Joe Lonsdale, co-founder of Palantir Technologies Inc. and managing partner at venture firm 8VC, has suggested that SpaceX's current valuation may appear expensive in the short term but could look "really cheap" in 5 to 10 years. Speaking on CNBC’s Squawk Box ahead of the company's Nasdaq debut, Lonsdale argued that concerns about SpaceX's valuation overlook the scale of the opportunity he sees ahead. He stated that the company is still in the early stages of determining its worth.

Lonsdale's thesis extends beyond rockets and satellite launches, positioning SpaceX as "a critical company in the middle of the biggest industrial revolution we’ve ever had." He encouraged investors to view the company through the lens of artificial intelligence infrastructure. According to Lonsdale, SpaceX is set up to be key AI infrastructure, with trillions of dollars being directed toward AI-related infrastructure in the coming years.

AI Infrastructure Investment

Lonsdale highlighted that approximately $5 trillion is expected to be invested in AI infrastructure over the next five years. He believes this spending wave aligns with Elon Musk's strengths, describing Musk as "the best at hardware in the world at a time when trillions of dollars are going into this area."

Confidence in Musk's Execution

Addressing skepticism from some investors regarding SpaceX's valuation and Musk's AI ambitions compared to rivals like OpenAI and Anthropic, Lonsdale expressed strong confidence. He said, "It's crazy to think he's not going to win," referring to Musk's positioning within the broader AI ecosystem. Lonsdale also pointed to Musk's track record of setting and achieving ambitious goals, noting, "He's the kind of guy who doesn't miss his goals."

Long-Term Perspective

Lonsdale declined to predict SpaceX's share performance in the immediate trading period, stating, "I'm not a short-term trader. I can't tell you what happens in the near term." However, he emphasized that investors focused on near-term valuation metrics may be missing a generational infrastructure story. For investors willing to think in decades rather than quarters, Lonsdale believes today's valuation debate may eventually seem insignificant.

SpaceX is set to begin trading on the Nasdaq this Friday, pricing 555.6 million Class A shares at a fixed $135 each. The raise of $75 billion would dwarf Saudi Aramco’s 2019 record and land SpaceX at a roughly $1.77 trillion implied valuation, creating a dynamic of promise and peril for investors. This valuation puts SpaceX ahead of the combined market capitalization of all 12 aerospace and defense companies listed on the S&P 500 index, including RTX Corp, Boeing Co., Northrop Grumman Corp, and GE Aerospace, which collectively total approximately $1.5 trillion.

Sector Comparison and Revenue

While the valuation of SpaceX significantly outpaces the established aerospace sector, the revenue figures tell a different story. The 12 S&P 500 aerospace companies generated approximately $500 billion in revenue, which is well over SpaceX’s reported revenue of $18.7 billion before the IPO. Goldman Sachs Group Inc., the lead underwriter for the offering, reportedly shared with prospective investors that the company's total revenue could reach over $474 billion by 2030.

Analyst Sentiments and Projections

Industry analysts have expressed bullish sentiments about the IPO. Deepwater Asset Management’s Gene Munster called the IPO an exciting event for the tech industry, suggesting SpaceX could emerge as a rival for Alphabet Inc. Investor Ron Baron predicted the Elon Musk-led company could become worth $30 trillion in the future. However, not everyone is bullish; NYU Stern Professor Aswath Damodaran stated he would avoid participating in the IPO, citing concerns with SpaceX’s valuation and its $28.5 trillion market opportunity.

Governance and Market Risks

Top pension officials from New York and California have criticized SpaceX’s IPO, accusing Musk of creating a management-favorable structure. SpaceX will incorporate a dual-class share structure, with Musk's Class B shares each worth 10 regular shares, holding significant voting power. Meanwhile, Tesla, Inc. shares dropped about 1.5% Tuesday morning as investors attempt to price in the arrival of Musk’s second trillion-dollar public company. NYU professor Scott Galloway warned that upcoming AI IPOs could trigger market collapses, noting that capital rotation demands from SpaceX, Anthropic, OpenAI, and Alphabet Inc could reach $400 billion.