00:00Also, space stocks are surging as SpaceX begins its IPO roadshow.
00:05The company conducted separately its 12th Starship flight test on Friday.
00:11But that is kind of a roadshow of sorts.
00:14Let's discuss a Bloomberg Tech co-host, Ed Ludlow.
00:17Ed, I'm sure that you were up Friday night watching this,
00:21what was, I guess, semi-successful launch of the Starship
00:26with the super-heavy V3 and Raptor 3 engines.
00:31What did you make of the attempt?
00:35Well, very right.
00:35I was up, and the millions that were watching us
00:38on Bloomberg Television special coverage were up, too.
00:41For SpaceX, data is success, right?
00:45And they'll always tell you that, that irrespective of the net outcome,
00:49the spacecraft itself splashed down in the Indian Ocean.
00:52The booster lost control but splashed down in pieces, I suppose,
00:57in the Gulf, all of that planned.
00:59But you're exactly right to frame it as part of the roadshow
01:02because we went through the S1 with such a fine tooth comb.
01:06None of the future that SpaceX outlines,
01:09be it orbital data center or humans going to Mars,
01:13or even in the more near term,
01:14a greater build-out of the Starlink network,
01:17none of that happens without Starship
01:19because it's the only vehicle, as SpaceX would tell it,
01:22that has the capability in terms of payload to orbit to deliver that.
01:27And so, you know, at some point,
01:29this is going to need to make some progress.
01:31And is there any real benefit to other space stocks,
01:34be it other rocket makers or satellites or anything,
01:37just by having SpaceX being public?
01:39Yeah.
01:40I mean, this happens, right, in the context of a big IPO,
01:44specifically if it's, like, very, very thematic.
01:46And so the trade we're seeing, you're showing Echo Star is now kind of flat,
01:50but other space stocks have been moving over a number of days
01:53since the S1 hit, is validation of a sector.
01:56It brings attention to space but basically says this is legit.
02:01And so that kind of feel-good continues to happen.
02:05One thing that, you know, we've covered at Bloomberg over a number of years
02:08is that there's been this ripple effect of SpaceX,
02:11particularly in Southern California.
02:12But when a big financial event like this happens,
02:16you know, other companies are kind of born out of it.
02:18There's a great network of startups that are run by SpaceX alumni.
02:22There will be great wealth creation for SpaceX staff
02:24that currently work there and may go and do something else.
02:27That all feeds into the market's attitude towards the sector,
02:31not just the name.
02:32Ed, I want to ask about Micron and the semiconductors
02:35that are driving markets today.
02:37I'm sure you'll be all over this on your program.
02:39I looked at the EE screen for earnings estimates
02:42and saw that it's still trading less than eight times
02:45the forward 12-month earnings estimates.
02:49We don't get earnings from Micron until I think the end of next month.
02:53But why don't investors just buy more if valuations remain that low?
02:59Yeah, you asked Empower's Martin Norton exactly the right question
03:03in the last block, which was about the multiple.
03:05And so like the catalyst, one of them in the moment right now,
03:08the reason Micron is up so much in the session is this UBS note
03:13raising the price target.
03:15But in discussion of that price target, what Timothy Acuri is arguing
03:19is that over time, the market will assign to Micron
03:23what he sees as a more normal multiple, right?
03:27As a result of what a total addressable market is,
03:30being in the enviable position that the thing that it produces,
03:34high bandwidth memory, but also just DRAM, generally speaking,
03:37is in so much demand that they can't keep up with it.
03:41You know, and the note, the whole point of raising the price target,
03:44but also where this firm sees the valuation is to finally kind of catch up with that.
03:51You mentioned total addressable market, and I realize we haven't talked about the SpaceX, Tam.
03:56What do you think, what kind of pushback do you think they're going to get
03:58for that on the road?
04:01You know, when you get into a room with serious bankers that do this for a living,
04:05and they flip to the page where it says $28 trillion total addressable market,
04:10they're going to be asking their Goldman Sachs colleagues, like,
04:12how did you come up with this number?
04:15Well, what's wild about it is $28.5 trillion.
04:18Only $2 trillion of that is Starlink, essentially, and the launch business.
04:24So $26.5 trillion is SpaceX telling the world that they think they can basically sell AI
04:31to enterprises, exactly as OpenAI, Anthropic, Google, hope to do.
04:36You know, it's $26.5 trillion of software opportunity that has nothing to do with rockets at all,
04:42other than they need the compute in orbit to facilitate it.
04:45So every IPO needs a good story.
04:48No one was surprised that there was a Tam number in there.
04:51I think that people were just surprised by the severity of the breakdown.
04:54If you had a bar chart, you know, the big AI bit sticks out,
04:58and everything else is hard to register.
05:00You don't even see it.
05:01And so it's time to, you know, as SpaceX would pitch you in the S1,
05:06stop thinking about them as a rocket company
05:08and start thinking about them as a software company.
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