we just published a deep dive reaction to the SpaceX earnings from yesterday. Specifically comparing results against street expectations and our mach33 internal model. you can see the full analysis here. A couple core things stand out on the financial side. First, wall street expectations beat across the board. I believe the cope is that consensus made it too easy for them to beat, but the fact remains. Second, our model, which is widely considered among the most bullish outside of spacex, was dramatically conservative on a few core things. AI Compute for sure, and enterprise mix for starlink as well. note: our Starlink numbers are the most bullish in our models, due to our conviction on the Starlink V3 inflection. This earnings call confirmed our annual revenue numbers but our enterprise/consumer mix was off, which suggests ARPU decline will be slower than we model. On the technical side which was my personal favorite, i found these to be the most compelling... V3 Sats going to operational orbit on Flight 14 - I was publicly wrong on this. assuming they'd do at least one more test. They are going for it sooner than expected. 1,000 Sats by Q2 2027 - this implies about a 1.7 flight per month average by that time. Our global bandwidth suggests they'd be aiming for 4,000 sats by EoY 2027 or 45 more flight in H2 2027. This might be on the bullish side. Better enterprise mix would compensate for a miss on this cadence. Mini-towers/Femtocell hardware - this is a big reveal and not enough people fully grok the implication. We've long hypothesized that their terminal/sat/gateway manufacturing machine would be well positioned to cover urban density gaps with a creative solution. Classic SpaceX first principles. This aligns with our modeling thesis particularly in the 2028-2030 growth curves. Starmind Co-designed NVL72 rack (both earth and space) aligns closely with our findings on co-designing models with hardware and potentially leveraging wideEP designs (Nvidia published work on this) to maximize token efficiency. This would be extreme co-design for inference. Eager to see more on this. This also pulls our orbital data center thesis forward, as a significant portion of our modeling suggested needing co-designed chips. This is co-designing a rack with off the shelf chips which will likely increase the revenue generation capability of the starmind rack, which is an ROI lever. So racks may cost more token for token than ground but the ROI will be break-even sooner, and learning rates and nimbyism will do the rest for the crossover. makes Starmind sats economically viable sooner. Grok 5 getting engineering data is going to play a role in model quality and ultimately the data bottleneck which we've modeled as something to be more concerned about in the 10T-20T parameter model era. All in all, i'm biased but this call was incredibly insight dense. I'm looking forward to the next one.

Grok 4.5 is looking like a success with help from Cursor data but underneath the surface we expect future Grok/Cursor model training is likely to speed up in the coming months. We've spent several months getting up to speed on the SpaceXAI business, especially the tech underneath it. The C rewrite was under appreciated by the investor community so we dug in to quantify its impact. including building a physics first model that functions as a stopwatch for the SpaceXAI model factory. Bottomline: C-rewrite gets SpaceXAI faster model cycles, leveraging 33% more tokens/second/GPU against SOTA competition resulting in the potential to shipping new models every ~3.5 weeks. two core learnings from this modeling exercise: 1: the training cycle speed up is primarily coming from RL (not pretraining) where the increased tokens/second/GPU advantage can shave up 2+ weeks off full model training cycle. 2: the rewrite itself should compound the time savings as model sizes grow. at ~2T shaving off 2-3 weeks, ~8 weeks at 6T, and 15 weeks at 10T. Note: a 20T parameter model likely runs into a data bottleneck prior to a training speed bottleneck but the directional advantage stands. Also we assume tokens/second/gpu advantage will melt over time as competitors try to match it. when you do the math, in true SpaceX and Elon fashion, it looks like they are attempting to build a SOTA model factory that can pump out bigger models faster than anyone else. Full analysis here for the public:

There has been a lot of hand wringing on the appropriate valuation of SpaceX. Some large institutions believe SpaceX can only be valued at half what the market seems to be willing to pay for it. Others are claiming it has 15X appreciation ahead of it. Almost all of this difference of opinion comes down to how comfortable you are modeling beyond 2030 and what valuation method you use. 2030 valuation using a traditional Gordan DCF produces a very different result than a 2040 EV/EBITDA Multiple. Both have pros and cons. Most analysts don’t really discuss this and lead with a headline number. We are very comfortable modeling out to 2040, as large portions of what SpaceX is proposing is real world infrastructure, which provides modelable physics constraints to anchor against. The analysis we released today explores this in-depth, its open to the public all the way through IPO. I highly encourage you check it out prior to then. We’ve run 5,000 monte carlo runs across 500 variables (real number, even though it sounds fake) and three valuation methods. This video is of a 3D cloud chart showing every simulation outcome expected in valuation output across two of the most impactful variables to the model when using an EV/EBITDA multiple from 2026 to 2040. The horizontal axis is the steepness of the orbital data center demand S-curve. The vertical axis is the rate at which chip compute efficiency becomes cheaper. Each of the 5,000 dots is one simulated future; green dots are the ones where SpaceX's 2040 value clears the $1.77T IPO line, over time. Under EV/EBITDA valuation through 2040, 96% of our simulated futures clear the expected IPO price once the bell rings Friday. We aren’t publishing this publicly to tell investors what the stock is worth, we’re publishing this to help investors understand the world of outcomes, what the fundamentals suggest through 2040, and what frankly most analysis simply won’t share. SpaceX is a generational company working on long term infrastructure harnessing a domain no one has been able to tap in so far: space. It deserves doing the work as an investor. because this in not financial advice. The cleanest way to hold SpaceX is a bond stapled to a call option (AI-Compute); Starlink is the bond, the near term SatCom annuity that funds the next flywheel. Understand the world of outcomes and take your position accordingly. Comparables and P/E won't take you far enough.