Key insights
- The article questions the realistic attainability of SpaceX's rumored $1.75 trillion valuation, highlighting aggressive growth assumptions required to justify it. Such a valuation implies SpaceX would capture 2.4% of projected US GDP by 2035, demanding sustained ~50% annual revenue growth for a decade. The author suggests this could be a case of FOMO pricing rather than a reflection of achievable growth, leaving the ultimate outcome to time.
Rumors of a June 12 Nasdaq listing for SpaceX at a $1.75 trillion valuation are heating up, so i've been looking at the math behind that number and the assumtions are... aggressive, to say the least.
According to Fortune/New Constructs ....https://news.futunn.com/en/post/74244292/what-does-spacex-s-sky-high-valuation-imply-it-would?level=1&data_ticket=17809234445217....., even assuming a relatively modest 10% annual return for investors, SpaceX would need to: grow revenue from $18.7B today to roughly $1.1T by 2035, sustain ~50% annual revenue growth for 10 consecutive year and eventually generate more revenue than Amazon does today. So by 2035, a single company would account for roughly 2.4% of projected U.S. GDP. And thats using a surprisingly low cost of equity for a company operating in space, AI, and other high-risk growth markets.
SpaceX may be an extraordinary business. But does a $1.75T valuation imply one of the greatest growth stories in corporate history... or just one of the greatest cases of FOMO pricing?...or we should say that only time will answer...