Episode summary
SpaceX Looks to Wall Street to Validate Extreme Market Valuation | Bloomberg Intelligence
Bloomberg Intelligence
· · 25 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: George Ferguson, Michael Shepard, Ira Jersey, Brendan Murray
Summary
The discussion opened on SpaceX, where George Ferguson argued that the company’s public valuation will depend on how investors model a business that is still evolving across launch, satellites and a possible AI effort. He said BI’s model sees revenue rising from $19 billion in 2025 to about $160 billion in 2030, with operating income swinging from negative $2.5 billion to almost $21 billion, led by connectivity and a growing AI contribution. He also flagged the financing risk, noting that the company may need roughly $100 billion of debt and additional equity issuance to fund data centers, Starship and other expansion.
The conversation then turned to tech policy, where Michael Shepard said OpenAI’s reported proposal to give the US government a 5% stake is really about setting up a public-benefit mechanism before an IPO, not a completely new idea. He contrasted that with Bernie Sanders’ far larger proposal for a one-time 50% tax, and said Apple’s effort to source memory chips from Chinese firms on a Pentagon blacklist underscores how AI-driven demand is squeezing supply chains and intensifying Washington pressure.
Ira Jersey said the weaker June jobs report is pricing out near-term Fed hikes, especially because the unemployment rate fell for the wrong reason: labor-force participation dropped. He added that oil near $75 a barrel is no longer a major driver of rates, while Brendan Murray said the decision not to renew the US trade deal with Canada and Mexico keeps tariff uncertainty alive for automakers and other cross-border businesses.
Key takeaways
- George Ferguson said SpaceX could grow revenue from $19 billion in 2025 to about $160 billion in 2030, with AI becoming a major profit driver.
- The BI model assumes SpaceX will need about $100 billion of debt by 2030, plus possible share issuance, to finance its expansion.
- Michael Shepard said OpenAI’s reported 5% government-stake idea is meant to seed a public-benefit fund and is not the same as Bernie Sanders’ proposed 50% tax.
- Ira Jersey said the June jobs report pushed out expectations for an early Fed hike, partly because the drop in unemployment came from fewer people participating in the labor force.
- Brendan Murray said uncertainty around USMCA and replacement tariffs is still the main concern for automakers, farmers and energy companies operating across North America.
Notable quotes
“we've wired in about a hundred billion dollars of debt out to 2030 that end up raising their their initial offering here”
“The real headline in the report from the Financial Times from overnight was the size of the stake, the 5%”
“the unemployment rate actually fell a tenth, but it fell for the wrong reasons”
How the episode opens
Bloomberg Audio Studios podcasts radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m.
Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We mentioned IPOs, we mentioned SpaceX.
George Ferguson is one of many of our BI analysts tasked with trying to get some fundamentals around this company uh because it's kind of a company that covers all these different industries. George is of course our senior industry analyst covering aerospace and defense. George um you have this tall task of putting fundamentals to SpaceX when all anyone can remember is the total addressable market being what was the number
29 trillion — 29 trillion 28 trillion north of 28 trillion doesn't matter at this point. Um, George, can you give us some sense of what profits will look like for SpaceX once it is sustainably profitable?
Yeah. So, um, so look, I mean, I should say I should start by saying SpaceX is a company that's in a lot of flux, right? It's essentially building out I think the bigger portion of the story is it's building out an AI business.
I'm not sure we totally understand what the AI business looks like for anybody. And when they're done, they're gonna, I think, put these data centers in space. That's where they're trying to go.
So, you know, we're not only a business that's uh I think nobody fully understands what it's going to look like when it's done. They're going to go one step further and try to make it extraterrestrial. So, we've put together a model though in the Bloomberg um service.
You can find it under BI space AE OG an interactive model or you can load the SpaceX ticker and type in MODL modl for your model.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- spacex ipo valuation
- bank analyst coverage quiet period
- openai us stake proposal
- apple china chip approvals
- june jobs report and fed rate bets
Companies and tickers mentioned
- AAPL
- GS
- MS
- BAC
- C
- JPM
- SpaceX
- OpenAI
- Apple
- Goldman Sachs Group Inc.
- Morgan Stanley
- Bank of America Corp.
- Citigroup
- JPMorgan Chase & Co.
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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