Time to buy SpaceX (SPCX)?

That’s what I told readers of my free investing newsletter on July 31, saying it was time to buy a little SpaceX stock. It looks like we pretty much nailed the bottom.

I got lucky with the timing. But if you missed the move off the bottom, don’t worry.

I believe SpaceX is an even better buy today. Elon Musk told us why on SpaceX’s first earnings call…

Forget data centers in space.

In fact, forget space, rockets, satellites, and everything else you associated SpaceX with.

The big opportunity is happening right here on Earth.

On its first earnings call, SpaceX revealed it invested $15 billion into artificial intelligence (AI) infrastructure last quarter. Through its acquisition of xAI, which makes “Grok” AI models, it’s building data centers on the ground.

Right now, AI companies are desperate for compute. Despite collectively spending more than $750 billion this year building AI data centers, Google (GOOGL)… Microsoft (MSFT)…** Amazon (AMZN)**… Meta Platforms (META) and others can’t keep up with AI demand.

Google is one of the world’s largest data center owners. Yet it’s forced to rent extra capacity from SpaceX. So too is Anthropic, the maker of my favorite AI, Claude. And they’re paying a huge premium for it because SpaceX is one of the few companies in the world that can build data centers fast.

SpaceX’s AI sales have more than tripled since last year. The contracts it's signed with Google and Anthropic are worth $26 billion a year.

A third, the Nvidia (NVDA)-backed startup Reflection AI, signed for up to $6.3 billion more. And it already has more than $80 billion worth of outside AI compute revenue contracted through 2029.

Elon said SpaceX’s AI revenue will surpass every other SpaceX business next month.

SpaceX is an AI company.

$300 billion…

That’s the low end of what Elon Musk says SpaceX could generate annually from AI compute by the end of 2027.

For some perspective, SpaceX generated $18.7 billion in revenue in 2025. We’re talking about a potential 16X surge in annual revenue in less than two years.

SpaceX plans to build at least 10 “gigawatts” (GW) of AI capacity over the next year. 10 GW is comparable to the electricity consumption of several million American homes.

They’re essentially building massive industrial warehouses and stuffing a combined 5+ million GPUs inside them.

Musk says each GW of AI compute brings in between in $30 billion and $50 billion a year. The agreements with Google and Anthropic fall within this range, so it’s not pie-in-the-sky math.

Why would anyone pay SpaceX $30 billion+ per gigawatt—3X to 4X the going rate?

One word: speed.

Building a giant data center takes years. You need land... GPUs... cooling... transformers… and above all, huge amounts of electricity.

That last step has become the killer. In many parts of America, connecting a big new data center to the grid means waiting in line for years.

SpaceX doesn't wait in line. It powers its sites with its own gas turbines.

It built a 750,000 sq. ft. data center in Memphis with 200,000 Nvidia chips… in 122 days. From bare warehouse to the world's most powerful supercomputer in four months!

Nvidia founder Jensen Huang said the job normally takes three years. For perspective, the average American home takes 234 days to build.

Now think about it from Anthropic's perspective. One gigawatt of compute can generate roughly $100 billion a year selling AI. If you save $20 billion waiting a year for cheaper compute, you lose $100 billion in sales.

Paying SpaceX's premium isn't reckless. It's the only math that works.

SpaceX isn't really selling compute. It's selling time. And right now, time is the most expensive thing in AI.

If (and it’s a big if) SpaceX can pull this off, it’ll be raking in $300 billion by the end of next year. Even if it hits 50% of that target, we’re still talking about a huge jump in revenues.

Which blows up the #1 concern I had about SpaceX stock originally…

SpaceX is... cheap?

At its current 80X sales, SpaceX is one of the most expensive stocks on the market.

But if sales explode, the multiple can shrink very quickly.

At $300 billion in annual revenue, today's $1.86 trillion valuation equals just over 6X sales. 6X sales for one of the most important companies in the world? I’m in.

What to do now.

If you haven't bought SpaceX yet, buy your first tranche today. The story got better and the stock is still 41% below its June high.

If you bought SpaceX on July 31: sit tight. This isn't the moment for the second tranche. (If you’re not already reading The Jolt, go here to sign up for free. I’ll let readers know when it’s time to add more.)

**And maybe… don’t forget space. **SpaceX filed with the FCC to eventually put a million compute satellites in orbit, powered by 24/7 sunlight. Maybe it works, maybe it doesn't.

But at today's price, the space business comes free.