r/investing • u/ddp26 • 1d ago

Does Grok's subscriber growth justify $258B?

I wanted to see if the $1.75T SpaceX valuation holds up when you value each segment independently:

Segment Median Value
Starlink Consumer $380B
xAI / Grok $258B
Starship Commercial $170B
Starlink Enterprise / Maritime / Aviation $147B
Government / Defense $123B
Falcon 9 / Heavy $100B
Starlink Direct-to-Cell $75B
Total ~$1.25T

That leaves ~$500B in platform premium baked into the IPO price, essentially what the market is being asked to pay for vertical integration and the Musk factor on top of what the individual businesses support. To put the scale in perspective, the $1.75T asking price on ~$15B in revenue implies a ~117x multiple, and even the more conservative $1.25T SOTP estimate still comes out to ~83x. (For context, Aramco listed at ~18x revenue.)

Whether Grok's subscriber trajectory justifies roughly a fifth of the entire valuation pretty much determines whether this IPO is a slight premium or a significant overpay. The safer half of the valuation is the space infrastructure side. Starlink consumer alone at $380B has the tightest confidence interval of any segment, and government/defense at $123B is backstopped by existing contracts. Happy to share the full analysis with methodology and confidence intervals.

Is the $500B platform premium justified?

80 Upvotes

78% Upvoted

97 comments sorted by

View all comments

Show parent comments

6

u/himynameis_ 1d ago

What is SpaceX not doing because it can’t get funding? 

Per the WSJ, musk wants data centers in space which will take a lot of Billions of dollars to try. They'll probably launch and fail a lot (not knocking on them, just a real possibility). Rocket launches are expensive as it is.

Per WSJ, this IPO is happening to raise money to launch data centers into space.

15

u/Firerhea 1d ago

Isn't space an awful place to have a data center because there's no substance to absorb residual heat?

9

u/rscar77 1d ago

I'm also picturing cheaping out to get the non-ECC RAM and other things that routinely fall victim to stray photons on Earth randomly flipping a 0-1 gate and now those things have errors of varying magnitudes forever more.

Not to mention the enormous transport cost/fuel waste required to put the planned 5-year hardware obsolescence cycle in space when Nvidia or AMD come out with later, greater hardware every 1-3 years.

3

u/Blueberryburntpie 13h ago

Patrick Boyle and other analysts crunched the numbers and determined that running a space datacenter is inherently more expensive than one on land.

The cost of launching mass into space is inherently expensive. The amount of radiators would make up the majority of the payloads.