Behind the video
SpaceX Q3-2026 Earnings Report & Call: LIVE
Overall Thesis
The host views SpaceX's reported profitability, AI compute expansion and connectivity growth as grounds for substantial investment upside and continued share purchases. He retains a long-term Tesla thesis but considers trimming Tesla to buy SpaceX, pending Tesla's earnings, and strongly favors a merger.
Narratives
SPCXSpaceXThe host sees SpaceX as undervalued around a $2 trillion market capitalization following its earnings release and expects substantial valuation growth. He plans additional purchases, emphasizing AI compute monetization, strong connectivity growth and the balance sheet while distinguishing annualized revenue projections from realized annual revenue.
Key Arguments
- The host highlights reported revenue of $14.6 billion, net income of $4.4 billion and adjusted EPS of $0.35 as a major positive inflection.
- He emphasizes AI compute revenue growth and calculates approximately 61.9% gross margins for the segment.
- He adopts the compute expansion outlook as a major input to his investment thesis, while the underlying capacity and revenue forecasts remain operational claims rather than separate stock predictions.
- He describes current assets and liabilities as evidence of an exceptionally strong balance sheet.
- Starlink connectivity, mobile service and Grockbot adoption provide additional growth avenues.
- He sees ownership of SpaceX as insurance against a Tesla merger failing to happen.
Risks acknowledged
- Compute pricing could decline substantially.
- The host needs to sit down and check his valuation mathematics.
- Management's most ambitious compute expansion scenario is explicitly uncertain.
- A merger with Tesla is not guaranteed.
- The host initially confuses revenue run rate with annual revenue and subsequently corrects himself.
Predictions (7)
TSLATeslaThe host initially commits to holding Tesla until 2030 and continues to expect a breakout, but SpaceX's earnings make him reconsider a partial rotation. He favors a merger and will use Tesla's forthcoming earnings call to assess whether to trim his position.
Key Arguments
- The host holds more than 1,600 Tesla shares and initially reiterates his commitment not to sell until 2030.
- He maintains that Tesla will break out while seeing potentially faster investment upside in SpaceX.
- He believes Tesla's robots and AI capabilities make a combination strategically attractive.
- He considers selling 100 to 200 Tesla shares to fund SpaceX purchases.
- He views the formation of special committees as evidence a merger will eventually happen, although that corporate-event expectation is not itself a stock-price prediction.
Risks acknowledged
- The host postpones any personal sale decision until Tesla's next earnings call.
- Capital gains taxes discourage selling.
- He previously promised himself he would hold Tesla shares until 2030.
- Management says merger negotiations have not produced agreed terms and a transaction is not certain.
- Merger exchange ratios could disadvantage Tesla investors.
Hedges & Caveats
- The host repeatedly says he will wait for Tesla's next earnings call before deciding whether to sell any Tesla shares.
- He acknowledges that his valuation calculations need further work and corrects his interpretation of annual revenue run rate versus full-year revenue.
- SpaceX's prospective valuation depends on achieving the compute expansion and revenue assumptions discussed during the call.
- He considers lower compute pricing as an alternative scenario.
- Management says a merger is not certain, the special committees have not agreed on terms, and shareholder approval presents a substantial hurdle.
- Taxes and his prior commitment to hold Tesla until 2030 complicate his contemplated rotation.
- The recommendation to a viewer to trim Tesla includes 'Not financial advice'.
- The transcript contains no usable timestamps.