The greatest enemy of knowledge is not ignorance. It is the illusion of knowledge. - Stephen Hawking
Henderson, NV
Joined July 2019
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G. Paco Gonzalez retweeted
SpaceX is trading at 11x forward sales while revenue almost triples in 6 months.
I don't think people understand what this means yet. So I did the math.
1. What Elon actually said
"SpaceX revenue this quarter alone will be substantially higher than NASA’s entire annual budget!"
NASA's entire annual budget: $24.4B.
SpaceX Q3 revenue: $14.6B.
My call: $30B+ this quarter.
Then $40B+ in Q1.
Revenue almost triples in 6 months. Let that sink in.
2. The old Q1 guide is already obsolete
SpaceX guided $33-37B of revenue for Q1.
My call is $40B+.
That is 9-20% above the old guide.
And that is just Q1.
Elon on 21 Oct: "As crazy as this sounds, $1T in SpaceX revenue in 2028 is no longer impossible."
3. So this means
$40B in one quarter = $160B a year.
$SPCX at $132.47 = a $1.80T company.
$1.80T / $160B = 11x forward sales.
For revenue almost tripling in 6 months.
For the company Elon says could hit $1T revenue in 2028, you pay 1.8x those 2028 sales.
Cheapest big stock in the market. Not even close.
4. This is NOT profitless growth
Q3 revenue: $14.575B.
Net income: $4.404B.
That is a 30.2% net margin. Actual net profit.
Other AI companies spend billions chasing future profits.
SpaceX already makes 30 cents on every dollar while building AI compute, Starlink and Starship at the same time.
5. Now turn those sales into actual earnings
If the 30% margin holds:
$40B x 30% = $12B of quarterly profit.
$12B x 4 = $48B of annual profit.
$48B / 13.58B shares = $3.53 of forward EPS.
At $132.47, you pay 38x that earnings.
50x = $177.
60x = $212.
No merger premium.
No $100T dream.
No orbital data centers.
Just the Q1 revenue run-rate and Q3's actual margin.
6. Why 38x is cheap here
Normal companies at 38x earnings grow 10-20%.
SpaceX is almost tripling revenue in two quarters.
It is a hypergrowth AI compute monopoly with a 30% net margin, the rockets to expand that compute into space and Starlink on top.
People see 11x sales and say expensive.
I see revenue almost tripling and say they have no idea what they own.
7. Calling it now
Analysts will raise their revenue estimates.
Then their earnings estimates.
Then their targets.
Then the same people calling $SPCX expensive at $132 will buy it above $200.
Every $1,000 becomes $1,335 at $177.
$1,600 at $212.
And the $1T 2028 opportunity still isn't in this math.
That's the whole secret.
The stock is priced for a company that doesn't exist anymore.
You are still very insanely early lol
$SPCX
Elon just gave us a Q4 revenue hint without giving us the number, so I did the math for you. Its a blowout
"SpaceX revenue this quarter alone will be substantially higher than NASA's entire annual budget!"
NASA's FY2026 budget: $24.4B.
Wall Street expects $22.9B from SpaceX in Q4.
Even its highest estimate is $27.4B.
And "substantially higher" suggests Elon is talking about a lot more than just clearing $24.4B.
Call it ~$30B.
That would be:
2.1x Q3's $14.6B revenue
31% above the street average
10% above the street high
This is why the "SpaceX survives on NASA subsidies" take is so outdated. NASA supplied less than 5% of last year's revenue.
Now Elon is casually comparing one SpaceX quarter to NASA's entire year.
$SPCX
G. Paco Gonzalez retweeted
Tech Stocks in Bear Market Territory:
1. SanDisk, $SNDK: -66%
2. Arm Holdings, $ARM: -64%
3. Coinbase, $COIN: -63%
4. Nebius, $NBIS: -62%
5. Seagate, $STX: -60%
6. Marvell Technology, $MRVL: -59%
7. ServiceNow, $NOW: -57%
8. Oracle, $ORCL: -56%
9. AppLovin, $APP: -54%
10. Circle, $CRCL: -54%
11. Super Micro Computer, $SMCI: -51%
12. Micron, $MU: -48%
13. Dell, $DELL: -47%
14. SpaceX, $SPCX: -47%
15. Qualcomm, $QCOM: -43%
16. Broadcom, $AVGO: -41%
17. AMD, $AMD: -39%
18. Robinhood, $HOOD: -38%
19. Alphabet, $GOOGL: -32%
20. Tesla, $TSLA: -32%
21. Palantir, $PLTR: -28%
22. TSMC, $TSM: -28%
23. Meta, $META: -26%
24. CrowdStrike, $CRWD: -26%
25. Nvidia, $NVDA: -25%
The S&P 500 has now erased -$4 trillion in market cap since October 6th.
G. Paco Gonzalez retweeted
On today's stock market crash:
As an investor, on days like today, you have to ask yourself one question: What fundamentally changed over the last 24 hours?
The shift in the fundamental backdrop cannot be attributed solely to the Midterm Election results; markets had already largely priced in the outcome.
So, what changed between yesterday and today? What is the fundamental reason for today's decline?
One of the most likely catalysts is growing concern about a potential "ban" on AI, or at the very least, severe regulation of the industry.
Over the last 24 hours, Democratic lawmakers have publicly called for restrictions on advanced AI development, including an outright "ban on artificial superintelligence."
Frankly, an outright ban will not happen.
Such a ban, if even possible to enforce, would effectively mean the US surrendering its position in the global AI race to China.
Does this mean AI is "over" or today's stock market crash marks "the end?" Absolutely not.
Rather, we believe we are witnessing a sudden shift in sentiment colliding with excessive levels of leverage, potentially triggering forced liquidations by several major institutional investors.
Therefore, today's downturn is more technical than fundamental. This is not to discount the concerns around regulation, they are legitimate. But price action right now does not look orderly or rational.
We are in the midst of the biggest technological revolution in human history.
Zoom out and remain calm.
G. Paco Gonzalez retweeted
US industrial capacity has been eroding for decades, and with it the fortunes of our middle class and to an extent, our national security. Data center development and our leadership in AI can reverse that trend, finally. Current hysteria to block all projects everywhere is a gift to China.
G. Paco Gonzalez retweeted
What's happening in stocks right now is crystal clear.
Fundamentally, nothing has changed over the last 60 minutes.
This is the product of record levels of leverage colliding with a sudden shift in market sentiment.
Sentiment is the ultimate driver of price.
For months, we have been commenting on the historic levels of leverage in today's markets.
This is precisely what happens when sentiment reverses in an overleveraged market.
We will have more to say on this shortly.
G. Paco Gonzalez retweeted
The US semiconductor SELLOFF may be only getting started:
Semiconductors now account for near a record 16% of the S&P 500's market cap, down slightly from ~18%.
This decline follows a -30% drop in the Semiconductor Index from its June peak.
By comparison, at the peak of the 2000 Dot-Com bubble, semiconductors accounted for 7% of the S&P 500's market cap before more than halving to 3% by 2002.
Meanwhile, the entire tech sector accounts for ~37% of the market, also well above its 2000 Dot-Com Level.
For perspective, defensive sectors accounted for less than 20% of the market just weeks ago, before they began to take off.
If rotation into defensive sectors continues, semiconductors could face a rough path ahead.
Great Chart: @Todd_Sohn
G. Paco Gonzalez retweeted
Charlie Munger on how to live a successful life:
“I think personal discipline, personal morality, good colleagues, good ideas..all the simple stuff…All of those old virtues, they all work.”
G. Paco Gonzalez retweeted
Latest US macroeconomic data show:
Robust productivity: Q3 productivity grew 3.6% (vs. 2.9% consensus).
Resilient labor market: Initial weekly jobless claims dropped to 189,000.
Easing wage costs: Unit labor costs fell 0.7% despite strong employment conditions.
#economy #markets
G. Paco Gonzalez retweeted
Warren Buffett: “In order to succeed you must first survive.”
Most new investors prioritize beating the market. The first goal should be avoiding ruin.
Outperforming is ideal. Staying in the game is mandatory.
G. Paco Gonzalez retweeted
Your next phone plan could one day come from $SPCX. 🚀
$QCOM says its Dragonwing tech will power Starlink Mobile’s nationwide 5G network, which would put Starlink in the same ring as AT&T, T-Mobile, and Verizon.
Read more: yhoo.it/4sIOvz4
G. Paco Gonzalez retweeted
A wide range of indicators confirm that the economy has been the #1 issue for voters in the US midterm elections.
Within the economy, it’s primarily about affordability ... and within affordability, a major focus remains gas prices.
#economy #markets #elections #Midterms2026
G. Paco Gonzalez retweeted
US semiconductor stocks have rarely been this volatile:
Over the last 5 mins S&P 500 Semiconductors & Semiconductor Equipment Index has recorded 11 trading sessions in which at least 50% of its components fell -5% or more, the 4th-highest reading on record.
By comparison, during the 2008 Financial Crisis, the index recorded 16 such sessions.
The only other periods with more volatility were 2000 and 2002, following the Dot-Com Bubble burst.
Furthermore, the S&P 500 Semiconductors & Semiconductor Equipment Index fell more than -5% on 12 trading days over the last 5 months.
The index is now down -32% from its June peak, trading at its lowest level since April.
Semiconductor stocks are experiencing historic volatility.
G. Paco Gonzalez retweeted
BREAKING: Iran now rejects claims of a breakthrough in negotiations with Washington, telling Reuters that a deal to end the war remains far off. Tehran says the Strait of Hormuz will not reopen until its conditions are met, with nuclear negotiations only to follow afterward.
A senior Iranian official confirmed that an eight-day draft deal mediated by Qatar has failed to bridge core divides due to Washington’s "excessive demands". With U.S. jets conducting strikes on Qeshm Island and multiple tankers ablaze in Hormuz after hitting mines, Tehran reiterated that it is prepared for combat and will retaliate without geographic constraints against any fresh American offensive.
G. Paco Gonzalez retweeted
Elon Musk says the AI boom will hit a WALL by the end of 2026.
He says the whole industry is about to learn a hard lesson in hardware.
Chip output is exploding, but electricity is nearly flat everywhere outside China.
So the two lines cross this year.
He says by the end of the year, we will be making more AI chips than we can actually turn on.
Millions of them pile up with nowhere to plug in.
In his words, the bottleneck for the next year is not chips, it is raw power.
Whoever can turn on the most chips fastest wins the race.
In the end, the AI race comes down to one thing:
Raw electricity.
— Elon Musk (.@elonmusk) on Dwarkesh Patel's (.@dwarkesh_sp) podcast
Elon Musk says billion dollar AI companies with money to spend can't build power plants fast enough to meet AI's electricity demand.
Every major power project requires approvals and equipment, including:
• Switchgear
• Gas turbines
• Power plant permits
• Electrical transformers
• Utility interconnection studies
• High-voltage transmission lines
• Specialized turbine blades and vanes
If even one component is delayed, the entire project stalls... leaving AI chips without electricity.
Musk says gas turbines are sold out through 2030, with specialized blades and vanes being the biggest bottleneck.
Building more power plants isn't the quick solution AI companies thought it'd be.
— Elon Musk (.@elonmusk) on Dwarkesh Patel's (.@dwarkesh_sp) podcast