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SpaceX Commentator$SpaceX(SPCX.US)$Micron Tech(MU.US)$NVIDIA(NVDA.US)
Short-to-medium term stock prices continue to face pressure; scarcity is insufficient to counterbalance the suppression from technology execution risks.
That's right, Falcon 9 is a mature, scaled system for recovering first-stage rockets, a tool for strong cash flow, while Starship is the most promising future cash king for commercialization, the world's most advanced next-generation fully reusable and recoverable system, and the future cash-generating hope for SPCX. Combined with the full industry chain integration advantages of deep space/orbital economy/space AI, it is indeed the core driving force behind SPCX's high valuation and long-term growth.
Undoubtedly, the core reason the market gives a high premium is based on the expectation of technological leadership in reusable systems, but its technology execution risk is simply too high. Admittedly, the absolute admiration for Elon Musk, the market's overheated frenzy for the IPO, and the unparalleled scarcity did lead to a significant surge right after listing. However, the excessively high technology execution risk, especially the four major incidents this year, will inevitably damage confidence in the still-immature Starship system. Coupled with the upcoming earnings report and further share unlock, the massive bond issuance for Cursor, and the instability of the ever-changing Middle East situation suppressing high-valuation tech stock prices, once the market hype fades, a rational downward correction in value is inevitable. After all, the surge to over $2 trillion in market cap within days of listing clearly overdrew future value expectations. Personally, I still believe SPCX's short-to-medium term stock price will continue to face pressure.
The stock market carries risks; invest with caution. The above is merely a personal view and does not constitute any investment advice.
$SpaceX(SPCX.US)$NVIDIA(NVDA.US)$Micron Tech(MU.US)
SPCX's Scarcity vs. Execution Technology Risk
1. SPCX's Scarcity.
SPCX is currently the only company in the world capable of mature, large-scale recovery of first-stage rockets. This capability directly reduces launch costs to a fraction of other companies', creating an extremely deep moat. Starlink's low-orbit satellite network also has no comparable rival at the moment.
The market's ability to assign a high valuation to SPCX is largely based on its next-generation fully reusable system, Starship. Starship is SPCX's biggest cost advantage, as both the booster and the spacecraft can be fully recovered and rapidly reused, allowing for repeated operations like an airplane. Starship also possesses the following characteristics: massive payload capacity, orbital refueling capability, and adaptability to multiple missions.
SpaceX has both the main operational rocket Falcon 9 as a primary revenue generator and Starship as a revolutionary next-generation leading technology. This is where the market gives it a premium, representing SPCX's greatest advantage and its core scarcity value.
2. SPCX's Execution Technology Risk
SpaceX's execution technology risk also lies with Starship, due to its far greater complexity compared to Falcon 9.
Although Starship, which has not yet entered mature commercial operation, has enormous potential, its current execution technology risk is too high. Why is that? In fact, Starship is still in an intensive testing phase. Despite multiple test flights, issues like engine failures and landing failures are frequent during testing. It has already experienced four major technical incidents in the first half of this year, indicating that the execution risk is indeed significant.
In reality, the premium the market gives SPCX is largely built on the expectation of technological leadership in reusable systems. However, if Starship's progress is severely delayed, or if there are several more major failures or incidents, investor confidence in its moat will be shaken.
Considering points 1 and 2 above, it's not hard to see that Starship is SPCX's double-edged sword. It can bring scarcity premiums but also severe execution technology risks, leading to significant valuation downgrades.
The end of July and early August will see SPCX's first earnings report and a new round of lock-up expirations since its IPO. Coupled with Starship's consecutive failures this year, the technology execution risk is further amplified. Although the moat still exists, market confidence has already been affected.
In the short to medium term, its scarcity has been clearly suppressed by technology execution risk. Personally, I believe the $2 trillion market cap has clearly overdrawn future expectations, and the stock price is likely to face pressure in the short to medium term. Of course, this doesn't mean I'm bearish on SPCX; I am also very bullish on its long-term value. One day, Starship will truly mature, and its scarcity will be unparalleled.
The above represents only personal views and does not constitute any investment advice!
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