I get the point the author is trying to make (in that SpaceX's most valuable asset is its compute capacity), but it's not quite the right analogy.

SpaceX is basically Elon's holding company for everything-but-Tesla at this point. If you're betting on SpaceX, you're betting on a conglomerate.

As a comparison point, CoreWeave’s most recently reported operating margin was 16%.

They’re in good company, competing with Amazon, CoreWeave, Google, Microsoft, Nebius, and many other players for the same business. They just invested (through the X.ai acquisition) in more capacity than they could take advantage of to get there.

Even if they manage to make a profit selling this capacity to Google, Anthropic, and others, it might not be enough to push them into profitability as a whole. That remains to be seen, and you keep asserting without evidence that it is true.

You keep saying this even though you don’t present any evidence that it will make SpaceX profitable. Where are your numbers?

It was an error by implication. They responded with something that appeared to disagree when I responded that any profit SpaceX earns under GAAP solely depends on the revenues and expenses, and is not dependent on Google’s investment.

> The cost of AI data centers is almost entirely the capex (10% opex, 90% depreciation)

The operating costs might not vary much, but these boxes are not cheap to power, house, and cool. Not sure about the 10% opex claim, but am happy to see real world numbers.

A quick peek at their S-1 filing shows a $5B annual loss last year. Unless SpaceX is selling compute to Google at a 50% margin (unlikely but possible), they’re not going to turn a profit because of this deal. Any profit that does result will be small.

Google’s equity investment and P/E multipliers are irrelevant and have no bearing on SpaceX’s profitability. It should also be noted that when there are no earnings (i.e. net profit), the P/E ratio is NaN. There are no “securitized profits” when there are no profits.

And I have no idea why the OP responded to my response about the math not making sense the way they did. I said “equity investments aren’t revenue”. The response strongly implied that they believed equity investments in a company are revenue. Perhaps I read that wrong, and if so, I owe OP an apology.

If there’s financial engineering going on with SpaceX, it’s not merely because they have customers who are also equity stakeholders in a company. This is as common as the day is long. The top level comment is just a red herring.

I’m aware of the guidelines. Another guideline should be “check yourself for accuracy before you reach for the keyboard”—especially since it’s easier than ever. Giving false information that, if practiced and not disclaimed, could land someone in jail is irresponsible.

You don’t know what you’re talking about and are way out of your lane. Stop now. In fact, you should retract your parent comment and apologize to the community for leading them astray.

Did you even try to ask even ChatGPT or Claude about this first?

Google’s investment in SpaceX is completely orthogonal to the analysis. Equity investments aren’t revenue for the issuer. (Gains on sale would be revenue to the investor, in which case, this would be Google, not SpaceX.)