Tuesday, 02 January 2024 12:17 GMT

Elon Musk's Pitching Spacex IPO At $1.78 Trillion Puts The AI Trade To The Test


(MENAFN- Investor Ideas) Investorideas ( newswir ) a go-to platform for big investing ideas, including AI and tech stocks, issues market commentary from deVere Group.

Elon Musk begins the SpaceX IPO roadshow today seeking up to $86 billion at a valuation of $1.78 trillion, in what could become the largest public offering ever, a deal that many investors increasingly view as a crucial test of confidence in the AI investment story.

A blockbuster SpaceX IPO would be widely seen as a vote of confidence in the AI trade.

A disappointing one would be interpreted as a warning on valuations, warns Nigel Green, CEO of global financial advisory giant deVere Group

Beyond rockets and satellite communications, SpaceX is presenting a long-term vision built around artificial intelligence infrastructure in orbit, the commercial development of space-based resources and eventually transporting people beyond Earth.

The proposed valuation would place SpaceX among the most valuable companies in the world despite the company remaining loss-making.

Investors are effectively being asked to look well beyond current earnings and focus on the potential scale of future opportunities across multiple industries.

The significance of the listing extends far beyond one company. A growing number of major AI businesses are preparing to access public markets or raise fresh capital as competition intensifies across the sector.

Tech companies continue to commit vast sums to AI infrastructure, computing power and research in pursuit of leadership positions.

He argues the opposite outcome would be equally significant.

Markets, explains the deVere chief executive, are approaching a period where valuation discipline is likely to become increasingly important.

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