SpaceX Is No Longer a Rocket Company... Here's What Elon Is Building

Your Daily Market Update in 10 minutes. My name is Zayd Admani and today is Wednesday, August 5th. In today's episode, I'll tell you why I think the AI trade is making a huge comeback right now. I'll also get into SpaceX's very first earnings report as a public company and why AMD stocks sold off despite a strong quarter. Then stick around to the end of the show to find out why Myspace is trying to make a comeback. We got a great show for you today. Let's go. We are so back baby. Stocks kept ripping higher on Tuesday with the S&P 500 jumping 1.8% and hitting a record high for the first time since early June. The Nasdaq did even better, jumping 2.6% as investors jumped back into the tech and AI trade. You know, it's kind of crazy how fast the market has jumped back into tech stocks. Literally a week ago, the market was questioning whether the AI trade was over and now everything is just ripping. The Nasdaq has jumped 9.3% in just four trading days, adding roughly $3.5 trillion in market value. And it's not just the mega cap names driving this rally. Semiconductor stocks and software companies and cloud infrastructure companies, almost everything tied to the AI trade is moving higher again. You know, I think the strong cloud growth reported by Google, Microsoft, and Amazon in their earnings over the last couple of weeks proved to the market that all this spending on data centers is starting to pay off, that these companies are probably not going to stop spending anytime soon. So I think that's giving investors confidence to jump back into the trade. And I also think this AI hedge fund situational awareness blowing up might have played a factor as well. Now, looking ahead, we have a ton of earnings to get through, a lot of which we cover on today's show. And then on Friday, the July jobs report drops, which could impact what the Fed does with interest rates moving forward. So we're going to be staying on top of all of it. If you're new here, definitely get subscribed to the podcast if you haven't already and tune in every day to stay in the loop. Let's run through some headlines, starting with SpaceX. SpaceX reported earnings last night, the first time as a public company, and the numbers were impressive, but the stock is still falling because of some red flags. Let's start with the numbers first. Revenues nearly doubled from a year ago to $7.8 billion, easily beating the $6.8 billion that Wall Street was expecting. And when you dig into each segment, they beat across the board. I'm talking Starlink, Rockets, AI, all of them came in higher than expected. Now, the company is still losing money. They reported a loss of $541 million, but that is narrower than the $1 billion the company lost in Q2 of last year. But I think the big concern that investors were focused on was the spending. SpaceX said they spent $18.4 billion on CapEx during Q2, and $15.8 billion of that went towards AI. This CapEx spending has more than doubled from the previous quarter because SpaceX continues to build massive data centers, develop their own AI models, and also work towards eventually putting data centers in space. The company claims that all this spending is paying off because SpaceX has signed major cloud computing deals with Google and Anthropic. In fact, executives say the company is getting a payback period of less than one year on some of these AI investments. But still, the market was spooked by all the AI spending, and SpaceX stock is down more than 10% this morning in reaction to the earnings. Now, this being an Elon Musk company, Elon was doing Elon things on the earnings call, making some bold promises as he usually does. At one point on the call, he said that SpaceX could generate $1 trillion in annual revenue by 2030. Just for some context here, Wall Street currently expects SpaceX to make around $39 billion in revenue for this year. So making a trillion dollars in revenue by 2030 seems very, very unlikely. Now, what's interesting is that usually when Elon makes big claims like that, the market eats it up. But that wasn't the case this time. Like I said, SpaceX stock is down big following the earnings report. You know, my take on the situation is that SpaceX earnings were solid. They're showing solid growth across the board, and they are somewhat justifying their CapEx spending. The problem for SpaceX is their valuation. They're still valued at more than $1.5 trillion, and a lot has to go right for the company to justify that valuation. And then the other concern when it comes to the stock is that a lockup period is ending for $100 billion worth of SpaceX stock on Friday. That's going to double the amount of tradable shares for SpaceX, and the concern is that we're going to have a ton of insiders dumping their stock. And I think that's a big reason why the stock continues to tank. I'm just thinking back to the conversation that I had with Nicholas Owens on the podcast back in June right after SpaceX's IPO. Nicholas is an equity analyst from Morningstar, and he made the case that SpaceX was worth around $63 a share. Now, when we recorded that conversation, SpaceX was trading north of $200 a share. These days, the stock is around $100 a share. And I wouldn't be surprised if we hit the $60 to $70 range at some point this year. Let's shift gears and talk about AMD, because the chipmaker also reported earnings last night, and the numbers were solid, yet the stock is getting smoked this morning. AMD's revenue jumped 50% from a year ago to $11.5 billion. That slightly beat Wall Street estimates, and adjusted earnings came in at $1.66 per share, also beating expectations. And as you can expect, the big growth engine was the data center business. Data center revenue more than doubled to a record $6.7 billion. The data center business now makes up 58% of AMD's total revenue. A year ago, it was 42%. But despite the beat on earnings, the stock is taking a hit today. It's down more than 8% this morning at the time of this recording. One of the issues with the earnings was the company's guidance. AMD said they expect to make about $13 billion in revenue this current quarter. Now, that was technically above the estimates of $12.5 billion, but the Whisper estimate was as high as $14 billion. The thing is, when your stock has more than doubled this year, beating the estimates isn't enough. You have to beat the Whisper number. It's just one of those weird things about Wall Street. And AMD's stock might have been impacted by SpaceX's earnings call, which was happening at the same time as the AMD earnings call. In the SpaceX call, Elon Musk said that SpaceX plans to build their AI infrastructure exclusively with NVIDIA's Blackwell chips. Now, just a few months ago, Elon said that SpaceX and Tesla would keep buying chips from both NVIDIA and AMD. But now he seems to be going exclusive with NVIDIA, and that has to be a bit of a gut punch to AMD. But if you zoom out, though, I feel like this was a pretty solid quarter for AMD. And they have a promising product combo of GPUs and CPUs, which are both in high demand right now because of the AI boom. Not to mention their next-gen Helios AI server racks are expected to begin shipping this quarter to big-name clients like Meta, OpenAI, and Microsoft. This Helios system combines AMD's GPUs, CPUs, and networking into one complete rack-scale system designed to compete directly with NVIDIA. So yeah, I think AMD continues to make a big push for being a strong alternative to NVIDIA in the AI chip space. Let's talk about some stocks making moves today. Shopify is having an absolute monster morning after the e-commerce software company delivered a big quarter. Q2 revenues were up 34% to $3.58 billion, beating estimates, and net income surged to $1.5 billion compared with $906 million last year. And overall, total merchandise sold across the Shopify platform hit $115 billion, which was up from the $88 billion last year. Shopify continues to grow their platform. What's funny about Shopify is that investors were worried that AI would actually hurt the company. There was an argument floating around earlier this year that AI shopping assistants would bypass Shopify stores. That's one reason why Shopify stock was down 20% this year heading into this earnings report. But Shopify is clearly showing that AI is not having a negative impact on their business. In fact, the company is leaning heavily into AI tools, which is helping them with growth. And the company is not expecting growth to slow down. They expect revenues in the current quarter to grow in the low 30% range, which came in ahead of Wall Street estimates. So the market seems to be buying back into Shopify. Their stock is up more than 20% this morning following the earnings report. Now, on the flip side, Uber stock is sliding this morning after their earnings report, and the report itself was fine. Revenues increased 12% year over year to $14.2 billion, and adjusted earnings came in at $0.81 per share. Both those metrics pretty much matching expectations. And gross bookings across their platform hit $58 billion. That beat estimates. The problem for Uber, though, was the future outlook was a bit underwhelming. On top of that, the company says their trip growth was hurt by increased competition in Brazil, which is their biggest market by volume. Chinese companies like Didi are aggressively investing in Brazil right now, which is hurting Uber's market share in the country. And then there's also like big picture concerns about the impact that robo taxis could have on Uber's growth down the line. At first, these robo taxi companies like Waymo were partnering with Uber when they launched into a new city. But these days, Waymo and also Amazon Zooks are launching in new cities without Uber's partnership. So Uber is stuck in a weird spot right now. The business today is actually pretty strong, but there are a ton of questions about the future of the company with the rise of robo taxis. Uber stock is down around 3% this morning at the time of this recording. And if you zoom out, the stock has lost around 13% this year. Let's wrap the show with a fun fact. Myspace is planning a comeback. The current owners of the old school social media website are brothers Tim and Chris Vanderhoof, and they announced in a new documentary that they're planning to relaunch the platform. Their pitch is to build something that feels different from today's social media. So no algorithms force feeding you content, no endless doom scrolling. Basically the way social media worked back in 2006. Now there's no launch date on this new Myspace, but it's supposed to happen at some point. I'll be honest with you guys. This is not gonna work, okay? I feel like I hear about a Myspace comeback every few years and it ends up going nowhere. And the thing is, even if they do end up relaunching it, it's gonna be hard to make a dent out of the Facebooks, Instagrams, and TikToks of the world. These existing social media platforms are just so massive now with billions of users. And I don't think that people want another social media platform to be on. So if Myspace does end up relaunching, they might get a temporary bump from the nostalgia, but I don't think it's gonna be a long-term thing. I could be wrong though. Let me know in the comments on what you guys think. Would you sign up for Myspace and actually use it if it comes back? And I guess a better question is, do you really want social media to work like it did back in 2006? Personally, I don't wanna deal with top eight drama in my mid thirties. All my millennials out there listening know what I'm talking about. Well, all right guys, that's the rundown for today. Hope you guys enjoyed today's episode. Thank you guys so much for listening, watching, and commenting. Shout out to Vee and Kevin for all the work behind the scenes. And we'll see you guys back here tomorrow.