CNBC’s Jim Cramer said Tuesday that investors are flocking in. space x They are betting on Elon Musk’s ability to create innovative businesses, not his current earning power.
“This stock is called SpaceX, but it might be better called Elon Musk,” the “Mad Money” host said.
SpaceX has quickly become one of the world’s most valuable companies following Friday’s blockbuster IPO. Shares soared nearly 5% on Tuesday, putting the rocket company’s valuation above several large technology companies, including: Amazonand temporarily exceed microsoft. The rally reinforced questions about whether SpaceX’s roughly $2.5 trillion market value is justified.
But Kramer argued that traditional valuation methods miss what many investors are buying.
“There’s no way this company, which could be in the red for years, deserves such a high valuation on its own. It’s rated so high because Mr. Musk is running it,” he said.
Musk recently predicted that SpaceX could generate $1 trillion in annual revenue by 2030, but Cramer argued that the stock’s appeal goes far beyond any single prediction. Rather, he believes investors see value in Musk’s track record of building category-defining businesses and his ability to turn ambitious ideas into commercial opportunities.
“When you buy SpaceX here, you’re actually buying Elon Musk’s brain,” Cramer said. “I think mask worship is real.”
To support that view, Kramer pointed to the breadth of SpaceX’s business and growth efforts, including its Starlink satellite internet network, reusable rocket operations and long-term data center ambitions. Adding to this series of opportunities, SpaceX on Tuesday announced the acquisition of AI coding startup Cursor for $60 billion in stock, further strengthening its push into artificial intelligence and software development tools. The company is currently operating at a loss, and many of these opportunities have not yet been fully realized, but could ultimately become important drivers of future growth, Kramer said.
Cramer suggested that some investors view SpaceX the same way they viewed the previous generation. Berkshire Hathaway Under Warren Buffett – How to get in touch with business leaders who they believe can continue to create value for decades.
While skeptics still question the stock’s valuation, Cramer noted that so far it has been expensive to bet on the stock’s rise.
“While you’re sitting here trying to justify SpaceX’s valuation, buyers are relentlessly driving it up, and I’m sure they’ll continue to drive it up,” he said.
