On August 5, I shared with the Business Ontology Community and on X that I bought SpaceX at $112 per share. It’s a small position, around 3% of the Lorenzo2cents portfolio, for now.
Here are the reasons why I think it just makes a lot of sense.
It is going to be the largest hyperscaler and it is cheap
Management is guiding to about $100B ARR (including Space, Connectivity and AI) by the end of the year, which at the price I bought is around 15x Price to ARR. For a company which can “easily” keep growing double digits for several years, it’s not a high multiple.
Elon is projecting compute capacity closer to 10 GW than 5 GW by the end of 2027. At pricing in the latest disclosed leases - about $50M per MW on the Anthropic/Colossus 1 deal, with Google paying $920M a month for a large GPU block — and assuming part of the capacity will be used internally (Grok training and inference), this can generate, together with the other businesses, $300B+ ARR by the end of 2027 (SemiAnalysis estimate, not company guidance). If that happens, at the price I bought, SpaceX stock will have a 5x Price to ARR multiple at the end of 2027. Pretty cheap.
Elon and the SpaceX team have already proved they can build and bring compute capacity online faster than anyone else, with 122 days to bring Colossus 1’s ~300MW online and Colossus 2 ramping even faster toward multi-hundred-MW and gigawatt-scale clusters. There are no reasons to believe they won’t keep delivering. The historical disadvantage compared to other hyperscalers was the smaller balance sheet, compared to the enormous AI capex bill.
Elon recently said they will build exclusively on Nvidia’s Vera Rubin stack, which I think may help with supply and partnership economics, with Nvidia financing part of the deal.
Tesla dilution
I own Tesla. It’s around 7% of the Lorenzo2cents portfolio at the time I write.
Tesla and SpaceX are more and more integrated and their destinies are tied. Think about Terafab, Grok for Tesla’s cars, SpaceX tech for Tesla Roadster, Tesla solar panels and batteries for SpaceX datacenters, Tesla’s Optimus for moon colonization, and more certainly to come.
I think they will merge, eventually. It would make any synergy easier, including for Elon’s governance.
One of the biggest concerns about this obvious merge is the potential dilution of Tesla shareholders, as Elon will want to maximize his control of the merged company and somehow will make a better deal for SpaceX rather than Tesla. Elon’s ownership of SpaceX is higher: he has voting control — roughly four-fifths of the votes through super-voting shares — while his Tesla stake is only around 15% of shares.
One way to mitigate this risk is to own both $SPCX and $TSLA, ideally in equal parts. This way, if you are going to be diluted on one side, you are the recipient of that benefit on the other side and the result is neutral. Of course, for this to make sense, you need to get SpaceX at a reasonable price before the merge becomes priced in, which I think I did.
Grok
Grok is basically valued at zero so far, and one could say fairly, as it has been far from frontier-model intelligence and far from capturing a meaningful market share among enterprises or consumers, with Anthropic and OpenAI hitting all the headlines and benchmarks, for good reasons.
I think this is going to change and Grok is now underestimated.
Grok 4.6, released on August 12, is back in the frontier conversation. It is competitive on some agent/coding and cost-performance comparisons, even if it is not clearly #1 versus Claude Opus 5 on the main public leaderboards. Grok 4.7 is expected next - Elon has pointed to roughly early September after the 4.6 launch - and he is promising another push toward the top of the frontier.
It will likely be leapfrogged by Anthropic after a few weeks or days, so likely xAI is still behind at least 3 months to the leading frontier lab.
But:
Elon is now back in the race and he doesn’t like to be the second at anything, so I would not be surprised to see Grok taking the lead in a few months.
xAI will likely have the largest compute available to any frontier lab for training new models, which is a big advantage
Elon disclosed that xAI/SpaceX is putting decades of SpaceX engineering data into upcoming Grok training, which in my view can give it an unfair advantage against competition, positioning it to become the go-to model for specific engineering domains.
I don’t see why, eventually, Tesla’s engineering data shouldn’t also be used to train Grok models, reinforcing its lead in the engineering domain
X data were and will increasingly be an advantage for training new models as Grok catches up
I expect Tesla cars and Optimus data will also be used to reinforce Grok’s understanding of the physical world
Owned distribution channels for Grok, beyond Grok apps: Cursor, X, Tesla’s cars, Optimus (forward looking).
All in all, I just see it as likely for Grok to become one of the leading models, and with Anthropic and OpenAI already valued near or targeting the trillion-dollar tier, this is not priced in yet.
Space and Connectivity
The revenue generated by Space (launches and satellite services) and Connectivity (Starlink) is clearly already priced in, including the discounting of future growth.
But the value of these two assets resides elsewhere, beyond the revenue.
These two capabilities are highly synergic with everything else Elon is doing and are basically positioning him to have an unfair advantage in the long term. Here are some examples:
Elon/Tesla are integrating Starlink into Cybercab (the purpose-built robotaxi). Tesla has already shown Starlink V5 built into the design, which should help connectivity and fleet operations even if autonomy itself still runs on the car. It will likely do the same with Optimus and then with all Tesla’s cars. Can competitors do the same? Sure, but for now they need to rely on Starlink to accomplish that. Even when competition catches up, they will still be paying a fee to whoever supplies the service.
Orbital datacenters may be 5 or 10 years away, or more, before becoming anything meaningful, but yet, I think they will happen. I consider this an upside, but it alone could be worth more than any other company’s product or service in the world right now.
SpaceX is the gatekeeper to space, which I believe will become, together with AI and longevity, the biggest industry in the world. Even when Rocket Lab, the only credible competitor (which by the way I own), successfully scales Neutron, the competitor to Falcon 9, SpaceX will still be shipping most of the mass to orbit with Starship and will be the only one able to enable specific use cases like orbital data centers.
Conclusion
I believe $SPCX can be a $10 trillion company in 5 to 10 years, and I believe its downside is limited at this valuation, while it also hedges my $TSLA position. This makes it a good fit for the Lorenzo2cents portfolio.
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I can be and will be (hopefully not often) WRONG. This is just my personal strategy—NOT FINANCIAL ADVICE. I don’t know your financial or life situation well enough to give any recommendations. Please do your own due diligence and research. Don’t be LAZY.
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Ciao
Lorenzo
buena argumentación Lorenzo tengo pensamientos similares, estoy planteando la opción de hacer un DCA semanal con las acciones de SpaceX.