00:00Bob O'Donnell is President and Chief Analyst at Tech Analysis Research.
00:04Joining us now, hello Bob, what an exciting day.
00:06But gosh, it took a while for trading to begin.
00:09What happened?
00:10Well, inevitably these processes take a while.
00:13I mean, we saw this with some other IPOs like Grok recently as well.
00:16You know, going through the process, especially one this closely watched.
00:20And again, people were fighting to get shares.
00:22So I think there was just a lot of work that had to be done to make sure that everything
00:26went off smoothly.
00:27It looks like it clearly did.
00:28And to no one's big surprise, it did boost up rather quickly after it officially started selling.
00:35Let's talk about Elon Musk because he's at the center of all of this.
00:38He's now the world's first trillionaire.
00:41I think it's fair to say that investors are betting on this man and his vision.
00:46How risky is it, though?
00:48You know, it's a very fair question, Sally.
00:50I mean, to be honest with you, I feel like so much of this is sort of around the cult
00:54of the Musk personality more than the companies.
00:57A lot of people who've done financial analysis, detailed looks at the prospectus for SpaceX have said, hey, look, you
01:04know, as you pointed out, only Starlink makes any money.
01:08The space side of the business is exciting.
01:10It's science fiction like, but it's based mostly on government contracts which don't grow rapidly.
01:15And XAI is losing a ton of money.
01:17So if you, you know, from a purely objective perspective, it doesn't make much sense.
01:22But it's that personality and that vision that Musk is throwing out there that I think people are buying into.
01:28The question is, will that really last long term?
01:30And I have, frankly, some doubts.
01:32Yeah, and I mean, if we look at what's happened with Tesla, his other massive venture, that's suffered a lot
01:38of setbacks, especially when he's head of Doge when he was in Trump's government.
01:43Lots of pushback, lots of boycotts of the cars.
01:46Do you think he's at the same risk around SpaceX or is it very different?
01:51It's a little bit different, but I still think some of those same issues are there.
01:55And that gets back to my comment about this personality cult kind of issue because, you know, he makes a
02:00lot of statements that upset a lot of people.
02:02And I think that is a concern.
02:04I mean, these businesses are a little bit different because not individuals don't go out and do space trips and,
02:09you know, they don't necessarily, they may use XAI tools, but that's really more of an enterprise story.
02:15Obviously, Starlink is the only area where it may be impacted the way that Tesla was because that's a direct
02:21consumer purchase.
02:22So we could see some of that, which would be unfortunate since it's the only thing that makes money.
02:26But, again, it is a little bit of a different animal, but there's still a lot of that baggage that
02:32I think inevitably comes with any Elon Musk venture.
02:36Let's look at the impact generally on the stock market.
02:39We have seen some sell-offs of AI stocks in the last few days.
02:42I would imagine as investors say, no, I want to get on the SpaceX rocket.
02:47What do you foresee going forward in terms of this environment?
02:52It's a great question.
02:53I think, you know, the AI infrastructure is going to go through peaks and valleys.
02:57I think inevitably there's a lot of questions out there.
02:59But fundamentally, you know, if you look at all NVIDIA and AMD and Intel and Qualcomm, all these companies that
03:06make the chips,
03:06as well as Micron and SK Hynix that make the memory and all these elements, they're sold out through 2027,
03:13for God's sake.
03:14So the fundamentals are there.
03:15But the big questions, as you brought up right before we started, Anthropic and OpenAI, what happens to those two?
03:22Because those two are really the linchpins in this whole AI business moving forward.
03:27Because right now we're building the infrastructure, the picks and shovels, as it were.
03:31But what about the actual services?
03:33When those two companies IPO and we see what happens there, that will give us a much better sense.
03:39All right.
03:40Thank you so much for speaking to us today.
03:42Bob O'Donnell is president and chief analyst at Tech Analysis Research.
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