SpaceX Goes Public Tomorrow — Look Out Below

Ed Elson is joined by Gil Luria to discuss what the blockbuster SpaceX IPO means for markets. Then, Mark Zandi breaks down the hottest inflation print in three years. Later, Alex Heath unpacks the biggest announcements from Apple's WWDC and why investors were underwhelmed. Finally, Ed shares his final message to listeners ahead of the SpaceX IPO. Gil Luria is the Head of Technology Research at D. A. Davidson. Mark Zandi is the Chief Economist at Moody’s Analytics. Alex Heath is the author of the sources newsletter and co-host of the Access podcast. Subscribe to the Prof G Markets Youtube Channel Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [email protected] Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Running a small business means I wear lots of hats. When I put on my hiring hat, I can count on LinkedIn Hiring Pro to make it easy. LinkedIn Hiring Pro helps manage my hiring workflow, puts my job post in front of a unique network of professionals, and matches me with the best candidates for my business. I can also share my job with my network. No other job site lets me do that. No wonder most small businesses say they'd use LinkedIn Hiring Pro again. Hire right the first time. Post your job for free on LinkedIn today at LinkedIn.com/quality.

• 0:31Speaker 01

  Low energy, unfocused, foggy? You might be dehydrated. Gatorade Zero Powders have been scientifically designed to help improve hydration balance in the body. With a clinically proven electrolyte blend and no artificial colors or flavors, great tasting hydration no matter where you're going. Shop now online or at retailers nationwide. Gatorade: Hydrates Better Than Water. Is it in you? Symptoms noted are signs of mild to moderate dehydration. Consult a healthcare professional if symptoms persist.

• 1:00Speaker 02

  Welcome to Sephora.

• 1:01Speaker 03

  I'm looking for a perfume that's not too perfumey?

• 1:06Speaker 02

  I got you.

• 1:06Speaker 04

  Serum moisturizer, or moisturizer syrup.

• 1:10Speaker 02

  Let's get into layering.

• 1:11Speaker 03

  My concealer is making me look worse?

• 1:14Speaker 02

  Sounds like the wrong shade. Let's get you matched.

• 1:18Speaker 05

  There's only one store that really gets what you're going for. Get beauty from people who get beauty. Only at Sephora.

• 1:25Speaker 06

  Hi, I, uh...

• 1:27Speaker 02

  Let's get you a basket.

• 1:35Speaker 07

  If money is evil, then that building is hell.

• 1:44Ed Elson?

  Welcome to Prof G Markets. I'm Ed Elson. It is June 11th. Let's check in on yesterday's market vitals. The major indices all tumbled more than 1.5% after President Trump expressed frustration that negotiations with Iran were taking too long. The S&P 500 hit a five-week low, and then, after hours, the US began striking multiple targets in Iran, at which point, the price of Brent crude climbed. Meanwhile, the yield on 10-year Treasuries was mostly stable, despite the hottest inflation report in three years. More on that later.

• 2:22Ed Elson?

  Okay, what else is happening? It is a monumental week for the AI industry. SpaceX is expected to price tonight and will begin trading on the NASDAQ tomorrow in what will be the largest IPO of all time. Currently, shares for SpaceX are more than four times oversubscribed, implying at least $300 billion in investor demand. Meanwhile, OpenAI filed confidentially for its IPO earlier this week, hot on the tail of Anthropic. So very soon, the public markets are going to get an unprecedented look into the business of AI. In the meantime, we got a preview of investor sentiment on AI from Oracle's earnings last night, which sent the stock plummeting 8%.

• 3:05Ed Elson?

  For more on what is next for the AI trade and also his thoughts on the SpaceX IPO, we are speaking with Gil Luria, Head of Technology Research at DA Davidson. Gil, it's good to see you. An unbelievably important week for the markets here, and I think we've got to start with SpaceX. $1.77 trillion valuation, it's priced at 95 times sales. I've made my opinion on the matter, quite known to our audience. I think it's overvalued, but I'd love to hear your views.

• 3:38Gil Luria?

  My view is going to be more descriptive than prescriptive. I've been following Elon Musk companies for more than a decade, and they rarely trade on fundamentals. They rarely trade on the same valuation metrics as other companies. And I've thought about why that is, and I think the answer is that Elon has this trick that he plays. He has the business that he has today, the business that's on the come, and then the big dream business. So for Tesla, the business he has today is selling cars, the business that's on the come is robot taxi, and then somewhere down the line, there's Optimus Robots running around. The equivalence for SpaceX is, right now, we have Starlink, soon we'll have orbital

• 4:23Gil Luria?

  data centers, and then eventually, we're putting a million people on Mars. And that allows him to get away from having his companies valued on the fundamentals of what he has today, because there's always something bigger coming near term, and then something even bigger coming long term. And that's how he does it with Tesla, and he's been successful doing it with Tesla for a long time, and now it seems to be working for SpaceX. Having said all that, I think it's great that you're cautioning people ahead of tomorrow. Buy or beware.

• 4:58Ed Elson?

  I'm skeptical how many people will actually believe in that story. And the putting people on Mars, I mean, it's one thing to say, we're going to put these humanoid robots into the world, which by the way, at least they've, they've shown some models of how it would look. But putting people on Mars, to me, there's a, it starts to go from optimism to delusion. And I'm skeptical of how many people actually believe this thing is actually going to happen. And I guess my thought is that we're going to see a lot of selling activity, at least when these lockups start to expire. So how do you think the stock will trade over the course of the day and I guess in, in the, in the next weeks and months as well?

• 5:42Gil Luria?

  I think it'll be very volatile, and I think that's going to add a lot of volatility to the market. Because when you don't have a valuation backdrop, when you don't have comparables, then to your point, it can trade at 95 times revenue, it can trade at 50 times, it can trade at 150 times. There's no rhyme or reason. It really is about how many people buy into that vision and continue to hold on to that vision. And there's the excitement that we're going to have tomorrow, there's going to be the lockups, very significant lockups after that, there's going to be index inclusions, there's going to be index non-inclusions. We're, I should, we would should expect more volatility in this stock than anything we've seen in a stock of this size.

• 6:25Gil Luria?

  And again, it's going to also have a big impact on the market. It already has. We've seen a lot of capital taken out of a lot of other technology stocks, a lot of the, the rest of the AI trade in order to fund this. Because if they're issuing 75 billion and it's four times over subscribe, that means investors have $300 billion ready to invest. They're not going to get their full allocation, but they have to have it in cash, just in case they do. So a lot of capital's already been pulled out of the market, and we're going to have to see what happens in order to perpetuate this.

• 7:00Ed Elson?

  Plus, you've got OpenAI coming up, you've got Anthropic coming up, you've got Google's $85 billion equity offering, you've got Meta supposedly considering a similar thing, you've got Oracle, which we could get into, which just announced a $20 billion equity offering, I believe, $20 billion in debt as well. It's starting to get to the point where there is so much stock being issued into the markets, injected into the markets. I'm not totally sure if people even have the money to buy all of this stuff. And if they don't, then they're going to have to sell their existing positions. It sounds like you believe that that is what is already happening and that might describe

• 7:43Ed Elson?

  why we've seen some of the drawdowns in some of the larger tech names over the past few days. Is that what's going to happen and do you think it could get, I guess, worse?

• 7:52Gil Luria?

  Yeah, there's going to be a lot of sloshing around of capital. And the reason is, part of the reason, and this is going to happen even more so when OpenAI and Anthropic go public, because SpaceX is bigger than AI, right? It's about space exploration and expanding consciousness into the stars, a literal quote from the S1. But OpenAI and Anthropic are the pure plays on AI, the big pure plays on AI. So if so far in the market, you've invested every other way in AI, by buying semis and optical and nuclear and quantum and all these other ways to invest indirectly in AI, now you're going to get a chance to invest directly in AI. And so, again, a lot of capital is going to be pulled from the rest of the AI trade

• 8:35Gil Luria?

  into OpenAI and Anthropic. And part of this is a race, because you mentioned the mega caps are going to the capital markets, these three IPOs are happening. This is, each of them wants tens of billions, maybe even $100 billion to raise. There's a finite amount of capital that can come out of everything else. And so to some extent, this is a race. I think when we heard OpenAI, what OpenAI said when they filed confidentially is we'd rather stay private, but we understand that we may need to go public, which is code for we may need to beat Anthropic out, or at least be sued after Anthropic, because we don't want them to drive a narrative, to drive how disclosures happen, what metrics get reported.

• 9:19Gil Luria?

  So a rush to capital right now from all these big players.

• 9:23Ed Elson?

  Which implies something which seems to me to be quite important, which is if they're racing to sell now, that's because they believe if they sell later, there will be less available capital and they won't be able to to command the prices at which they would like to sell today. So SpaceX seems to have timed it great, but the further you go down the line, then it seems like these CEOs like Sam Altman believe there might not be as much capital available later down the line, which makes me feel a little bit bearish, to be honest. It makes me think that maybe we're at the top, they think that now is the time to sell, clearly, because that's what they're doing. It makes me think maybe

• 10:07Ed Elson?

  look out below. What do you think about that thesis that potentially this IPO race, this IPO mania could signal the top at least for the tech sector?

• 10:17Gil Luria?

  I'm a little bit more optimistic from the overall perspective, because I actually think the AI models are very powerful and they're getting a lot better. The folks that have been using Fable from Anthropic over the last couple days are saying that's another big leap forward. And we're already getting a lot of good usage from the other AI models. And at the end of the day, this is what matters. Are consumers going to pay subscriptions for AI? Are companies going to pay for the tokens coming from these AI models? As long as that happens, we're going to continue to see growth. What these companies are doing, they're racing to capital. It's not necessarily that they're saying that their valuations are peaking. They're saying, what you said earlier, which is, if I don't get the capital

• 10:59Gil Luria?

  now, it may not be around later, because everybody else will have stood in line first. This is a game of kings and queens. You can't participate in AI without tens of billions and hundreds of billions of dollars. And if you think that the capital is going to run out at some point, you want to be early. By the way, also compliments to Google for for being early with the very big fundraise this week. And again, I wouldn't expect Amazon and Microsoft to linger in the background. They understand this is a race. They understand that they're starting to exhaust their operating cash flow, and they will need resources in order to keep building the AI compute data centers.

• 11:37Ed Elson?

  Final question and then we'll let you go. And I don't know if you're going to answer it because you didn't quite answer it before. Do you think SpaceX is overvalued or undervalued?

• 11:45Gil Luria?

  I try not to do that with Elon companies because I don't think their valuation has ever made sense. It's never been had anything to do with fundamentals. So if people are buying a dream and a story and hope and and sometimes that works out. It sure didn't work out for Tesla holders that bought the stock 15 years ago.

• 12:05Ed Elson?

  It did indeed. All right. Gil Luria, head of technology research at DA Davidson. Gil, thank you so much. Appreciate your time.

• 12:11Gil Luria?

  Thank you.

• 12:21Ed Elson?

  Inflation rose 4.2% in May from a year earlier, the hottest reading in three years. Fuel oil is up nearly 60% from a year earlier and airfare is up 27%. And for the second straight month, real wages fell, meaning prices are rising faster than paychecks. The report has investors rethinking the Fed's path ahead. The odds of a rate hike before the end of the year are now around 50% on Calci. Joining us to discuss this inflation report, we are speaking with our friend Mark Zandi, chief economist at Moody's Analytics. Mark, thank you for joining me on the show. It's always good to see you. I guess my first question

• 13:04Ed Elson?

  here, 4.2%, I mean, this number is staggering to me. Seems like it's all Iran. Is that right?

• 13:13Mark Zandi?

  Ed, good to be with you. No, it's more than Iran. I mean, obviously Iran's a big part of it. The bulk of the inflation acceleration is energy prices. But it goes to the tariffs. There's still some tariff pass through. It goes to the restrictive immigration policy, Having an impact on different industries and causing sticky service price inflation. And also AI, artificial intelligence, the AI is juicing up demand, you know, of the data center infrastructure build out, consumer spending because of the wealth effects. But it's not lifting supply, at least not yet to any significant degree. The productivity boost so far has been pretty small. So more demand, not as much supply, that adds to inflation. You can see in electricity prices, you can see it in chip prices.

• 13:57Mark Zandi?

  So there's a lot of stuff going on here. Inflation is up for a lot of different reasons, but the bulk of it is the Iran war.

• 14:04Ed Elson?

  I guess the next question is, how long is this going to last? I mean, it's been going up and up and up. If we stick around at 4.2%, I mean, we're over two percentage points above the Fed's target rate. This problem only seems to be getting worse, and I think the question on investors' minds is, how long is this going to persist?

• 14:27Mark Zandi?

  Well, it does depend on the war, right? I mean, if the war is kind of close to peaking, winding down here, and oil prices are not going any higher, they're going to be around a hundred bucks a barrel if that's where they stay, come in a little bit, then the worst of the inflation is behind us. But, you know, there's no going back to the kind of 2% inflation rate that the Fed would consider to be appropriate, you know, comfortable for a long time. I mean, when I say a long time, Ed, we'll be talking a year from now, inflation will still be above target, maybe two years from now, even if everything sticks to script, including the Iran war winding down. So this is, you know, we may be past the worst of it, but we're not getting back to where we were anytime soon.

• 15:09Ed Elson?

  Do you think it will get worse? This is the thing that I'm not sure what to expect. I mean, we saw back in 22, we saw a similar thing of inflation kind of ripped back up. It went as high as 8%, 9%, it got really bad. I mean, how much worse do you expect it will get in this round of inflation?

• 15:28Mark Zandi?

  Well, I do expect the president to come to terms with the Iranians and open up the Strait and get production, oil production ramping up back up again and oil prices moving south again. So I think that's the most likely scenario, but as you, you know, were alluding to, there's a gazillion different scenarios here, and almost all of them are worse than the baseline, you know, inflation being higher for longer. The one thing I do think that we need to watch, though, to answer your question, is inflation expectations. I mean, if... Expectations continue to, for inflation continue to rise, particularly bond market expectations, then the risk is that this inflation becomes more persistent, more entrenched, and obviously has big implications for what the Fed's going to do. So, so far, the inflation

• 16:11Mark Zandi?

  expectations, they're on the high side of where I think the Fed would feel comfortable, but they haven't kind of breached, you know, up to the upside. But that's something to watch, to answer your question.

• 16:20Ed Elson?

  Just to gain theory this out, like, let's imagine a world where Trump does not figure out how to negotiate with Iran, the strait remains closed, or the situation persists as it is. It's hard to tell whether it's closed or open, or who's blockading what. Point is, it's not going great over there. That's all we know. If it remains as is, call it for the next six, nine, 12 months, does the number get worse and worse and worse? Or do you expect that it will plateau at some point?

• 16:55Mark Zandi?

  No, that's a pretty ugly scenario, because we're running out of inventories. I mean, you know, global inventories of oil have been being significantly drawn down. I think you have to go back to the early 80s to find inventories as low as they are today. And compared to the size of the economy, you have to go back even further. So there's just no inventory. And if we don't see a resolution to the war, if the strait doesn't open, if production doesn't pick up, those inventories are going to get to a place where we're going to start seeing actual shortages, physical shortages. Maybe not in the United States, because we produce a lot of oil, produce as much oil as we consume, but in other parts of the world. And I think at that point, traders and everyone else would come to the conclusion that, well, this isn't going to come to a quick end. You know, we got a problem here. We need much higher oil prices to equate demand with the reduced

• 17:39Mark Zandi?

  supply. And that means much higher prices, and that means much higher inflation. And that's a scenario where you do get inflation expectations, you know, breaching the upper limits of what the Fed would feel comfortable with. And that's a pretty dark scenario. But... Clearly, the scenario with a meaningful probability attached to it.

• 17:56Ed Elson?

  In other words, it sounds like almost all of this rests on Trump's ability to negotiate a deal with Iran. It sounds like you are somewhat confident that he will pull that off in the near to medium term. I guess my question is, why do you feel that way?

• 18:13Mark Zandi?

  Well, you know, the president, you know, whatever you think of him, the one thing you can say is that, you know, he, if things aren't working out in the way he wants them to, he'll pivot 180 degrees, declare victory and move on. At least that's been what he's done so far. So I'm applying the same kind of logic to my thinking around what he's going to do here. He's desperately, obviously, trying to figure out a way to wind this thing down, declare victory and move on. So hopefully he finds that sooner rather than later. Otherwise, we're going to be in a boatload of hurt. And, you know, that, the scenario where he doesn't come to terms in the next few weeks, next month or so, you know, that's, that's the recession scenario, stagflation recession scenario.

• 18:54Ed Elson?

  I personally don't feel so optimistic about it, but part of it is something, some of the things that he said about he's not worried about it. And then he also said this thing about inflation yesterday. We have a clip of what he said. He was asked about this inflation report. I'm just going to play this clip and I'd love to get your reactions.

• 19:12Speaker 11

  No, I love it. The numbers were great. You know what I really love? I love the inflation. You know why? Because as soon as this war is over, you know, I can say it now, something you didn't know. Do you know we've been taking out millions of barrels of oil? Nobody knows it. You know who doesn't know about it? Iran until right now.

• 19:33Ed Elson?

  So Trump says he loves inflation because they're taking barrels out? I don't fully understand what he's saying. Is there any way to make sense of what he's saying?

• 19:43Mark Zandi?

  Uh, if you can make sense of it, and I don't think I could, but I certainly can't. I'm not sure what he's talking about. I mean, I don't know. There's nothing worse than inflation on every level. I mean, you know, it's, it's bad for consumers, bad for households, it's bad for businesses, it's, it's bad for investors, it's, it's bad for the Federal Reserve Board. It's a lose, lose, lose, lose. So I don't know. I don't get it. But I'm not sure. I don't know that I attach a whole lot of weight to that and, you know, and say that that's what he actually believes. You know, I'm not sure that's the case.

• 20:18Ed Elson?

  Okay. Mark Zandi, chief economist at Moody's Analytics. Mark, thank you for joining us on Prof G Markets.

• 20:24Mark Zandi?

  Anytime, Ed. Thanks so much.

• 20:28Ed Elson?

  After the break, Apple's AI strategy disappoints again. And for even more markets insights, you can subscribe to my weekly newsletter. Simply put at simplyput.profgmedia.com.

• 20:46Speaker 12

  The new LinkedIn Hiring Pro can't undo your last hire. The human postponer. They were the master of one phrase. I'll circle back on that. But three months later, you were the one doing all their work and wondering how big that circle is. But LinkedIn Hiring Pro can take the hiring load off your plate by automating the hiring busy work from the initial job post to scheduling interviews. Hire right the first time with LinkedIn Hiring Pro. Post a free job today at LinkedIn.com/quality.

• 21:16Speaker 13

  Energía baja. Falta de concentración. Nebla mental. You might be dehydrated. Gatorade Zero Powders han sido diseñados científicamente para ayudarte a mejorar el balance de hidratación en el cuerpo. Hechos con la mezcla número uno de electrolitos, sin colores ni sabores artificiales. Shop now online or at retailers nationwide. Gatorade hydrates better than water. Is it in you? Signos de dehidratación leve y moderada. Consulta a tu médico si los síndomas persisten.

• 21:46Speaker 03

  Welcome to Sephora. I'm looking for a perfume that's not too perfumey.

• 21:51Speaker 02

  I got you.

• 21:52Speaker 04

  Serum moisturizer or moisturizer serum.

• 21:55Speaker 02

  Let's get into layering. My concealer is making me look worse. Sounds like the wrong shade. Let's get you matched.

• 22:04Speaker 05

  There's only one store that really gets what you're going for. Get beauty from people who get beauty. Only at Sephora.

• 22:11Speaker 06

  Hi, I.

• 22:12Speaker 02

  Let's get you a basket.

• 22:21Ed Elson?

  We're back with Prof G Markets. Apple has finally shown up to the AI race, but it might be too little, too late. At its Worldwide Developers Conference on Monday, the company unveiled Siri AI. The updated assistant will be powered by Google's Gemini. However, Siri AI has no firm release date, and it won't be available in the EU or in China when it launches. Apple stock hit a record high during the keynote address on Monday, but it quickly reversed course, and since then, shares have shed more than 7%. So we're here to help us break down Siri AI and what it means for investors. We're speaking with Alex Heath, author of the Sources Newsletter and co-host of the Access Podcast,

• 23:04Ed Elson?

  and Alex has been at the Worldwide Developers Conference. Alex, good to see you. The thing that jumps out to me here is the fact that Apple comes out with this AI product. It was supposed to be exciting. It was supposed to inspire confidence in investors, and the stock has shed more than 7% of its value. So we'll get into that. But what did we learn at this conference, and what do we know about Siri AI?

• 23:31Alex Heath?

  I don't know. I'm not an expert on this. Maybe the reason for the sell-off is that this is kind of what they showed off two years ago. If folks remember, they had this glitzy marketing push around what Siri was going to be. There were a bunch of TV commercials. They even got sued over false advertising around this, I believe, and they never shipped it. And I think what we saw, what I saw at Apple when I was there a few days ago, was essentially that vision of a more agentic Siri that can actually understand and connect dots between data on your Apple device. And they have made a meaningful improvement there. Like, there's no question that this is a more capable Siri.

• 24:15Alex Heath?

  Is it anywhere near as capable as what we're seeing from Anthropic, right? Which just put out its Mythos-class model fable this week, or where ChatGPT is going, and we're Codex is going? No, it's nowhere near that. And also, I think people were unclear about the level of integration that Apple was going to have with Google and Gemini, right? There was all this reporting going into Dub Dub, which is what Apple calls it Dub Dub, about how much Google would be powering the new Siri. And it turns out they are, but what Apple's essentially doing is a bunch of distillation on top of Google's models and

• 24:57Alex Heath?

  post-training and customization where they can essentially ingest Google's model and kind of do what they want with it. And so it's not like Gemini in the essence of how someone would experience Gemini in a Google Surface or on Android is what's actually underneath Siri. It's actually many steps removed from what you'd experience on a Google Surface, which means that Apple's doing a lot of its own work around that. And I think people are still skeptical that Apple can pull it together here. And whether they can catch up and maybe they don't feel like they need to. That was kind of the message I got from executives there at Apple Park was they think it's early.

• 25:37Alex Heath?

  They think all this Asian hype is mostly that, still hype, brittle, not really working, certainly not working at scale on a platform like Apple with billions of users. But you saw them take little, I would say, inch forward steps towards a more capable Siri, certainly.

• 25:56Ed Elson?

  It seems like Wall Street was generally underwhelmed by their AI integration here, which, I mean, at the time when AI is everything to investors, that seems like a really bad thing to underwhelm with your AI product release. Was that your reaction? I mean, you say that they made like a meaningful improvement, but did you find it personally underwhelming as someone who covers this stuff regularly?

• 26:24Alex Heath?

  Yeah, I mean, here's the thing, the bar with Siri is so low. Like, I don't know about you, I don't trust Siri with anything other than like setting a timer. In fact, Siri for me is frequently the thing that I'm annoyed by because it's accidentally sending a text to someone. Someone when I don't want it to. That's usually my experience with Siri.

• 26:40Ed Elson?

  I turn it off. I don't want to use it ever. Yeah.

• 26:43Alex Heath?

  Yeah. So to improve beyond that is not a huge bar, right? It's like you're not accidentally texting someone you meant to just say aloud to someone in a room. That said, they have built this new, you know, I was in this uh this Q and A that exec said after the keynote, which by the way, Apple's never done. They've never done an on the record press Q and A after a keynote, which I think goes to show the level of uh concern they had about how all this was going to be interpreted. And they were talking about how the new foundation of Siri is modern, adaptable. They use the word expandable when asked about agents, which I think suggests that they're, you know, yes, the Siri we're seeing now, this new Siri is is not, it's like chat GPT from two years ago.

• 27:29Alex Heath?

  But the foundation of it is finally a stack that is something they can quickly adapt as they see fit. I I saw an investor um after the keynote uh at Apple Park, who made the very smart observation that Apple has essentially turned Siri into a harness and the models underneath are flexible and replaceable and swappable, right? Right now it's Google. Uh I don't think it will ever be OpenAI again. By the way, I think that partnership is on the outs. I wrote about that on sources. But maybe one day it's Claude, maybe it's one day, one day it's an open source model that they've distilled on. Maybe it's their own fully, you know, frontier Apple models, which they are still investing in their own models,

• 28:08Alex Heath?

  especially on device. Um but yeah, they're they're not, they're nowhere near where the state of current AI tools are, right? The new Siri doesn't have memory. It can't remember things across different conversations. It forgets every time, which if you're using Claude and ChatGPT like we are, that's kind of wild in 2026. And, you know, I think that's partly because maybe the technical foundation isn't there, but also because Apple's really concerned about the privacy of this stuff and the branding risk of it. And maybe we'll have a Cambridge Analytica moment around AI. I don't think it's happened quite yet, but I think they're worried about that. Um and so they're

• 28:47Alex Heath?

  Taking, you know, small steps, but I think setting themselves up in a way where they could lean in aggressively when they feel like the time is right. I mean, I've said this before, I think on the show, until people stop buying iPhones because of AI, Apple's going to do just fine. And in fact, in meetings I had with executives, they were touting, you know, open call, you know, driving up Mac mini sales, right? So they're a hardware layer beneficiary of AI and agents right now, even though they don't have a great software experience.

• 29:16Ed Elson?

  Based on what you said about how they're thinking about agentic AI, the how they're thinking, they, you said that they think that agents are kind of overhyped right now, or at least it's very early. In combination with the fact that they have come out with what is a largely underwhelming, and I would say dumber than average AI product. My takeaway is it sounds like Apple does not take AI very seriously. Would you say that that is a fair characterization?

• 29:45Alex Heath?

  I think there's nuance. I think they take it seriously, but they don't have this religious fervor. And I use religious intentionally. I think when you look at how Anthropic talks about AI, it's almost like they see it as a deity, right? I don't think they have this fervor around the technology as this bigger than life thing, the way that the labs do. And I think they see it as a tool and as a new kind of technology substrate that they'll build their platforms on over time. But they have the luxury of just kind of watching and learning as people experiment and fail and maybe succeed on the margin on the frontier. And they can come in, you know, a cycle or two behind, which is, you know, for people who study Apple, that's the history of Apple, right? I mean, there was the BlackBerry before the iPhone, right?

• 30:31Alex Heath?

  Obviously, you know, PC was quite strong before the Mac, right? So I think they can wait, I, but I, I think the bigger long-term risk for Apple, if you're thinking about the stock in like 10 years, is do agents make the concept of an operating system as it exists today archaic, right? Is this services business that is the majority of, you know, Apple's margin growth at risk from agents and, and then potentially new hardware form factors, like whatever OpenAI is going to do with Johnny Ive, the Meta glasses, all of that, right? And Apple will do glasses. I think they're working on that. I think we'll probably see that next year. But Yeah, I think I think that's the bigger long term risk.

• 31:15Ed Elson?

  Alex Heath, author of the Sources newsletter and co-host of the Access Podcast. Alex, thank you so much. Always appreciate your time.

• 31:21Alex Heath?

  Thanks, Ed.

• 31:24Ed Elson?

  T minus one day until SpaceX goes public. It will be the largest IPO of all time, a $75 billion offering at a $1.77 trillion valuation. My final message to our listeners before SpaceX starts trading publicly. My final message is do not buy this IPO. This company is dramatically overvalued and not only that, this is a rigged game and the game is not rigged in your favor. Here is my prediction for what will happen tomorrow. As soon as it hits the market, SpaceX stock will immediately explode 25%.

• 32:06Ed Elson?

  Why? Because this is the hottest stock in the world and because the banks need this IPO to be quote unquote, "successful" because if it goes badly, then all the other IPOs like OpenAI, like Anthropic, will be called into question, which will be a huge problem for the underwriters and for the markets at large. In other words, the bankers won't let this fail. They have the capital to make sure it won't fail, at least on the first day. However, my other prediction is that within six months, probably sooner, SpaceX stock will be cut in half. Why? Because the valuation makes no sense whatsoever. All of the insiders know this, all of the banks know this.

• 32:48Ed Elson?

  And as soon as the lockups expire, you will see one of the largest selling events in market history. The stock will tank and you can lock that prediction in from me right now. One final point before we go. Don't convince yourself that you can game this. If you buy the IPO tomorrow, you will already have missed the boat. The stock will pop as soon as it starts trading. And even if it starts to climb throughout the day, the reality is that those returns will be nothing compared to what the insiders have already gained and spoiler alert, at that point, they will already be selling. You cannot win this game. You will not win this game. Do not buy SpaceX tomorrow.

• 33:33Ed Elson?

  Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Brad Williams, our research team is Dan Shalon, Isabella Kinsel, Chris No Donahue and Mia Silverio, and our social producer is Jake McPherson. Thank you for listening to Prof G Markets from Prof G Media. If you liked what you heard, give us a follow. I'm Ed Elson. Tune in tomorrow for our conversation with Howard Marks.

• 34:01Speaker 15

  Close your eyes, exhale, feel your body relax, and let go of whatever you're carrying today.

• 34:09Speaker 16

  Well, I'm letting go of the worry that I wouldn't get my new contacts in time for this class. I got them delivered free from 1-800-CONTACTS. Oh my gosh, they're so fast.

• 34:17Speaker 15

  And breathe.

• 34:18Speaker 16

  Oh, sorry. I almost couldn't breathe when I saw the discount they gave me on my first order. Oh, sorry. Namaste.

• 34:26Speaker 15

  Visit 1-800-CONTACTS.com today to save on your first order. 1-800-CONTACTS.

• 34:31Speaker 17

  They're running a cover two defense. But you're running to get game day deals on Uber Eats. Keep everyone at tonight's watch party fed with deals from your go-to restaurants. Or stock up with deals on your favorite snacks and groceries. Whatever the occasion, get game day deals on Uber Eats all season long. It's not football without food. Uber Eats, order now. Terms apply. Product availability varies by region. See app for details.

• 35:01Speaker 18

  Out at McDonald's, you can bring two pairs of meat, special sauce, and a medium size, and a drink for $8. So just bring a Big Mac Extra Value Meal. Only at McDonald's. Prices and participation can vary. The price of the promotion can be lower than the one of mine.