Tesla (TSLA) and Amazon (AMZN) are facing headwinds as investors anticipate a potential $1.75-2 trillion SpaceX-xAI IPO that could reshape the S&P 500 and redirect capital away from the Magnificent Seven tech giants.
SpaceX possesses an unmatched economic moat through its reusable rocket technology, satellite constellation (Starlink), and data center AI capabilities, positioning it to potentially command premium valuations and offer services to competing tech firms rather than vice versa.
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There’s more to Elon Musk than just Tesla (NASDAQ:TSLA) stock. And soon, retail investors will be able to get a piece of a company that may very well outshine the electric vehicle (EV) and robotics powerhouse. With EV sales and shares of Tesla under considerable pressure in April, perhaps there’s no better time for another Musk-led firm to hit the private markets. With SpaceX combining with xAI, an AI firm that would be worth a fortune itself, the stage seems set for the biggest IPO of all-time, with a target valuation that might hit $2 trillion on the upside.
That’s not only big, but it will reshape the S&P 500 as we know it, given its top-heaviness. Any way you look at it, the stock market is about to move into a new era beyond the Magnificent Seven, as Elon Musk’s rocket and AI company looks to change the world.
With the Elon Musk premium attached, the rocket ship excitement factor, and the upside surrounding xAI’s Grok as well as its different approach to AI, I certainly wouldn’t be surprised if investors who don’t get a seat on day one end up having to pay a price that implies a market cap well north of $2 trillion. As exciting as the businesses (from reusable rockets to AI chips for data centers in space) are, I view the name as more than a hype-driven titan.
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The company isn’t just on the cutting-edge of tomorrow’s tech; it’s actually making money from industries (think SpaceX and Starlink) that the rest of the corporate world seems eager to break into. Of course, there are considerable barriers to entry when it comes to sending satellite payloads into space. The same goes for designing economical rockets. In any case, I think once SpaceX (SpaceX-xAI or whatever it’ll be called) has the potential to be one of the more magnificent members of the Mag Seven.
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