Are there any reasonable analyses of the practicality of data centers in space?
I know Dwarkesh Patel was interviewing Elon and brought up the fact that power cost for data centers is only 20%. The number I could find is 7-18%? GPUs are the majority of the cost. I don't think Elon responded directly to that.
There's the argument that licensing to build these things is cheaper in space. But earth has a lot of space in the middle of nowhere that no one would object to. That seems cheaper than space.
And the heat dissipation argument against it seems like a good one but I don't know if it's actually just a small engineering problem that can be solved cheaply or more fundamental.
On the plus side, you could say there is better connectivity in orbit. But if you're running inference, you'd probably want to talk to the same server that has your context cached. As it whips around earth, your latency would vary a lot, right?
I'd love it if someone could point me to a better analysis. It's an interesting question in general. Not just because one of the highest valued companies in the world is based entirely on its feasibility.
Before the IPO there was much concern that the changes in rules to allow fast inclusion in indices like Nasdaq-100 and Russell 1000 would mean that there would be an artificially elevated price. Was that effect just over-estimated? Or should SPCX have dropped even further without that support?
Investors clearly aren't familiar with rocket launches. SpaceX scrubbed their Starship launch last evening so they could fix an engine issue. SpaceX stock immediately crashed. Even worse, Rocket Lab, an entirely unaffiliated company, had its stock plummet after the SpaceX scrub.
Not sure why investors should be familiar with rocket launches when rockets are only representative of like 5% of the market value of SpaceX (per their S-1 filing to go public, 90%+ of their value comes from xAI/Grok).
Investors are clearly not familiar with anything Musk does, because it's all wildly overvalued.
A dip because of a scrubbed launch is a blip on the radar compared to the catastrophically bad ideas Musk is promising to implement. Data centers in space? That's just lunacy. A ridiculous idea from a ridiculous man.
I wonder if some of that can be attributed to automated trading systems that interpreted the news related to SpaceX and performed sentiment analysis and then traded based on that.
SpaceX stock has been tanking since its IPO, I don't think last night's scrubbed launch is the culprit.
Might have something to do with Musk making outlandish promises (AI datacenters in space) and the fact that most of the company's value is tied up in xAI, the shittiest AI provider.
Germans are getting an existential crisis if VW's profit is "only" $8 billion and unprofitable companies in the US are initially sold at $trillion market cap.
SpaceX is not a growth stock. The launch business is limited and circular with Starlink, Twitter is a loss and xAI's hardware rental business is being entered by Meta and others.
281 comments - https://news.ycombinator.com/item?id=48933344 - "SpaceX stock erases all its gains and slides below IPO price in intraday trading" - latimes.com | 306 points | 1 day ago
149 comments - https://news.ycombinator.com/item?id=48604186 - "Americans express unease over SpaceX's influence on retirement savings" - theguardian.com | 253 points | 27 days ago
94 comments - https://news.ycombinator.com/item?id=48576113 - "With Wall Street’s help, you’re about to be forced to buy stock in SpaceX" - paulkrugman.substack.com | 114 points | 29 days ago
I can see them as a shared fate for a couple reasons:
* the obvious one is Elon - both valuations are largely propped up on belief in Elon. Whenever he falters, his companies that are speculation-based (all of them) will take a hit
* Elon pitched SpaceX as an AI company. Tesla needs better AI because they keep sending signals that they won't be at L5 anytime soon, and Tesla's valuation is still very speculative[0]at least in part due to the race to L5 autonomy. i.e. Tesla will need better AI , and SpaceX is that natural fit (on paper, at least, I'm not sure SpaceX has any useful AI for any use case, let alone self-driving).
[0] Tesla's PE ratio of is still 30x massively out of line with it's actual earnings and ~30x the American automotive industry.
There are rumors that the next step is a TSLA-SPCX merger. Each company has something that Elon wants but is hard to get: Elon has super-voting controlling shares of SPCX, but TSLA is part of the S&P500.
Once a company is listed, exchange rules prohibit adding super-voting shares, it has to be done prior to listing. In order to qualify for the S&P500 a company has to have a large enough market cap and be net profitable over an entire year in the market. It seems unlikely that SPCX will qualify for that bar in the foreseeable future.
However, a merger can combine both features into one company. TSLA recently rechartered in Texas, which makes it very hard for shareholders to sue. Presumably most of the TSLA shareholders today like Elon Musk, so they would be okay with the merger, and as mentioned above Elon has full control over SPCX. Since they are in totally different markets it is hard to see what sorts of anti-trust arguments even a hostile government (e.g. Europe or Democratic state level AG's) could convince a judge of. But he does kinda need the merger to seem like something of equal companies, not an acquisition of a failing company by a successful one, so that he can keep both of the features that he wants.
Elon likes his companies financially intertwined. He convinced the Tesla board to invest in xAI to help get it off the ground, which converted to SpaceX stock after the merger, so Tesla has about $2B in SpaceX stock on its balance sheet. SpaceX is also a pretty major customer of Tesla's batteries and cyber trucks and they're partners for his terrafab scheme. Plus, Elon is likely to sell some of his personal 15% stake in Tesla if he feels it's necessary to help SpaceX, which is his favorite child. The financial ties are likely to get stronger over time.
Also, the vibe is harshed, which is actually the most important factor for these kinds of wild valuations.
SpaceX is still a $1.6T company measured by the sum total paper value of all of its stock. Its stock would have to go down another 40% from today's value before it is not "a trillion dollar company."
It could grow, it could shrink, but it seems like the root comment misunderstood the headline by thinking it's current market cap is <$1T
Not really because it's irrationally valued because of musk. So you'd probably just be getting a fair valuation without him which would mean many more lost billions.
$200b seems very low for a company with this level of capital investment. They did 167 launches last year. It's one of the few industries where US is outproducing China. We have both more launches and heavier launches.
Put another way, the US spent $250b~ (inflation adjusted) dollars on the shuttle program, and we get much more output from SpaceX than we did for Shuttle.
The list contains target share prices, not market cap. $200 is way above the current $125.
The launch number is irrelevant. Starlink is SpaceX's largest customer and that is a problem. The revenue from launches is not great. The xAI fantasies are unproven.
SpaceX's annual revenue is estimated at $40B for 2026. A comparison might be Lockheed Martin, with annual revenue of $75B in 2025, and a market cap of $120B. So I wouldn't say $200B sounds low at all, even if their revenue doubles (twice, since $40B is actually a projection where they were doing $20B last year, though it's apples and oranges with the acquisition of Musk's failing companies.)
That's actually a great question. Valuation of public companies is part science, part art, and part total bullshit. You can go way down the rabbit hole on this sort of thing.
In days of yore you'd look at the fundamentals like:
- ability of the firm to service its debt
- profitability ratios
- revenue growth
- total addressable market
- competition
- market dynamics
etc.
You'd also pore over their quarterly and annual regulatory findings and see what's in the MD&A sections, assess the competency of senior leadership, look at how they view themselves, etc.
Then you'd look at comparable firms, i.e. companies doing the same or materially-similar things. Some of those are "pure plays", i.e. companies selling exactly the same product/service (e.g. TSMC, UMC, GFS) and some are not pure (e.g. red bull sells energy drinks but it also has a bunch of other stuff like a formula 1 team).
You compare your target company's fundamentals to those of its comparables, see what prices those comps are trading at, look at discounted cash flows, and then you pull a semi-informed number more or less out of your ass for the target as a forecast, based on your analysis.
These days, though, valuations are more or less completely disconnected from fundamentals. This is why Warren Buffett-style value investing is commonly said to be dead in today's market.
Are there any reasonable analyses of the practicality of data centers in space?
I know Dwarkesh Patel was interviewing Elon and brought up the fact that power cost for data centers is only 20%. The number I could find is 7-18%? GPUs are the majority of the cost. I don't think Elon responded directly to that.
There's the argument that licensing to build these things is cheaper in space. But earth has a lot of space in the middle of nowhere that no one would object to. That seems cheaper than space.
And the heat dissipation argument against it seems like a good one but I don't know if it's actually just a small engineering problem that can be solved cheaply or more fundamental.
On the plus side, you could say there is better connectivity in orbit. But if you're running inference, you'd probably want to talk to the same server that has your context cached. As it whips around earth, your latency would vary a lot, right?
I'd love it if someone could point me to a better analysis. It's an interesting question in general. Not just because one of the highest valued companies in the world is based entirely on its feasibility.
when the billionaires trigger a nuke fest, I assume they want their AI overload safe.
Before the IPO there was much concern that the changes in rules to allow fast inclusion in indices like Nasdaq-100 and Russell 1000 would mean that there would be an artificially elevated price. Was that effect just over-estimated? Or should SPCX have dropped even further without that support?
Investors clearly aren't familiar with rocket launches. SpaceX scrubbed their Starship launch last evening so they could fix an engine issue. SpaceX stock immediately crashed. Even worse, Rocket Lab, an entirely unaffiliated company, had its stock plummet after the SpaceX scrub.
[delayed]
Not sure why investors should be familiar with rocket launches when rockets are only representative of like 5% of the market value of SpaceX (per their S-1 filing to go public, 90%+ of their value comes from xAI/Grok).
Investors are clearly not familiar with anything Musk does, because it's all wildly overvalued.
A dip because of a scrubbed launch is a blip on the radar compared to the catastrophically bad ideas Musk is promising to implement. Data centers in space? That's just lunacy. A ridiculous idea from a ridiculous man.
> Investors clearly aren't familiar with rocket launches.
That is exactly what Musk was counting on. Reality is boring and no fun. People want promises, stars and dreams.
You just described the political situation in the States. My homeland is truly stuck in an alternate universe.
I wonder if some of that can be attributed to automated trading systems that interpreted the news related to SpaceX and performed sentiment analysis and then traded based on that.
The fact investors think (thought) SpaceX is worth more than $2T is another example of how they aren't familiar with rocket launches.
SpaceX stock price has nothing to do with rockets. The majority of the supposed 'valuation' is associated with AI.
tbf people familiar with how much of a non-event launches being scrubbed are could buy into the stock, if they didn't think it was still overvalued...
SpaceX stock has been tanking since its IPO, I don't think last night's scrubbed launch is the culprit.
Might have something to do with Musk making outlandish promises (AI datacenters in space) and the fact that most of the company's value is tied up in xAI, the shittiest AI provider.
Anybody that has traded crypto knew how to trade the SpaceX IPO. The IPO was just a low float/high fdv shitcoin launch. It's free money.
Germans are getting an existential crisis if VW's profit is "only" $8 billion and unprofitable companies in the US are initially sold at $trillion market cap.
SpaceX is not a growth stock. The launch business is limited and circular with Starlink, Twitter is a loss and xAI's hardware rental business is being entered by Meta and others.
Past month:
38 comments - https://news.ycombinator.com/item?id=48948435 - "Short sellers notch $8.7B profit as SpaceX shares dip to IPO price" - reuters.com | 71 points | 3 hours ago
281 comments - https://news.ycombinator.com/item?id=48933344 - "SpaceX stock erases all its gains and slides below IPO price in intraday trading" - latimes.com | 306 points | 1 day ago
603 comments - https://news.ycombinator.com/item?id=48920181 - "SpaceX bond worth 10% less than issue price – heading for junk bond status" - ft.com | 561 points | 2 days ago
98 comments - https://news.ycombinator.com/item?id=48639057 - "SpaceX sheds $400B in market value as debut rally hits reverse" - ft.com | 77 points | 24 days ago
66 comments - https://news.ycombinator.com/item?id=48634931 - "SpaceX Drops 14% in One Day, Price Now Below IPO Launch" yahoo.com | 62 points | 24 days ago
21 comments - https://news.ycombinator.com/item?id=48598558 - "The average SpaceX buyer post-IPO is almost under water after two-day slide" - cnbc.com | 40 points | 28 days ago
Bonus:
149 comments - https://news.ycombinator.com/item?id=48604186 - "Americans express unease over SpaceX's influence on retirement savings" - theguardian.com | 253 points | 27 days ago
94 comments - https://news.ycombinator.com/item?id=48576113 - "With Wall Street’s help, you’re about to be forced to buy stock in SpaceX" - paulkrugman.substack.com | 114 points | 29 days ago
morningstar said the fair price is $62
They're being generous.
Curious that Tesla stock fell in price at the moment of the Starship abort.
For what possible reason would a failed rocket launch affect the fortunes of an electric car company?
I can see them as a shared fate for a couple reasons:
* the obvious one is Elon - both valuations are largely propped up on belief in Elon. Whenever he falters, his companies that are speculation-based (all of them) will take a hit
* Elon pitched SpaceX as an AI company. Tesla needs better AI because they keep sending signals that they won't be at L5 anytime soon, and Tesla's valuation is still very speculative[0]at least in part due to the race to L5 autonomy. i.e. Tesla will need better AI , and SpaceX is that natural fit (on paper, at least, I'm not sure SpaceX has any useful AI for any use case, let alone self-driving).
[0] Tesla's PE ratio of is still 30x massively out of line with it's actual earnings and ~30x the American automotive industry.
There are rumors that the next step is a TSLA-SPCX merger. Each company has something that Elon wants but is hard to get: Elon has super-voting controlling shares of SPCX, but TSLA is part of the S&P500.
Once a company is listed, exchange rules prohibit adding super-voting shares, it has to be done prior to listing. In order to qualify for the S&P500 a company has to have a large enough market cap and be net profitable over an entire year in the market. It seems unlikely that SPCX will qualify for that bar in the foreseeable future.
However, a merger can combine both features into one company. TSLA recently rechartered in Texas, which makes it very hard for shareholders to sue. Presumably most of the TSLA shareholders today like Elon Musk, so they would be okay with the merger, and as mentioned above Elon has full control over SPCX. Since they are in totally different markets it is hard to see what sorts of anti-trust arguments even a hostile government (e.g. Europe or Democratic state level AG's) could convince a judge of. But he does kinda need the merger to seem like something of equal companies, not an acquisition of a failing company by a successful one, so that he can keep both of the features that he wants.
Elon likes his companies financially intertwined. He convinced the Tesla board to invest in xAI to help get it off the ground, which converted to SpaceX stock after the merger, so Tesla has about $2B in SpaceX stock on its balance sheet. SpaceX is also a pretty major customer of Tesla's batteries and cyber trucks and they're partners for his terrafab scheme. Plus, Elon is likely to sell some of his personal 15% stake in Tesla if he feels it's necessary to help SpaceX, which is his favorite child. The financial ties are likely to get stronger over time.
Also, the vibe is harshed, which is actually the most important factor for these kinds of wild valuations.
There is speculation about Tesla-SpaceX merger in the future.
Investor sentiment, including talk of a potential acquisition.
Do you think the fact they are both led by the same nazi lunatic is a possible reason?
I wonder what does it all mean for possible SpaceX Tesla merger.
Shorties having a field day with it!
I doubt it will ever become a $1T company ever again.
It's market cap is still closer to 2 trillion than 1.
so was the comment that it wouldn't grow, or wouldn't shrink. :)
SpaceX is still a $1.6T company measured by the sum total paper value of all of its stock. Its stock would have to go down another 40% from today's value before it is not "a trillion dollar company."
It could grow, it could shrink, but it seems like the root comment misunderstood the headline by thinking it's current market cap is <$1T
You could also read it as "it will never go down as low as $1T again".
The market might remain rational longer than Elon Musk can stay solvent.
Pretty sure they could recover all they've lost and more if they just hogtie elon to one of their rockets and launch it into the sun.
Might even be able to write it off on their taxes as they'd be doing the planet a public service.
Not really because it's irrationally valued because of musk. So you'd probably just be getting a fair valuation without him which would mean many more lost billions.
[dead]
SpaceX insiders have so many shares, once they can they are going to dump hard, get ready for another -$1T. Morningstar says $780 billion.
Clown show:
Raymond James - $800
Morgan Stanley - $300
Deutsche Bank - $255
JPMorgan - $225
Goldman Sachs - $205
Citi - $200
$200b seems very low for a company with this level of capital investment. They did 167 launches last year. It's one of the few industries where US is outproducing China. We have both more launches and heavier launches.
Put another way, the US spent $250b~ (inflation adjusted) dollars on the shuttle program, and we get much more output from SpaceX than we did for Shuttle.
The list contains target share prices, not market cap. $200 is way above the current $125.
The launch number is irrelevant. Starlink is SpaceX's largest customer and that is a problem. The revenue from launches is not great. The xAI fantasies are unproven.
SpaceX's annual revenue is estimated at $40B for 2026. A comparison might be Lockheed Martin, with annual revenue of $75B in 2025, and a market cap of $120B. So I wouldn't say $200B sounds low at all, even if their revenue doubles (twice, since $40B is actually a projection where they were doing $20B last year, though it's apples and oranges with the acquisition of Musk's failing companies.)
As the other poster said it is guidance from analysts. The Raymond one at the top equates to $10T valuation
Reusable launch vehicles were in their infancy during the Shuttle program days.
Multiple launch vehicles and crew vehicles exist now, and more are on their way.
Taking tech from TRL1 to TRL9 with 2.5million moving parts in it is vastly different from coming up with another TRL9 design.
How do they come up with these numbers?
They pull them out of their (*((
That's actually a great question. Valuation of public companies is part science, part art, and part total bullshit. You can go way down the rabbit hole on this sort of thing.
In days of yore you'd look at the fundamentals like:
- ability of the firm to service its debt
- profitability ratios
- revenue growth
- total addressable market
- competition
- market dynamics
etc.
You'd also pore over their quarterly and annual regulatory findings and see what's in the MD&A sections, assess the competency of senior leadership, look at how they view themselves, etc.
Then you'd look at comparable firms, i.e. companies doing the same or materially-similar things. Some of those are "pure plays", i.e. companies selling exactly the same product/service (e.g. TSMC, UMC, GFS) and some are not pure (e.g. red bull sells energy drinks but it also has a bunch of other stuff like a formula 1 team).
You compare your target company's fundamentals to those of its comparables, see what prices those comps are trading at, look at discounted cash flows, and then you pull a semi-informed number more or less out of your ass for the target as a forecast, based on your analysis.
These days, though, valuations are more or less completely disconnected from fundamentals. This is why Warren Buffett-style value investing is commonly said to be dead in today's market.
Biggest scam in history! :)
Not the biggest but I am sure it is in the top 10. FWIW, I say the top 7 scams occurred in the past 2 years.
Great. We can only hope it goes to zero.
We can do more than hope.