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by Saline9515 18 days ago
Revenue is not a basis for valuation otherwise Walmart would be more valuable than Nvidia, Apple and Google combined. And I agree that SpaceX would be correctly valued at 180b.

Space TAM is not so large. Starlink ARPU is decreasing fast as well. And they rent the data center because Grok doesn't have enough usage, overall it's a bad usage of capital.
1 comments
wrsh07 18 days ago
> Revenue is not a basis for valuation otherwise Walmart would be more valuable than Nvidia, Apple and Google

This is a confused take

Revenue is an excellent basis for comparison of valuations if the growth rates are similar. Nvidia is worth what it is because of its vertical growth rate

If company A makes a 100U this year and I think it's going to double by the end of the year (to 200U) I would rather hold shares of that than company B which makes 150U per year and it's growing 10% yoy.

Next year I'll have a company making 200U, whereas B will only be making 165U. So I would pay more for A today than I would for B.

As an aside, Apple and Google sum to more revenue than Walmart and have better growth. So your claim was correct five years ago and the growth rates have literally shown you why Apple and Google have higher market caps

I haven't even gotten to explain the space TAM, but suffice to say black car tam was small before Uber. (What % of black car cabs did Uber provide in their first year offering the service)

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Saline9515 17 days ago
No you are missing the point. Walmart doesn't have the tech premium because Walmart has low margins, whereas Apple and Google have high ones. This is why unit economics matters.

Growth is important, but only if you can keep a high margin on the products you sell : it's not the case with Starlink (the main profitable activity), ARPU is down 23% yoy, at 66$ in 2026. Compare it to 99$ in 2023.

Last point, growth in market caps have diminishing returns, and it's obvious that it's easier to do a x100 if you start from 1b than 1750b. SpaceX runs the classic strategy of "high MC, low float" that has ruined many altcoins in crypto for the benefit of insiders who will want to sell to realize their gains.

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wrsh07 17 days ago
It's not a very good point. Yes, obviously margins matter. In tech and startups, growth tends to matter more (often because these are high margin businesses, but also because growth compounds)

Like, yes, Google has 55% margins to Walmart's 24% (and the operating margin gap is similar), but Google is also growing 17% to Walmart's 5%.

Google will _gladly_ take a hit to their margins as they emphasize Cloud revenue because that unlocks growth

SpaceX is leaving enough float, it doesn't matter, indexes are float adjusted anyways, I hate that I have to defend them against bad takes

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