock Risks
18:43 Ledger Sponsor Break
19:35 Manufacturing At Scale
22:00 Long-Term Bull Thesis
25:09 Closing Thoughts
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RESOURCES
Josh: https://x.com/JoshKale
Ejaaz: https://x.com/cryptopunk7213
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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures
Josh works with Anthropic as a contractor. All views expressed are his own and do not represent Anthropic, its leadership, or its affiliates. Nothing in this episode is investment advice.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ejaaz:
Since they IPO'd six weeks ago, SpaceX stock has absolutely crated. (00:00):
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Ejaaz: It's down more than 50% from its all-time high. And as we're recording this, (00:05):
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Ejaaz: it reached a new all-time low of $107 per share. (00:09):
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Ejaaz: So the question on everyone's mind is, is SpaceX done for? Was it massively (00:12):
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Ejaaz: overpriced? Will this company make it? Well, this might be a hot take, (00:17):
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Ejaaz: but I think that the market is incredibly wrong about SpaceX. (00:21):
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Ejaaz: And I think it's an incredibly mispriced asset. (00:24):
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Ejaaz: Think about it from two simple perspectives. In order to get the best AI model (00:27):
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Ejaaz: out there, you need the most energy. Where do you get the most energy? (00:32):
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Ejaaz: From the sun. In order to do that, you need access to space, (00:34):
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Ejaaz: cheap access to space. SpaceX is the only company that has the advantage here. (00:38):
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Ejaaz: And they recently had Flight 13 for their new spaceship, which was a massive (00:42):
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Ejaaz: success. And they launched Starlink V3. It was an incredible test. (00:47):
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Ejaaz: We're gonna get into that. (00:51):
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Ejaaz: The bull case and the bear case is gonna be a sobering take on Limitless, (00:52):
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Ejaaz: which is, you know, unique for us on why SpaceX is a generational company. (00:55):
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Josh: The bull case is mostly determinant of just the baddest technology that they (01:00):
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Josh: are producing now. And I think we're going to talk about that a lot in terms (01:03):
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Josh: of actual market sentiment. (01:06):
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Josh: It's tough, right? It's like the stock IPO and it was incredible. (01:08):
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Josh: It went up to $225 per share. (01:11):
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Josh: That's over two and a quarter trillion dollar market cap, which, (01:14):
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Josh: you know, that's unreasonable. That is so much money. The multiples on the returns (01:17):
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Josh: in terms of how much revenue they're making are just astronomical. It doesn't make sense. (01:21):
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Josh: It's not just the public market that can't figure out how to price this. (01:25):
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Josh: There's a lot of values from these privately held banks that are trying to put (01:29):
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Josh: price per share estimates on it. (01:34):
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Josh: And they still can't figure it out either. I think this is the widest distribution (01:35):
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Josh: of what banks are kind of valuing the company at. We have Morningstar putting it at $63. (01:39):
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Josh: And then we have Morgan Stanley on their bull case putting it at $600. (01:43):
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Josh: And to me, that signals that this company is mostly misunderstood. (01:47):
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Josh: People don't know how to value it. They don't know how to value a company that (01:50):
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Josh: is planning to change the world today. (01:53):
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Josh: Because a lot of the value is promised in the future. So how do you trade that? (01:55):
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Josh: What multiple does that trade at? And maybe in order to better understand that, (01:58):
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Josh: we could talk about the real technology that they're building that's going to (02:01):
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Josh: get them to this spectacular market cap. Because I can be empathetic. (02:04):
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Josh: I mean, if you bought this a couple weeks ago at 225, it's been a tough ride. (02:08):
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Josh: I think we're here to provide a little bit of reassurance that like, (02:12):
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Josh: hey, short-term, unsure, but long-term, there's some really compelling cases (02:15):
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Josh: to be made for why Starship, for why SpaceX in general, there's going to be (02:18):
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Josh: a lot of star naming in this episode. (02:22):
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Josh: Is a really spectacular company. And it has monopolies across the board and (02:24):
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Josh: things that other companies just can't really compete on. (02:28):
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Ejaaz: I think it's important to lay out the bear case for SpaceX, because we've been (02:30):
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Ejaaz: incredibly bullish about Elon Musk and all of his companies on this show. (02:35):
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Ejaaz: And in fact, I think both of us bought the IPO when it did an IPO. (02:39):
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Ejaaz: So we're in it with everyone. If you're an investor that bought that IPO, we're here with you. (02:42):
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Ejaaz: We feel your pain. So let's walk through the bear case. Well, (02:46):
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Ejaaz: I'm definitely also unbothered, but we'll get to the bull case a little later. (02:50):
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Ejaaz: But let's let's look at the bad case let's see what the armchair critics are (02:53):
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Ejaaz: saying online the i told you so's okay so there's a few things happening right now number one (02:56):
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Ejaaz: the fact that SpaceX was probably massively overvalued. We know that Elon Musk, (03:01):
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Ejaaz: in order to execute on his vision of turning civilization into a Kardashev type (03:06):
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Ejaaz: one civilization, you need a lot of money to do that. (03:10):
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Ejaaz: Space travel is incredibly expensive. So he tried to raise as much money as he can. (03:13):
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Ejaaz: That's what he eventually did. The market is now showing us that it wants to (03:18):
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Ejaaz: kind of reprice it to what it's actually valued at. (03:21):
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Ejaaz: And so it IPO'd at $135. It's now sitting at an all-time low at $107. (03:24):
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Ejaaz: I think as we're looking at our screens right now, it's at like $111 at the time of recording. (03:29):
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Ejaaz: Another big critic is only 4% of the share supply was revealed or made available (03:34):
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Ejaaz: for everyone. That is out of, I think it's around 16 billion shares. (03:41):
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Ejaaz: And I think another 1 billion worth of shares gets unlocked in about a week's (03:45):
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Ejaaz: time, August 6th, I believe, which is two days after their first quarterly report. (03:52):
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Ejaaz: So there's a lot of things going on here. People are speculating, (03:57):
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Ejaaz: is the Q3 report going to be very good, or is it going to be bad? (04:00):
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Ejaaz: Well, if you look at their financial statements from 2025, it's kind of sobering. (04:05):
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Ejaaz: They took a net loss of, I think, $4.5 billion. (04:10):
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Ejaaz: The Grok models, as we know, hasn't been able to keep up with the frontier until (04:15):
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Ejaaz: recently with Grok 4.5. We have a lot of information on that going forward as part of our bull case. (04:18):
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Ejaaz: But the point is, there is a very low float. (04:22):
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Ejaaz: And if the stock price isn't able to keep up and maintain its high price on (04:25):
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Ejaaz: a small float, how do we expect it to do it on a large float? (04:31):
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Ejaaz: For the rest of the year, I think something crazy like 56% of the rest of the (04:33):
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Ejaaz: stock supply is aiming to be unlocked and you need purchases to be able to support that. (04:38):
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Ejaaz: So we understand the bear take, but there is also a lot of good things that (04:42):
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Ejaaz: are expected for this company. (04:47):
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Ejaaz: And as we said on our ball case episode around the SpaceX IPO, (04:49):
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Ejaaz: this is a long-term investment. (04:53):
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Ejaaz: If you believe that space travel, harnessing the sun's energy, (04:56):
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Ejaaz: Training AI models on infinite energy is incredibly important. (04:59):
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Ejaaz: If you believe that robotics, if you believe that Tesla and SpaceX are going (05:02):
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Ejaaz: to have a merger eventually or that they're synonymous companies run by the same CEO, (05:06):
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Ejaaz: then you believe that SpaceX is going to be a fundamental and once in a generation (05:10):
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Ejaaz: type company 10 years out from now. (05:15):
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Josh: In summary, I mean, SpaceX is trading at about 80 times sales, (05:18):
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Josh: which is incredibly high. I mean, Palantir is the next highest. (05:21):
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Josh: Everyone freaks out about that, trading at about 60 times. This is a huge multiple on the future. (05:24):
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Josh: Here's the future that they're building. And this is where I want to talk about (05:28):
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Josh: the kind of technical features of SpaceX as a company. (05:31):
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Josh: And there's four key pillars that we could talk about here. One being Starship. (05:34):
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Josh: The second being Starlink, the satellite network above our heads currently flying right now. (05:37):
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Josh: The third is the AI opportunity. And the fourth is their ability to manufacture (05:42):
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Josh: physical things better than everyone else. So maybe we should start with Starship (05:46):
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Josh: because Starship launch flight 13 just happened last week and it was glorious. (05:49):
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Josh: Starship, for those who are not aware, this is the Mars rocket. (05:55):
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Josh: This is the moon rocket. Now, it's mostly known as the lunar rocket because (05:59):
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Josh: the plan is to get a Martian base, get a mass driver, a lot of sci-fi stuff. (06:02):
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Josh: But to bring it back down to what just happened, basically, 407 foot skyscraper went into space. (06:05):
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Josh: This was their 16th attempt and it actually worked about as well as it could have been. (06:12):
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Josh: So there's a few things that they're testing for each one of these launches. (06:16):
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Josh: The first is the ability to actually get the rocket into space, (06:19):
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Josh: which clearly it did very well. (06:22):
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Josh: The second is to land both of the objects back on Earth. (06:23):
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Josh: Those went well. We'll talk about that in a second. And the third is the ability (06:28):
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Josh: to actually distribute payload into orbit. (06:31):
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Josh: And for the first time ever, that went well with real production hardware. (06:33):
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Josh: So we've seen these Starship launches before. We've got the Starship into space and it's distributed. (06:38):
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Josh: They use this thing called the Pez dispenser, which is a funny way of just kind (06:43):
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Josh: of distributing these Starlink satellites. (06:46):
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Josh: One thing noteworthy about this is for the first time ever, Starship launched (06:48):
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Josh: active Starlink version 3 satellites into space. These weren't dummy units. (06:52):
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Josh: They were actual real pieces of hardware that are now connected to the Starlink (06:55):
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Josh: network and have all of the capabilities available. (07:00):
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Josh: Of direct to sell and much more bandwidth than we're used to traditionally with (07:03):
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Josh: the Starlink terminals. (07:07):
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Josh: The other thing that it did really well and that we're watching on this launch (07:08):
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Josh: video right here is that it actually landed back on the ocean softly for the (07:12):
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Josh: first time. You'll notice that it landed so soft that the rocket actually didn't explode. (07:16):
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Josh: It was incredible and it's been floating there. I think it was floating there (07:21):
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Josh: for like over two days, almost three days, just floating around in the ocean (07:23):
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Josh: because it landed so softly it didn't blow up. (07:27):
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Josh: And then there is the booster, which we've seen them land before a few times on those arms. (07:29):
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Josh: It didn't do that this time, that wasn't in the test, but it had a pretty decent (07:34):
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Josh: landing to the point where they'll be able to test that again. (07:37):
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Josh: So this launch went about as good as it could have been. (07:39):
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Josh: You'll notice the heat shields on this video that we're seeing, that did well. (07:42):
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Josh: A big part about re-entry when you're rapidly deploying these rockets is making (07:45):
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Josh: sure that you can rapidly deploy these rockets. (07:49):
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Josh: And a big part of that is protecting your rocket ship from the re-entry burn. (07:52):
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Josh: The ship is going like at many times the speed of sound through a very dense (07:55):
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Josh: atmosphere, and it causes a lot of heat. (08:00):
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Josh: You'll notice that from flight 10 all the way on the left to flight 13 all the (08:02):
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Josh: way on the right, that heat shield is doing really well. So all the signs are (08:05):
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Josh: pointing towards rapid reusability coming up quickly, so much so that the next (08:08):
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Josh: Starship launch flight, they're going to test the landing of the actual ship. (08:12):
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Josh: So we're going to get a video, probably, of the ship actually landing back on those chopstick arms. (08:17):
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Josh: And I think that's going to be spectacular. So everything so far is working fairly well. (08:22):
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Ejaaz: My major takeaway from this is the technology is so far advanced at SpaceX for (08:27):
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Ejaaz: spaceship flight, at least, versus any other company. (08:33):
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Ejaaz: I think their nearest competitor is Jeff Bezos' Blue Origin, (08:36):
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Ejaaz: that Elon is just in a field of his own right now. But I think what a lot of (08:39):
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Ejaaz: the market and investors are thinking right now is, I don't see how this materially (08:44):
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Ejaaz: impacts my life today. So why should I care about this? (08:48):
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Ejaaz: How do I price in what these rockets are eventually going to bring to me? (08:51):
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Ejaaz: I don't have that kind of an effect on myself right now in my day-to-day life. (08:54):
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Ejaaz: And I think that's probably a fair take, but it's also, in that very same sense, a mispriced take. (08:59):
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Ejaaz: I mean, look at this thing. This thing is like larger, we're launching things (09:04):
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Ejaaz: that are larger than the Statue of Liberty, for reference here, right? (09:07):
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Ejaaz: And then we're putting like thrusters on these things, 33 Raptors, (09:10):
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Ejaaz: and we're just sending these things with massive payloads. (09:13):
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Ejaaz: I think it's like 5,000 tons into space to release these Starlink satellites. (09:15):
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Ejaaz: I think it released 20 V3 Starlink satellites, which is more broadband connectivity (09:20):
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Ejaaz: than Starlink has had in its previous generation. So it's just insane how much (09:26):
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Ejaaz: Power and innovation is in these actual things. (09:31):
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Ejaaz: That being said, it's an expensive endeavor and there is a high error rate. (09:34):
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Ejaaz: But if there's one man to pull it off, it's Elon. And he's repeatedly shown (09:39):
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Ejaaz: this with his other companies at Tesla. (09:41):
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Ejaaz: And he's done this at SpaceX for over 20 years now. So is the market mispricing (09:43):
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Ejaaz: this asset? Yes, potentially. (09:48):
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Ejaaz: But also, this is over a long time horizon type of thing. (09:50):
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Ejaaz: If you're investing in this and you're looking at this for over, (09:54):
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Ejaaz: say, a six-week period, this is probably not the right kind of asset to invest (09:56):
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Ejaaz: in. This is a long-time thing, and this is something that I personally have (10:01):
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Ejaaz: a lot of conviction on. But one thing to mention about this company is (10:04):
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Ejaaz: it's not just about SpaceX anymore. It's not just about space in any kind of material sense. (10:08):
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Ejaaz: It is about AI and a number of different other things. (10:14):
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Ejaaz: So as we know, SpaceX and XAI merged about, I think a couple of months ago, (10:17):
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Ejaaz: Pre-IPO, and they are currently in ownership of all the Grok models. (10:24):
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Ejaaz: And Grok actually came out with a new model, 4.5 recently. And while Grok 4.5 (10:29):
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Ejaaz: isn't necessarily a frontier model, it is about 80 to 90% of a frontier model, (10:34):
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Ejaaz: and it's incredibly cheap, and it's very fast to use. (10:39):
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Ejaaz: And in this current world, where a lot of enterprises are spending tens to hundreds (10:42):
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Ejaaz: of millions of dollars on AI every single year, they're looking at ways to cut (10:46):
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Ejaaz: down costs. And Grok 4.5 is a really good way to do that. (10:49):
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Ejaaz: But the second major thing is Elon has built one of the largest compute clusters (10:53):
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Ejaaz: for GPUs, better than anyone and everyone. He's aggressively expanding it. (10:57):
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Ejaaz: He announced, I think, Colossus 4 a few weeks ago. Now, the reason why this (11:01):
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Ejaaz: is important is Thank you. (11:05):
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Ejaaz: The scaling laws haven't changed. More compute equals better AI models. (11:06):
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Ejaaz: So if you are Mark Zuckerberg or if you are Elon Musk, who have the largest (11:10):
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Ejaaz: data centers right now, you have a good shot of taking on the likes of Anthropic (11:14):
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Ejaaz: and OpenAir at some point. (11:18):
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Ejaaz: And this is shown in the model release cater. So we have Grok 4.5 right now, (11:19):
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Ejaaz: but in two weeks' time, as of this recording, you're going to have Grok 4.7. (11:23):
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Ejaaz: And then two weeks after that, you're going to have Grok 5. And each of these (11:27):
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Ejaaz: models are successfully much larger than its predecessor, which means it's more (11:31):
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Ejaaz: intelligent and more effective and arguably could catch up to the very capable (11:35):
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Ejaaz: Fable and Mythos models that come from Anthropic (11:39):
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Ejaaz: And GPT 5.6 that comes from OpenAI right now. So that's another major business unit. (11:42):
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Ejaaz: Then the final thing is the fact that when you have all this compute, (11:47):
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Ejaaz: what's the best thing to do with it if you're not training your own models? (11:50):
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Ejaaz: It's selling it to other businesses. And SpaceX has indirectly become one of (11:53):
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Ejaaz: the largest neoclouds out there to the tune of, I think it's like they're selling (11:57):
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Ejaaz: $60 billion worth of compute over the next, I think, nine to 12 months. (12:02):
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Ejaaz: Anthropic is one of their largest purchases, paying them $1.25 billion per month. (12:07):
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Ejaaz: So the point is, whilst it might be losing money right now, while space travel (12:12):
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Ejaaz: might be a very expensive business, it has all these other business units which (12:16):
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Ejaaz: are looking to be incredibly profitable in the near future. And I don't think (12:20):
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Ejaaz: people are pricing that in. (12:23):
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Josh: Yeah, the iterative nature of SpaceX is, I think, something that only people (12:24):
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Josh: who observe it on a regular basis witness. (12:27):
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Josh: And from the people who aren't there on the outside it just looks like these (12:30):
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Josh: products don't really change or evolve much but when you see them on a per product basis how (12:33):
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Josh: quickly they iterate and how strongly they grow it's really amazing when you (12:37):
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Josh: think about the raptor engines the engines that power starship from version one to version three (12:41):
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Josh: the efficiency has gone two to three (12:46):
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Josh: x every single time the cost has gone absolutely ridiculous in terms of (12:48):
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Josh: the downwards direction this happens with the starlink terminal satellites like (12:52):
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Josh: you mentioned it has every one of these version 3s is equivalent to 20 times that of a version 2. (12:55):
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Josh: Same thing happened with their Starlink terminal. They're now on version five. (13:01):
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Josh: The new version is 60% more efficient. (13:04):
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Josh: And all of these increases compound in a way that adds a tremendous amount of (13:07):
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Josh: value to each one of these verticals. (13:11):
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Josh: In the case of the AI argument, the AI pillar of this company, (13:12):
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Josh: I mean, you mentioned that no one's really able to build as fast as they are (13:16):
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Josh: and iterate again, as fast as they do. (13:20):
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Josh: They built that Colossus data center in what, 160 something days, (13:23):
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Josh: which is like many many hundreds of days faster than any other company can yeah (13:26):
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Josh: by a long shot and the next one's going up even faster and the iterative nature (13:31):
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Josh: of their ability to build hard hardware products (13:35):
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Josh: is i think one of the most compelling values and it gets kind of into that fourth (13:38):
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Josh: pillar of manufacturing (13:41):
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Josh: where a company who's able to move atoms in an organized way efficiently and (13:42):
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Josh: effectively is so much more valuable than a company that isn't because we've (13:47):
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Josh: gotten good over the last 20 years at building (13:51):
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Josh: software really well and when you think about the most valuable companies in (13:53):
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Josh: the world a lot of it revolves around their ability to create software i mean (13:56):
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Josh: look at all the ai labs we talk about (13:59):
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Josh: on a daily basis not a single one of them has released any compelling pieces (14:00):
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Josh: of hardware it's all just been bits on a screen and it's really difficult to (14:04):
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Josh: manage supply chains and move these things around and that's why we see companies (14:08):
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Josh: like anthropic companies like google going to spacex and asking them like (14:11):
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Josh: hey could you give us some of that compute we don't quite know how to build (14:15):
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Josh: it as fast as you do but we'd love to use it and spacex is the company that (14:18):
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Josh: can do that and in fact if spacex was just an ai company. (14:21):
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Josh: It would be the most remarkable AI company in the world because of its ability (14:25):
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Josh: to manufacture data centers at scale and to do the things required to do so. (14:27):
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Josh: Remember the episode we filmed a few weeks ago, or even last week, (14:31):
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Josh: I think it was, where Elon personally purchased a billion dollars worth of power (14:34):
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Josh: just so he could plug in a Colossus data center and get that online faster. (14:38):
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Josh: And their ability to do that at scale is something that's really compelling (14:41):
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Josh: and highly competitive because they can build anything. (14:45):
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Josh: And when you think about what comes down the line for these companies. (14:48):
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Josh: You think about, in the case of Tesla, we have CyberCab and Optimus, (14:51):
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Josh: and there is certainly a world in which these new companies are going to merge. (14:54):
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Josh: We see a lot of the crossover happening where now cybercabs are equipped with (14:57):
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Josh: Starlink terminals and Starship is using the cold rolled stainless steel that is used in Cybertruck. (15:00):
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Josh: And all of this, this hard physical labor is really going into creating a really (15:06):
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Josh: compelling company, a really compelling manufacturing story, (15:10):
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Josh: I think more than anything else, and doing so all mostly domestically. (15:14):
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Josh: There's been this battle to move things back here to the United States and everything (15:17):
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Josh: that these companies make is right here on U.S. soil. And it's, (15:22):
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Josh: they just do an amazing job of doing it. (15:25):
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Ejaaz: I do think to a certain degree, you have to be sort of crazy or delusional to (15:27):
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Ejaaz: believe in the vision that SpaceX and any Elon Musk company is pitching out there. (15:33):
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Josh: It's crazy. It is crazy. (15:37):
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Ejaaz: It's quite out there. And like, I don't blame you for critics that I see in (15:39):
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Ejaaz: the comments for a lot of our videos where we talk about SpaceX in particular. (15:43):
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Ejaaz: They're like, you know, you know, this guy's crazy. Like, he's not gonna be able to pull this off. (15:46):
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Ejaaz: And, you know, as a normal, sensible person would agree with you. (15:50):
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Ejaaz: But one thing I will say is, if you do believe that this vision is able to be (15:53):
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Ejaaz: executed upon, whether it's Elon, but mostly his team that does (15:58):
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Ejaaz: A lot of the hard work, then you can feasibly put an investment thesis against (16:02):
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Ejaaz: not just SpaceX, but any Elon company. (16:09):
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Ejaaz: I think about it like this. If you purchase SpaceX stock, you're basically buying, (16:12):
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Ejaaz: what is it, a space launch company (16:17):
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Ejaaz: a telecom company, you are buying a GPU data center, and you're also buying a Frontier AI lab. (16:19):
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Ejaaz: All of that comes packaged in once. And if all of it has to work, (16:27):
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Ejaaz: if one thing doesn't work, then kind of like the thesis gets broken. (16:30):
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Ejaaz: But then there's also this other company called Tesla, which is now like a Frontier (16:34):
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Ejaaz: robotics company. It's not just a car company, right? (16:38):
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Ejaaz: And so what do these robots eventually need? They need some form of a brain (16:40):
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Ejaaz: to guide them, to scale them in a mass production type of way. (16:44):
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Ejaaz: Well, you have Grok models, which are trained on a ton of experimental physical data. (16:49):
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Ejaaz: And Elon Musk is working on that separately. So at some point, (16:54):
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Ejaaz: you see a lot of synonymous kind of cohesion between these two companies. (16:57):
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Ejaaz: So you have to be delusional. Now, to kind of like ground ourselves a bit, (17:02):
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Ejaaz: there is a lot of bearish events, if you want to categorize it like that, (17:05):
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Ejaaz: happening over the next six months until the end of this year. (17:10):
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Ejaaz: The main one, in my opinion, is the supply unlock. (17:13):
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Ejaaz: If you have 56% to 60% of the entire supply for shares for SpaceX getting unlocked (17:16):
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Ejaaz: by the end of the year, the big question in everyone's mind is, (17:22):
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Ejaaz: is there enough money to even support the current valuation that there is? (17:25):
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Ejaaz: Or should I just wait and see for all of these shares to become unlocked? (17:30):
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Ejaaz: Let the price find an actual, you know, (17:34):
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Ejaaz: Price that the market thinks is valuable, if that makes sense, (17:37):
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Ejaaz: and then buy later on when that price is hit. (17:41):
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Ejaaz: Now, we don't do investment advice here. We just kind of talk about what our general thesis will be. (17:44):
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Ejaaz: But let's look at some other companies that were in a similar position almost (17:48):
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Ejaaz: a decade ago. If you look at Meta, when they IPO'd, I believe, (17:52):
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Ejaaz: in 2012, their stock price went below IPO price for about a year. (17:55):
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Ejaaz: And since then, it's gone on a meteoric rise. The same thing can be said of (18:00):
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Ejaaz: Uber over a shorter timeline, privately held. So the point is companies aren't always fairly priced. (18:04):
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Ejaaz: I think Elon Musk raised a ton of money to be able to execute on this gargantuan (18:11):
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Ejaaz: vision that he has. And the market is now pricing it more fairly. (18:15):
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Ejaaz: Keep an eye on the supply unlocks. The first one is going to be August 7th, (18:19):
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Ejaaz: two days after their first ever quarterly earnings. (18:22):
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Ejaaz: I'm curious in those quarterly earnings whether they actually turned towards (18:25):
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Ejaaz: profitability in some forms of ways. I'm going to look at the individual business (18:28):
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Ejaaz: units, perhaps Grok specifically. (18:31):
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Ejaaz: And yeah, I guess we'll see where we go from there. But right now, (18:34):
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Ejaaz: I'm a long term believer in this company. I believe there's only one person (18:37):
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Ejaaz: that's able to execute and pull this off. (18:39):
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Ejaaz: And I believe Elon is that moonshot bet. (18:41):
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Josh: Agents, you know what else I'm bullish on? It's this company called Ledger. (18:43):
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Josh: And thank you to Ledger for sponsoring this part of the episode, (18:47):
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Josh: where if you are building with AI agents, you're worried about security. (18:49):
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Josh: And an agent with unchecked access is a pretty brilliant but probabilistic teammate (18:52):
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Josh: with access to important secrets. (18:56):
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Josh: So Ledger Agent Stack fixes that with four open source tools. (18:58):
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Josh: DMK Skills and CLIs for Ledger Wallet, Ledger Enterprise, and Ledger Enterprise (19:02):
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Josh: Multisig that lets your agent work with crypto while you stay in full control. (19:06):
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Josh: Tell your agent, you can rebalance my wallet, ETH to 40%, fastest swaps, (19:10):
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Josh: it does the math, drafts the swaps, and then stops. (19:14):
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Josh: The transaction lands on your Ledger signer and nothing moves until you approve it. (19:17):
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Josh: Agents propose, humans approve, Ledger's signer enforces. (19:21):
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Josh: And the coolest thing for me is this works with Cloud Code, Codex, (19:25):
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Josh: Cursor, and it's all open source, ready today on developers.ledger.com. (19:28):
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Josh: You can find a link in the description below. Thank you to Ledger for supporting our show. (19:31):
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Josh: And I want to finish the bullish case for Starship with the manufacturing story (19:35):
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Josh: again one more time, just talking about how quick they're actually going to (19:40):
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Josh: make this reality happen. Because Ejaz, you did kind of humble us a little bit. (19:43):
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Josh: This is a sci-fi future that seems impossible. This seems like something you (19:46):
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Josh: would read in a book more so than witness it with your own eyes. (19:50):
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Josh: I've seen it happen with Tesla before. I haven't driven a car in a couple of years. (19:52):
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Josh: Like the Model Y is the best-selling car in the world. They've done Mission (19:57):
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Josh: Impossible before. This is not anything new to them. (19:59):
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Josh: And I see a very clear case in which they could do it again. (20:02):
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Josh: When you look at Starship, for example, (20:05):
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Josh: Do you know how long it takes to build a Starship now? (20:07):
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Ejaaz: It's two weeks. (20:09):
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Josh: It's two weeks long to build a Starship. Wow. And they're simultaneously building (20:10):
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Josh: seven of them at once. Is that for the new one? (20:14):
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Josh: Starship number 41. Wow. Yes, this is Starship version three. (20:16):
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Ejaaz: Dude. That's so impressive. (20:19):
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Josh: Ships 41 through 48 are in simultaneous productions. They're building seven (20:20):
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Josh: of these at once. They're building one every 14 days currently. (20:24):
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Josh: And that pipeline is going to be increasing significantly. So for this year (20:27):
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Josh: in 2026, Gwynne Shotwell, the COO, the godsend of SpaceX, Basically, (20:31):
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Josh: the effective CEO of SpaceX is saying they're planning to launch one starship every single month. (20:35):
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Josh: In 2027, they're planning to launch one to 400 starships in the year. (20:41):
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Josh: So the cadence is going to increase significantly. And the way it works is it's (20:47):
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Josh: unbelievable. It's like these rolls of steel go in and then a 400 foot rocket (20:51):
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Josh: just rolls out after a couple of days. (20:55):
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Josh: And they're going to be doing this over and over. (20:57):
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Josh: And as they do, the Starlink capabilities are going to multiply 20 fold per launch. (20:59):
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Josh: And all of these things kind of compound in a way that, again, (21:03):
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Josh: it's that iterative improvement and it compounding on itself in a way that is (21:06):
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Josh: so incredibly compelling. And you could see how this is going to happen across (21:09):
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Josh: the company with data centers. (21:12):
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Josh: The first one's like 160 something days. The second one's going to take 100. (21:14):
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Josh: The third one's going to take 50. (21:17):
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Josh: They're just going to continue to iterate their way down. And before you know (21:18):
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Josh: it, they have this unbelievable ability to manufacture these very complicated things at scale. (21:20):
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Josh: So that's kind of what I'm looking for. And when I look at these, (21:25):
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Josh: it's very difficult to value something on an exponential curve because of how (21:28):
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Josh: slow that initial exponential is before it kicks up. (21:31):
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Josh: And then once it does kick up, over the matter of a couple of months, (21:34):
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Josh: it could change the entire look and feel of a business. And we saw this with (21:37):
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Josh: Tesla in 2018, where it took a very long time. Tesla, for the people who weren't (21:40):
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Josh: around, it was the most shorted stock in the market for years. (21:44):
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Josh: And it had the highest short float of any company in the world. (21:48):
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Josh: And then over one year, it went up like 10x. (21:51):
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Josh: And it very aggressively repriced because people realized, hey, (21:53):
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Josh: they actually are going to manufacture the most popular car in the world and (21:56):
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Josh: figure out the self-driving thing. (21:59):
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Josh: We're probably going to see something like that happen with SpaceX. (22:01):
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Josh: It probably takes a long time because, I mean, like you said, (22:03):
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Josh: there's a lot of bearish signals that they will have to get through first if (22:06):
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Josh: you are a short-term trader. (22:10):
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Josh: If you're someone who's interested in the share price this year or next year. (22:12):
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Josh: This might be a bumpy ride. (22:15):
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Josh: I mean, because there is a stat that I read that I was like, (22:16):
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Josh: oh, that sucks. In the case of IPOs in general, the last 15 largest US IPOs since, (22:19):
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Josh: drawing down 50% since the IPO and have averaged finishing the year down 33% where they go public. (22:28):
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Josh: So there is no precedent for strong IPOs really in this case. (22:35):
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Josh: It has the valuation problem where it's trading at 80 times trailing sales, (22:39):
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Josh: profit is non-existent, there's a long way for it to go. (22:43):
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Josh: But if you believe in this future, it is an incredibly compelling version in (22:45):
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Josh: which this company is worth more than many other of the top companies combined. (22:49):
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Josh: It just takes a long time and and it's hard and it's going to be a really difficult (22:53):
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Josh: battle, but it is possible. And if you're a long-term investor, (22:56):
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Josh: that's kind of the thing to hold on to. (22:59):
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Ejaaz: It's a big vision, but Elon has proven time and again that he is an amazing (23:01):
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Ejaaz: zero to one physical infrastructure scale. (23:06):
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Ejaaz: And that's exactly the opportunity that SpaceX presents, albeit at a very ambitious (23:08):
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Ejaaz: vision. If you think about it, I think in the optimistic timeline, (23:13):
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Ejaaz: the SpaceX shuttle business itself could pay for the entire company, right? (23:18):
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Ejaaz: If you think about its vision of putting AI satellites out there to train models (23:23):
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Ejaaz: on infinite amounts of energy from the sun, Anthropica will want that. (23:28):
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Ejaaz: OpenAI will want that. All the competitors will eventually want that. (23:31):
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Ejaaz: And there's only kind of like one highway to get there in the cheapest, (23:34):
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Ejaaz: most cost efficient way. And that would be through SpaceX. But again, (23:38):
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Ejaaz: it's a bet on whether they are able to pull it off. (23:41):
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Ejaaz: When it comes to the stock price in general, even if you are skeptical on the (23:44):
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Ejaaz: stock price, if you're a bullish person about this, there is a silver lining (23:48):
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Ejaaz: where it's like, okay, well, if the supply unlock comes on later this year, (23:52):
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Ejaaz: maybe there's a better way to get access to this. (23:56):
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Ejaaz: And maybe you just kind of like wait patiently for them to be able to pull this off. (23:58):
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Ejaaz: But one thing is for sure, Elon is kind of hell bent on making this a reality. (24:02):
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Ejaaz: And time will tell whether this is something that is going to pay off. (24:06):
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Ejaaz: Again, you need a lot of time to figure this stuff out. And AI is probably the (24:10):
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Ejaaz: most mispriced asset in general, because no one knows what any of this is going to do. (24:14):
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Ejaaz: The point of the kind of like mispriced valuation that we're seeing right now (24:21):
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Ejaaz: is there's not enough market to uphold these prices. You've got the anthropic (24:24):
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Ejaaz: OpenAI IPOs coming on later this year, so we're going to need even more money for that. (24:28):
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Ejaaz: And I think a big precursor to SpaceX going up in price in general will be, (24:33):
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Ejaaz: does AI create enough GDP value across the entire globe? (24:39):
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Ejaaz: And that is a question mark, albeit a small one, because it's impacting so many (24:44):
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Ejaaz: sectors at the same time. (24:48):
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Ejaaz: So we'll get more clarity over time. But again, once clarity is achieved, (24:49):
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Ejaaz: you're kind of like a little bit late to that eventual trade. (24:54):
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Ejaaz: So I understand the bear case. I understand the bull case, but one thing is (24:56):
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Ejaaz: going to be for sure, Josh and I are going to be up 24-7, racking our brains (25:00):
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Ejaaz: around this thing until we figure it out, and we'll be reporting on it live (25:04):
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Ejaaz: on this show every single week. (25:08):
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Ejaaz: So I think that brings us to the end of this episode. Thank you so much for (25:10):
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Ejaaz: listening. This was an incredibly exciting episode to do because, (25:14):
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Ejaaz: you know, we were kind of going against some of our bull cases that we had of (25:17):
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Ejaaz: the previous one that we had around SpaceX. (25:19):
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Ejaaz: But thank you so much for listening. If you're listening to this on YouTube (25:22):
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Ejaaz: and you aren't subscribed, what's happening? (25:24):
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Ejaaz: Please leave us a comment subscribe turn on notifications it helps us out massively (25:26):
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Ejaaz: if you're listening to us on spotify or apple music or any way that you're listening (25:30):
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Ejaaz: to us please leave us a comment or give us a rating it helps us out hugely um (25:33):
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Ejaaz: but i think that's it is anything else josh (25:37):
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Josh: Yeah no it's just it's exciting like stars this company feels very very easy (25:39):
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Josh: to understand if you if you read sci-fi books and you understand the future (25:44):
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Josh: and you're like oh man this is this is the only company in the world that kind of makes makes me feel, (25:48):
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Josh: a certain way when I go out and watch these launches. (25:52):
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Josh: And there's like no one trying to capture and build the future like they are. So it's exciting. (25:55):
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Josh: And I don't know if it's going to work. It's a really ambitious project. (26:00):
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Josh: So by betting on the company, you're kind of betting on this really uncertain future. (26:02):
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Josh: But hey, it's a lot more exciting if it does work than if it doesn't. (26:05):
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Josh: And I think that's what I'm most excited about. So yeah, like you said, (26:09):
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Josh: thank you all so much for watching. Don't forget to share it with a friend who might also enjoy. (26:11):
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Josh: And yeah, we'll see you guys in the next episode. (26:16):
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Ejaaz: It's down more than 50% from its all-time high. And as we're recording this, (00:05):
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Ejaaz: it reached a new all-time low of $107 per share. (00:09):
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Ejaaz: So the question on everyone's mind is, is SpaceX done for? Was it massively (00:12):
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Ejaaz: overpriced? Will this company make it? Well, this might be a hot take, (00:17):
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Ejaaz: but I think that the market is incredibly wrong about SpaceX. (00:21):
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Ejaaz: And I think it's an incredibly mispriced asset. (00:24):
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Ejaaz: Think about it from two simple perspectives. In order to get the best AI model (00:27):
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Ejaaz: out there, you need the most energy. Where do you get the most energy? (00:32):
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Ejaaz: From the sun. In order to do that, you need access to space, (00:34):
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Ejaaz: cheap access to space. SpaceX is the only company that has the advantage here. (00:38):
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Ejaaz: And they recently had Flight 13 for their new spaceship, which was a massive (00:42):
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Ejaaz: success. And they launched Starlink V3. It was an incredible test. (00:47):
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Ejaaz: We're gonna get into that. (00:51):
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Ejaaz: The bull case and the bear case is gonna be a sobering take on Limitless, (00:52):
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Ejaaz: which is, you know, unique for us on why SpaceX is a generational company. (00:55):
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Josh: The bull case is mostly determinant of just the baddest technology that they (01:00):
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Josh: are producing now. And I think we're going to talk about that a lot in terms (01:03):
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Josh: of actual market sentiment. (01:06):
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Josh: It's tough, right? It's like the stock IPO and it was incredible. (01:08):
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Josh: It went up to $225 per share. (01:11):
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Josh: That's over two and a quarter trillion dollar market cap, which, (01:14):
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Josh: you know, that's unreasonable. That is so much money. The multiples on the returns (01:17):
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Josh: in terms of how much revenue they're making are just astronomical. It doesn't make sense. (01:21):
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Josh: It's not just the public market that can't figure out how to price this. (01:25):
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Josh: There's a lot of values from these privately held banks that are trying to put (01:29):
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Josh: price per share estimates on it. (01:34):
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Josh: And they still can't figure it out either. I think this is the widest distribution (01:35):
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Josh: of what banks are kind of valuing the company at. We have Morningstar putting it at $63. (01:39):
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Josh: And then we have Morgan Stanley on their bull case putting it at $600. (01:43):
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Josh: And to me, that signals that this company is mostly misunderstood. (01:47):
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Josh: People don't know how to value it. They don't know how to value a company that (01:50):
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Josh: is planning to change the world today. (01:53):
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Josh: Because a lot of the value is promised in the future. So how do you trade that? (01:55):
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Josh: What multiple does that trade at? And maybe in order to better understand that, (01:58):
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Josh: we could talk about the real technology that they're building that's going to (02:01):
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Josh: get them to this spectacular market cap. Because I can be empathetic. (02:04):
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Josh: I mean, if you bought this a couple weeks ago at 225, it's been a tough ride. (02:08):
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Josh: I think we're here to provide a little bit of reassurance that like, (02:12):
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Josh: hey, short-term, unsure, but long-term, there's some really compelling cases (02:15):
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Josh: to be made for why Starship, for why SpaceX in general, there's going to be (02:18):
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Josh: a lot of star naming in this episode. (02:22):
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Josh: Is a really spectacular company. And it has monopolies across the board and (02:24):
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Josh: things that other companies just can't really compete on. (02:28):
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Ejaaz: I think it's important to lay out the bear case for SpaceX, because we've been (02:30):
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Ejaaz: incredibly bullish about Elon Musk and all of his companies on this show. (02:35):
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Ejaaz: And in fact, I think both of us bought the IPO when it did an IPO. (02:39):
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Ejaaz: So we're in it with everyone. If you're an investor that bought that IPO, we're here with you. (02:42):
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Ejaaz: We feel your pain. So let's walk through the bear case. Well, (02:46):
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Ejaaz: I'm definitely also unbothered, but we'll get to the bull case a little later. (02:50):
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Ejaaz: But let's let's look at the bad case let's see what the armchair critics are (02:53):
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Ejaaz: saying online the i told you so's okay so there's a few things happening right now number one (02:56):
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Ejaaz: the fact that SpaceX was probably massively overvalued. We know that Elon Musk, (03:01):
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Ejaaz: in order to execute on his vision of turning civilization into a Kardashev type (03:06):
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Ejaaz: one civilization, you need a lot of money to do that. (03:10):
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Ejaaz: Space travel is incredibly expensive. So he tried to raise as much money as he can. (03:13):
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Ejaaz: That's what he eventually did. The market is now showing us that it wants to (03:18):
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Ejaaz: kind of reprice it to what it's actually valued at. (03:21):
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Ejaaz: And so it IPO'd at $135. It's now sitting at an all-time low at $107. (03:24):
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Ejaaz: I think as we're looking at our screens right now, it's at like $111 at the time of recording. (03:29):
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Ejaaz: Another big critic is only 4% of the share supply was revealed or made available (03:34):
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Ejaaz: for everyone. That is out of, I think it's around 16 billion shares. (03:41):
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Ejaaz: And I think another 1 billion worth of shares gets unlocked in about a week's (03:45):
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Ejaaz: time, August 6th, I believe, which is two days after their first quarterly report. (03:52):
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Ejaaz: So there's a lot of things going on here. People are speculating, (03:57):
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Ejaaz: is the Q3 report going to be very good, or is it going to be bad? (04:00):
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Ejaaz: Well, if you look at their financial statements from 2025, it's kind of sobering. (04:05):
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Ejaaz: They took a net loss of, I think, $4.5 billion. (04:10):
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Ejaaz: The Grok models, as we know, hasn't been able to keep up with the frontier until (04:15):
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Ejaaz: recently with Grok 4.5. We have a lot of information on that going forward as part of our bull case. (04:18):
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Ejaaz: But the point is, there is a very low float. (04:22):
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Ejaaz: And if the stock price isn't able to keep up and maintain its high price on (04:25):
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Ejaaz: a small float, how do we expect it to do it on a large float? (04:31):
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Ejaaz: For the rest of the year, I think something crazy like 56% of the rest of the (04:33):
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Ejaaz: stock supply is aiming to be unlocked and you need purchases to be able to support that. (04:38):
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Ejaaz: So we understand the bear take, but there is also a lot of good things that (04:42):
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Ejaaz: are expected for this company. (04:47):
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Ejaaz: And as we said on our ball case episode around the SpaceX IPO, (04:49):
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Ejaaz: this is a long-term investment. (04:53):
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Ejaaz: If you believe that space travel, harnessing the sun's energy, (04:56):
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Ejaaz: Training AI models on infinite energy is incredibly important. (04:59):
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Ejaaz: If you believe that robotics, if you believe that Tesla and SpaceX are going (05:02):
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Ejaaz: to have a merger eventually or that they're synonymous companies run by the same CEO, (05:06):
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Ejaaz: then you believe that SpaceX is going to be a fundamental and once in a generation (05:10):
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Ejaaz: type company 10 years out from now. (05:15):
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Josh: In summary, I mean, SpaceX is trading at about 80 times sales, (05:18):
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Josh: which is incredibly high. I mean, Palantir is the next highest. (05:21):
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Josh: Everyone freaks out about that, trading at about 60 times. This is a huge multiple on the future. (05:24):
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Josh: Here's the future that they're building. And this is where I want to talk about (05:28):
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Josh: the kind of technical features of SpaceX as a company. (05:31):
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Josh: And there's four key pillars that we could talk about here. One being Starship. (05:34):
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Josh: The second being Starlink, the satellite network above our heads currently flying right now. (05:37):
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Josh: The third is the AI opportunity. And the fourth is their ability to manufacture (05:42):
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Josh: physical things better than everyone else. So maybe we should start with Starship (05:46):
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Josh: because Starship launch flight 13 just happened last week and it was glorious. (05:49):
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Josh: Starship, for those who are not aware, this is the Mars rocket. (05:55):
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Josh: This is the moon rocket. Now, it's mostly known as the lunar rocket because (05:59):
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Josh: the plan is to get a Martian base, get a mass driver, a lot of sci-fi stuff. (06:02):
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Josh: But to bring it back down to what just happened, basically, 407 foot skyscraper went into space. (06:05):
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Josh: This was their 16th attempt and it actually worked about as well as it could have been. (06:12):
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Josh: So there's a few things that they're testing for each one of these launches. (06:16):
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Josh: The first is the ability to actually get the rocket into space, (06:19):
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Josh: which clearly it did very well. (06:22):
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Josh: The second is to land both of the objects back on Earth. (06:23):
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Josh: Those went well. We'll talk about that in a second. And the third is the ability (06:28):
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Josh: to actually distribute payload into orbit. (06:31):
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Josh: And for the first time ever, that went well with real production hardware. (06:33):
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Josh: So we've seen these Starship launches before. We've got the Starship into space and it's distributed. (06:38):
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Josh: They use this thing called the Pez dispenser, which is a funny way of just kind (06:43):
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Josh: of distributing these Starlink satellites. (06:46):
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Josh: One thing noteworthy about this is for the first time ever, Starship launched (06:48):
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Josh: active Starlink version 3 satellites into space. These weren't dummy units. (06:52):
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Josh: They were actual real pieces of hardware that are now connected to the Starlink (06:55):
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Josh: network and have all of the capabilities available. (07:00):
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Josh: Of direct to sell and much more bandwidth than we're used to traditionally with (07:03):
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Josh: the Starlink terminals. (07:07):
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Josh: The other thing that it did really well and that we're watching on this launch (07:08):
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Josh: video right here is that it actually landed back on the ocean softly for the (07:12):
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Josh: first time. You'll notice that it landed so soft that the rocket actually didn't explode. (07:16):
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Josh: It was incredible and it's been floating there. I think it was floating there (07:21):
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Josh: for like over two days, almost three days, just floating around in the ocean (07:23):
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Josh: because it landed so softly it didn't blow up. (07:27):
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Josh: And then there is the booster, which we've seen them land before a few times on those arms. (07:29):
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Josh: It didn't do that this time, that wasn't in the test, but it had a pretty decent (07:34):
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Josh: landing to the point where they'll be able to test that again. (07:37):
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Josh: So this launch went about as good as it could have been. (07:39):
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Josh: You'll notice the heat shields on this video that we're seeing, that did well. (07:42):
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Josh: A big part about re-entry when you're rapidly deploying these rockets is making (07:45):
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Josh: sure that you can rapidly deploy these rockets. (07:49):
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Josh: And a big part of that is protecting your rocket ship from the re-entry burn. (07:52):
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Josh: The ship is going like at many times the speed of sound through a very dense (07:55):
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Josh: atmosphere, and it causes a lot of heat. (08:00):
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Josh: You'll notice that from flight 10 all the way on the left to flight 13 all the (08:02):
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Josh: way on the right, that heat shield is doing really well. So all the signs are (08:05):
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Josh: pointing towards rapid reusability coming up quickly, so much so that the next (08:08):
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Josh: Starship launch flight, they're going to test the landing of the actual ship. (08:12):
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Josh: So we're going to get a video, probably, of the ship actually landing back on those chopstick arms. (08:17):
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Josh: And I think that's going to be spectacular. So everything so far is working fairly well. (08:22):
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Ejaaz: My major takeaway from this is the technology is so far advanced at SpaceX for (08:27):
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Ejaaz: spaceship flight, at least, versus any other company. (08:33):
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Ejaaz: I think their nearest competitor is Jeff Bezos' Blue Origin, (08:36):
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Ejaaz: that Elon is just in a field of his own right now. But I think what a lot of (08:39):
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Ejaaz: the market and investors are thinking right now is, I don't see how this materially (08:44):
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Ejaaz: impacts my life today. So why should I care about this? (08:48):
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Ejaaz: How do I price in what these rockets are eventually going to bring to me? (08:51):
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Ejaaz: I don't have that kind of an effect on myself right now in my day-to-day life. (08:54):
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Ejaaz: And I think that's probably a fair take, but it's also, in that very same sense, a mispriced take. (08:59):
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Ejaaz: I mean, look at this thing. This thing is like larger, we're launching things (09:04):
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Ejaaz: that are larger than the Statue of Liberty, for reference here, right? (09:07):
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Ejaaz: And then we're putting like thrusters on these things, 33 Raptors, (09:10):
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Ejaaz: and we're just sending these things with massive payloads. (09:13):
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Ejaaz: I think it's like 5,000 tons into space to release these Starlink satellites. (09:15):
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Ejaaz: I think it released 20 V3 Starlink satellites, which is more broadband connectivity (09:20):
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Ejaaz: than Starlink has had in its previous generation. So it's just insane how much (09:26):
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Ejaaz: Power and innovation is in these actual things. (09:31):
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Ejaaz: That being said, it's an expensive endeavor and there is a high error rate. (09:34):
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Ejaaz: But if there's one man to pull it off, it's Elon. And he's repeatedly shown (09:39):
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Ejaaz: this with his other companies at Tesla. (09:41):
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Ejaaz: And he's done this at SpaceX for over 20 years now. So is the market mispricing (09:43):
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Ejaaz: this asset? Yes, potentially. (09:48):
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Ejaaz: But also, this is over a long time horizon type of thing. (09:50):
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Ejaaz: If you're investing in this and you're looking at this for over, (09:54):
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Ejaaz: say, a six-week period, this is probably not the right kind of asset to invest (09:56):
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Ejaaz: in. This is a long-time thing, and this is something that I personally have (10:01):
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Ejaaz: a lot of conviction on. But one thing to mention about this company is (10:04):
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Ejaaz: it's not just about SpaceX anymore. It's not just about space in any kind of material sense. (10:08):
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Ejaaz: It is about AI and a number of different other things. (10:14):
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Ejaaz: So as we know, SpaceX and XAI merged about, I think a couple of months ago, (10:17):
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Ejaaz: Pre-IPO, and they are currently in ownership of all the Grok models. (10:24):
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Ejaaz: And Grok actually came out with a new model, 4.5 recently. And while Grok 4.5 (10:29):
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Ejaaz: isn't necessarily a frontier model, it is about 80 to 90% of a frontier model, (10:34):
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Ejaaz: and it's incredibly cheap, and it's very fast to use. (10:39):
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Ejaaz: And in this current world, where a lot of enterprises are spending tens to hundreds (10:42):
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Ejaaz: of millions of dollars on AI every single year, they're looking at ways to cut (10:46):
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Ejaaz: down costs. And Grok 4.5 is a really good way to do that. (10:49):
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Ejaaz: But the second major thing is Elon has built one of the largest compute clusters (10:53):
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Ejaaz: for GPUs, better than anyone and everyone. He's aggressively expanding it. (10:57):
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Ejaaz: He announced, I think, Colossus 4 a few weeks ago. Now, the reason why this (11:01):
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Ejaaz: is important is Thank you. (11:05):
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Ejaaz: The scaling laws haven't changed. More compute equals better AI models. (11:06):
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Ejaaz: So if you are Mark Zuckerberg or if you are Elon Musk, who have the largest (11:10):
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Ejaaz: data centers right now, you have a good shot of taking on the likes of Anthropic (11:14):
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Ejaaz: and OpenAir at some point. (11:18):
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Ejaaz: And this is shown in the model release cater. So we have Grok 4.5 right now, (11:19):
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Ejaaz: but in two weeks' time, as of this recording, you're going to have Grok 4.7. (11:23):
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Ejaaz: And then two weeks after that, you're going to have Grok 5. And each of these (11:27):
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Ejaaz: models are successfully much larger than its predecessor, which means it's more (11:31):
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Ejaaz: intelligent and more effective and arguably could catch up to the very capable (11:35):
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Ejaaz: Fable and Mythos models that come from Anthropic (11:39):
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Ejaaz: And GPT 5.6 that comes from OpenAI right now. So that's another major business unit. (11:42):
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Ejaaz: Then the final thing is the fact that when you have all this compute, (11:47):
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Ejaaz: what's the best thing to do with it if you're not training your own models? (11:50):
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Ejaaz: It's selling it to other businesses. And SpaceX has indirectly become one of (11:53):
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Ejaaz: the largest neoclouds out there to the tune of, I think it's like they're selling (11:57):
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Ejaaz: $60 billion worth of compute over the next, I think, nine to 12 months. (12:02):
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Ejaaz: Anthropic is one of their largest purchases, paying them $1.25 billion per month. (12:07):
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Ejaaz: So the point is, whilst it might be losing money right now, while space travel (12:12):
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Ejaaz: might be a very expensive business, it has all these other business units which (12:16):
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Ejaaz: are looking to be incredibly profitable in the near future. And I don't think (12:20):
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Ejaaz: people are pricing that in. (12:23):
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Josh: Yeah, the iterative nature of SpaceX is, I think, something that only people (12:24):
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Josh: who observe it on a regular basis witness. (12:27):
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Josh: And from the people who aren't there on the outside it just looks like these (12:30):
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Josh: products don't really change or evolve much but when you see them on a per product basis how (12:33):
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Josh: quickly they iterate and how strongly they grow it's really amazing when you (12:37):
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Josh: think about the raptor engines the engines that power starship from version one to version three (12:41):
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Josh: the efficiency has gone two to three (12:46):
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Josh: x every single time the cost has gone absolutely ridiculous in terms of (12:48):
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Josh: the downwards direction this happens with the starlink terminal satellites like (12:52):
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Josh: you mentioned it has every one of these version 3s is equivalent to 20 times that of a version 2. (12:55):
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Josh: Same thing happened with their Starlink terminal. They're now on version five. (13:01):
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Josh: The new version is 60% more efficient. (13:04):
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Josh: And all of these increases compound in a way that adds a tremendous amount of (13:07):
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Josh: value to each one of these verticals. (13:11):
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Josh: In the case of the AI argument, the AI pillar of this company, (13:12):
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Josh: I mean, you mentioned that no one's really able to build as fast as they are (13:16):
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Josh: and iterate again, as fast as they do. (13:20):
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Josh: They built that Colossus data center in what, 160 something days, (13:23):
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Josh: which is like many many hundreds of days faster than any other company can yeah (13:26):
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Josh: by a long shot and the next one's going up even faster and the iterative nature (13:31):
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Josh: of their ability to build hard hardware products (13:35):
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Josh: is i think one of the most compelling values and it gets kind of into that fourth (13:38):
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Josh: pillar of manufacturing (13:41):
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Josh: where a company who's able to move atoms in an organized way efficiently and (13:42):
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Josh: effectively is so much more valuable than a company that isn't because we've (13:47):
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Josh: gotten good over the last 20 years at building (13:51):
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Josh: software really well and when you think about the most valuable companies in (13:53):
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Josh: the world a lot of it revolves around their ability to create software i mean (13:56):
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Josh: look at all the ai labs we talk about (13:59):
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Josh: on a daily basis not a single one of them has released any compelling pieces (14:00):
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Josh: of hardware it's all just been bits on a screen and it's really difficult to (14:04):
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Josh: manage supply chains and move these things around and that's why we see companies (14:08):
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Josh: like anthropic companies like google going to spacex and asking them like (14:11):
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Josh: hey could you give us some of that compute we don't quite know how to build (14:15):
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Josh: it as fast as you do but we'd love to use it and spacex is the company that (14:18):
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Josh: can do that and in fact if spacex was just an ai company. (14:21):
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Josh: It would be the most remarkable AI company in the world because of its ability (14:25):
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Josh: to manufacture data centers at scale and to do the things required to do so. (14:27):
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Josh: Remember the episode we filmed a few weeks ago, or even last week, (14:31):
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Josh: I think it was, where Elon personally purchased a billion dollars worth of power (14:34):
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Josh: just so he could plug in a Colossus data center and get that online faster. (14:38):
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Josh: And their ability to do that at scale is something that's really compelling (14:41):
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Josh: and highly competitive because they can build anything. (14:45):
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Josh: And when you think about what comes down the line for these companies. (14:48):
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Josh: You think about, in the case of Tesla, we have CyberCab and Optimus, (14:51):
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Josh: and there is certainly a world in which these new companies are going to merge. (14:54):
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Josh: We see a lot of the crossover happening where now cybercabs are equipped with (14:57):
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Josh: Starlink terminals and Starship is using the cold rolled stainless steel that is used in Cybertruck. (15:00):
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Josh: And all of this, this hard physical labor is really going into creating a really (15:06):
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Josh: compelling company, a really compelling manufacturing story, (15:10):
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Josh: I think more than anything else, and doing so all mostly domestically. (15:14):
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Josh: There's been this battle to move things back here to the United States and everything (15:17):
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Josh: that these companies make is right here on U.S. soil. And it's, (15:22):
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Josh: they just do an amazing job of doing it. (15:25):
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Ejaaz: I do think to a certain degree, you have to be sort of crazy or delusional to (15:27):
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Ejaaz: believe in the vision that SpaceX and any Elon Musk company is pitching out there. (15:33):
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Josh: It's crazy. It is crazy. (15:37):
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Ejaaz: It's quite out there. And like, I don't blame you for critics that I see in (15:39):
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Ejaaz: the comments for a lot of our videos where we talk about SpaceX in particular. (15:43):
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Ejaaz: They're like, you know, you know, this guy's crazy. Like, he's not gonna be able to pull this off. (15:46):
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Ejaaz: And, you know, as a normal, sensible person would agree with you. (15:50):
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Ejaaz: But one thing I will say is, if you do believe that this vision is able to be (15:53):
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Ejaaz: executed upon, whether it's Elon, but mostly his team that does (15:58):
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Ejaaz: A lot of the hard work, then you can feasibly put an investment thesis against (16:02):
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Ejaaz: not just SpaceX, but any Elon company. (16:09):
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Ejaaz: I think about it like this. If you purchase SpaceX stock, you're basically buying, (16:12):
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Ejaaz: what is it, a space launch company (16:17):
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Ejaaz: a telecom company, you are buying a GPU data center, and you're also buying a Frontier AI lab. (16:19):
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Ejaaz: All of that comes packaged in once. And if all of it has to work, (16:27):
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Ejaaz: if one thing doesn't work, then kind of like the thesis gets broken. (16:30):
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Ejaaz: But then there's also this other company called Tesla, which is now like a Frontier (16:34):
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Ejaaz: robotics company. It's not just a car company, right? (16:38):
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Ejaaz: And so what do these robots eventually need? They need some form of a brain (16:40):
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Ejaaz: to guide them, to scale them in a mass production type of way. (16:44):
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Ejaaz: Well, you have Grok models, which are trained on a ton of experimental physical data. (16:49):
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Ejaaz: And Elon Musk is working on that separately. So at some point, (16:54):
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Ejaaz: you see a lot of synonymous kind of cohesion between these two companies. (16:57):
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Ejaaz: So you have to be delusional. Now, to kind of like ground ourselves a bit, (17:02):
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Ejaaz: there is a lot of bearish events, if you want to categorize it like that, (17:05):
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Ejaaz: happening over the next six months until the end of this year. (17:10):
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Ejaaz: The main one, in my opinion, is the supply unlock. (17:13):
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Ejaaz: If you have 56% to 60% of the entire supply for shares for SpaceX getting unlocked (17:16):
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Ejaaz: by the end of the year, the big question in everyone's mind is, (17:22):
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Ejaaz: is there enough money to even support the current valuation that there is? (17:25):
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Ejaaz: Or should I just wait and see for all of these shares to become unlocked? (17:30):
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Ejaaz: Let the price find an actual, you know, (17:34):
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Ejaaz: Price that the market thinks is valuable, if that makes sense, (17:37):
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Ejaaz: and then buy later on when that price is hit. (17:41):
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Ejaaz: Now, we don't do investment advice here. We just kind of talk about what our general thesis will be. (17:44):
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Ejaaz: But let's look at some other companies that were in a similar position almost (17:48):
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Ejaaz: a decade ago. If you look at Meta, when they IPO'd, I believe, (17:52):
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Ejaaz: in 2012, their stock price went below IPO price for about a year. (17:55):
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Ejaaz: And since then, it's gone on a meteoric rise. The same thing can be said of (18:00):
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Ejaaz: Uber over a shorter timeline, privately held. So the point is companies aren't always fairly priced. (18:04):
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Ejaaz: I think Elon Musk raised a ton of money to be able to execute on this gargantuan (18:11):
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Ejaaz: vision that he has. And the market is now pricing it more fairly. (18:15):
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Ejaaz: Keep an eye on the supply unlocks. The first one is going to be August 7th, (18:19):
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Ejaaz: two days after their first ever quarterly earnings. (18:22):
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Ejaaz: I'm curious in those quarterly earnings whether they actually turned towards (18:25):
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Ejaaz: profitability in some forms of ways. I'm going to look at the individual business (18:28):
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Ejaaz: units, perhaps Grok specifically. (18:31):
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Ejaaz: And yeah, I guess we'll see where we go from there. But right now, (18:34):
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Ejaaz: I'm a long term believer in this company. I believe there's only one person (18:37):
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Ejaaz: that's able to execute and pull this off. (18:39):
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Ejaaz: And I believe Elon is that moonshot bet. (18:41):
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Josh: Agents, you know what else I'm bullish on? It's this company called Ledger. (18:43):
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Josh: And thank you to Ledger for sponsoring this part of the episode, (18:47):
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Josh: where if you are building with AI agents, you're worried about security. (18:49):
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Josh: And an agent with unchecked access is a pretty brilliant but probabilistic teammate (18:52):
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Josh: with access to important secrets. (18:56):
undefined
Josh: So Ledger Agent Stack fixes that with four open source tools. (18:58):
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Josh: DMK Skills and CLIs for Ledger Wallet, Ledger Enterprise, and Ledger Enterprise (19:02):
undefined
Josh: Multisig that lets your agent work with crypto while you stay in full control. (19:06):
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Josh: Tell your agent, you can rebalance my wallet, ETH to 40%, fastest swaps, (19:10):
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Josh: it does the math, drafts the swaps, and then stops. (19:14):
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Josh: The transaction lands on your Ledger signer and nothing moves until you approve it. (19:17):
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Josh: Agents propose, humans approve, Ledger's signer enforces. (19:21):
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Josh: And the coolest thing for me is this works with Cloud Code, Codex, (19:25):
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Josh: Cursor, and it's all open source, ready today on developers.ledger.com. (19:28):
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Josh: You can find a link in the description below. Thank you to Ledger for supporting our show. (19:31):
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Josh: And I want to finish the bullish case for Starship with the manufacturing story (19:35):
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Josh: again one more time, just talking about how quick they're actually going to (19:40):
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Josh: make this reality happen. Because Ejaz, you did kind of humble us a little bit. (19:43):
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Josh: This is a sci-fi future that seems impossible. This seems like something you (19:46):
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Josh: would read in a book more so than witness it with your own eyes. (19:50):
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Josh: I've seen it happen with Tesla before. I haven't driven a car in a couple of years. (19:52):
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Josh: Like the Model Y is the best-selling car in the world. They've done Mission (19:57):
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Josh: Impossible before. This is not anything new to them. (19:59):
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Josh: And I see a very clear case in which they could do it again. (20:02):
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Josh: When you look at Starship, for example, (20:05):
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Josh: Do you know how long it takes to build a Starship now? (20:07):
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Ejaaz: It's two weeks. (20:09):
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Josh: It's two weeks long to build a Starship. Wow. And they're simultaneously building (20:10):
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Josh: seven of them at once. Is that for the new one? (20:14):
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Josh: Starship number 41. Wow. Yes, this is Starship version three. (20:16):
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Ejaaz: Dude. That's so impressive. (20:19):
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Josh: Ships 41 through 48 are in simultaneous productions. They're building seven (20:20):
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Josh: of these at once. They're building one every 14 days currently. (20:24):
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Josh: And that pipeline is going to be increasing significantly. So for this year (20:27):
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Josh: in 2026, Gwynne Shotwell, the COO, the godsend of SpaceX, Basically, (20:31):
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Josh: the effective CEO of SpaceX is saying they're planning to launch one starship every single month. (20:35):
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Josh: In 2027, they're planning to launch one to 400 starships in the year. (20:41):
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Josh: So the cadence is going to increase significantly. And the way it works is it's (20:47):
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Josh: unbelievable. It's like these rolls of steel go in and then a 400 foot rocket (20:51):
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Josh: just rolls out after a couple of days. (20:55):
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Josh: And they're going to be doing this over and over. (20:57):
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Josh: And as they do, the Starlink capabilities are going to multiply 20 fold per launch. (20:59):
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Josh: And all of these things kind of compound in a way that, again, (21:03):
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Josh: it's that iterative improvement and it compounding on itself in a way that is (21:06):
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Josh: so incredibly compelling. And you could see how this is going to happen across (21:09):
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Josh: the company with data centers. (21:12):
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Josh: The first one's like 160 something days. The second one's going to take 100. (21:14):
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Josh: The third one's going to take 50. (21:17):
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Josh: They're just going to continue to iterate their way down. And before you know (21:18):
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Josh: it, they have this unbelievable ability to manufacture these very complicated things at scale. (21:20):
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Josh: So that's kind of what I'm looking for. And when I look at these, (21:25):
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Josh: it's very difficult to value something on an exponential curve because of how (21:28):
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Josh: slow that initial exponential is before it kicks up. (21:31):
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Josh: And then once it does kick up, over the matter of a couple of months, (21:34):
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Josh: it could change the entire look and feel of a business. And we saw this with (21:37):
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Josh: Tesla in 2018, where it took a very long time. Tesla, for the people who weren't (21:40):
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Josh: around, it was the most shorted stock in the market for years. (21:44):
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Josh: And it had the highest short float of any company in the world. (21:48):
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Josh: And then over one year, it went up like 10x. (21:51):
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Josh: And it very aggressively repriced because people realized, hey, (21:53):
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Josh: they actually are going to manufacture the most popular car in the world and (21:56):
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Josh: figure out the self-driving thing. (21:59):
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Josh: We're probably going to see something like that happen with SpaceX. (22:01):
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Josh: It probably takes a long time because, I mean, like you said, (22:03):
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Josh: there's a lot of bearish signals that they will have to get through first if (22:06):
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Josh: you are a short-term trader. (22:10):
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Josh: If you're someone who's interested in the share price this year or next year. (22:12):
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Josh: This might be a bumpy ride. (22:15):
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Josh: I mean, because there is a stat that I read that I was like, (22:16):
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Josh: oh, that sucks. In the case of IPOs in general, the last 15 largest US IPOs since, (22:19):
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Josh: drawing down 50% since the IPO and have averaged finishing the year down 33% where they go public. (22:28):
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Josh: So there is no precedent for strong IPOs really in this case. (22:35):
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Josh: It has the valuation problem where it's trading at 80 times trailing sales, (22:39):
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Josh: profit is non-existent, there's a long way for it to go. (22:43):
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Josh: But if you believe in this future, it is an incredibly compelling version in (22:45):
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Josh: which this company is worth more than many other of the top companies combined. (22:49):
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Josh: It just takes a long time and and it's hard and it's going to be a really difficult (22:53):
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Josh: battle, but it is possible. And if you're a long-term investor, (22:56):
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Josh: that's kind of the thing to hold on to. (22:59):
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Ejaaz: It's a big vision, but Elon has proven time and again that he is an amazing (23:01):
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Ejaaz: zero to one physical infrastructure scale. (23:06):
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Ejaaz: And that's exactly the opportunity that SpaceX presents, albeit at a very ambitious (23:08):
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Ejaaz: vision. If you think about it, I think in the optimistic timeline, (23:13):
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Ejaaz: the SpaceX shuttle business itself could pay for the entire company, right? (23:18):
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Ejaaz: If you think about its vision of putting AI satellites out there to train models (23:23):
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Ejaaz: on infinite amounts of energy from the sun, Anthropica will want that. (23:28):
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Ejaaz: OpenAI will want that. All the competitors will eventually want that. (23:31):
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Ejaaz: And there's only kind of like one highway to get there in the cheapest, (23:34):
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Ejaaz: most cost efficient way. And that would be through SpaceX. But again, (23:38):
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Ejaaz: it's a bet on whether they are able to pull it off. (23:41):
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Ejaaz: When it comes to the stock price in general, even if you are skeptical on the (23:44):
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Ejaaz: stock price, if you're a bullish person about this, there is a silver lining (23:48):
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Ejaaz: where it's like, okay, well, if the supply unlock comes on later this year, (23:52):
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Ejaaz: maybe there's a better way to get access to this. (23:56):
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Ejaaz: And maybe you just kind of like wait patiently for them to be able to pull this off. (23:58):
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Ejaaz: But one thing is for sure, Elon is kind of hell bent on making this a reality. (24:02):
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Ejaaz: And time will tell whether this is something that is going to pay off. (24:06):
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Ejaaz: Again, you need a lot of time to figure this stuff out. And AI is probably the (24:10):
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Ejaaz: most mispriced asset in general, because no one knows what any of this is going to do. (24:14):
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Ejaaz: The point of the kind of like mispriced valuation that we're seeing right now (24:21):
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Ejaaz: is there's not enough market to uphold these prices. You've got the anthropic (24:24):
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Ejaaz: OpenAI IPOs coming on later this year, so we're going to need even more money for that. (24:28):
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Ejaaz: And I think a big precursor to SpaceX going up in price in general will be, (24:33):
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Ejaaz: does AI create enough GDP value across the entire globe? (24:39):
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Ejaaz: And that is a question mark, albeit a small one, because it's impacting so many (24:44):
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Ejaaz: sectors at the same time. (24:48):
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Ejaaz: So we'll get more clarity over time. But again, once clarity is achieved, (24:49):
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Ejaaz: you're kind of like a little bit late to that eventual trade. (24:54):
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Ejaaz: So I understand the bear case. I understand the bull case, but one thing is (24:56):
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Ejaaz: going to be for sure, Josh and I are going to be up 24-7, racking our brains (25:00):
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Ejaaz: around this thing until we figure it out, and we'll be reporting on it live (25:04):
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Ejaaz: on this show every single week. (25:08):
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Ejaaz: So I think that brings us to the end of this episode. Thank you so much for (25:10):
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Ejaaz: listening. This was an incredibly exciting episode to do because, (25:14):
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Ejaaz: you know, we were kind of going against some of our bull cases that we had of (25:17):
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Ejaaz: the previous one that we had around SpaceX. (25:19):
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Ejaaz: But thank you so much for listening. If you're listening to this on YouTube (25:22):
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Ejaaz: and you aren't subscribed, what's happening? (25:24):
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Ejaaz: Please leave us a comment subscribe turn on notifications it helps us out massively (25:26):
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Ejaaz: if you're listening to us on spotify or apple music or any way that you're listening (25:30):
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Ejaaz: to us please leave us a comment or give us a rating it helps us out hugely um (25:33):
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Ejaaz: but i think that's it is anything else josh (25:37):
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Josh: Yeah no it's just it's exciting like stars this company feels very very easy (25:39):
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Josh: to understand if you if you read sci-fi books and you understand the future (25:44):
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Josh: and you're like oh man this is this is the only company in the world that kind of makes makes me feel, (25:48):
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Josh: a certain way when I go out and watch these launches. (25:52):
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Josh: And there's like no one trying to capture and build the future like they are. So it's exciting. (25:55):
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Josh: And I don't know if it's going to work. It's a really ambitious project. (26:00):
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Josh: So by betting on the company, you're kind of betting on this really uncertain future. (26:02):
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Josh: But hey, it's a lot more exciting if it does work than if it doesn't. (26:05):
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Josh: And I think that's what I'm most excited about. So yeah, like you said, (26:09):
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Josh: thank you all so much for watching. Don't forget to share it with a friend who might also enjoy. (26:11):
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Josh: And yeah, we'll see you guys in the next episode. (26:16):
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