Sequoia Partner: SpaceX Is Massively Underestimated, Poised for Nvidia-Style Growth

Sequoia Partner: SpaceX Is Massively Underestimated, Poised for Nvidia-Style Growth

TREE NEWS reports: In a post on X, Sequoia Capital partner Shaun Maguire argued that SpaceX is on the cusp of an explosive revenue surge comparable to Nvidia’s last three years, and that most investors are severely underestimating the company. Following SpaceX’s earnings call, Maguire published a bottom-up financial model that he described as “breathtaking,” and said he chose to speak out against the prevailing panic over geopolitical uncertainty and inflation pressures because his forecast would seem “crazy to over 90% of investors.”

The Core Bull Case

Maguire highlighted four key drivers: top-tier talent density, SpaceX’s position as a low-cost supplier in AI compute infrastructure, the historic moat built by Starship, and Starlink’s unit economics. He also predicted that the Direct-to-Cell business will surpass Starlink’s core revenue by 2029-2030 under almost any scenario.

On talent, Maguire called SpaceX’s team “the most elite on Earth,” noting that the company’s culture combines extreme work intensity with an objective evaluation mechanism—rockets either fly or explode—which leaves no room for politics and ensures high talent density over 25 years. He argued this is decisive for building gigawatt-scale AI data centers, which he believes are one to two orders of magnitude more difficult than megawatt-scale CPU data centers.

Maguire devoted much of his analysis to Starship, which he considers the most complex system ever built, surpassing cutting-edge chip manufacturing, ASML’s EUV lithography, and ITER. He cited the global competition: SpaceX achieved first booster recovery in 2015, while competitors reached the same milestone about a decade later, and he believes the gap is widening. He also stressed that Starship’s supply chain is highly vertically integrated within SpaceX, making the moat “unimaginably deep.”

On cost leadership, Maguire compared AI compute pricing to oil production rather than dot-com-era broadband, arguing that barriers to entry for gigawatt-scale AI compute are much higher. He estimated that compute costs are unlikely to fall below $20 billion per gigawatt within four years, and at that price point SpaceX’s unit capex would decline further as competition shrinks. He built a company-wide model through 2028, identifying revenue per gigawatt and capex per gigawatt as coupled constants.

Finally, Maguire disclosed Starlink’s capital efficiency: the current constellation generates about $20 billion in annualized revenue and was built with roughly 400 Falcon 9 launches. Since one Starship launch carries about 20 times the capacity of a Falcon 9, only about 20 Starship launches could support $20 billion in annual revenue, implying about $1 billion in annual revenue per launch, or $5 billion in lifetime revenue per launch over a five-year life. He expects orbital compute to become financially significant from 2029, and within a decade SpaceX’s vertical integration in chips to rival its position in rockets today.

Market Implications

While SpaceX remains private, Maguire’s comments carry weight for public markets. They reinforce the narrative that AI infrastructure demand is far from saturating, which could support shares of companies across the AI supply chain—from chipmakers like Nvidia and AMD to power and cooling providers. The emphasis on energy and gigawatt-scale infrastructure also highlights the growing importance of utilities and grid equipment.

For bonds, the bullish capex outlook suggests continued heavy issuance from tech and telecom firms investing in AI, which could keep upward pressure on corporate bond yields. In commodities, the focus on energy and raw materials for data centers could boost demand for copper, uranium, and natural gas.

In crypto, the mention of orbital compute and SpaceX’s potential chip integration may spark interest in decentralized compute networks and AI-crypto tokens, though direct impact is limited. The dollar and rates remain driven by macro factors, but if SpaceX’s growth story boosts risk appetite, it could support equities and crypto broadly.

Key Takeaways for Investors

• SpaceX, though private, is a bellwether for AI infrastructure demand; its growth trajectory supports the bull case for AI-related public equities.
• Starship’s cost advantages could disrupt launch markets and accelerate space-based connectivity, benefiting suppliers and partners.
• Investors should watch for spillover effects in energy, commodities, and crypto compute narratives, but remain mindful of macro risks that Maguire downplayed.
• The debate over SpaceX’s valuation underscores the difficulty of pricing disruptive private technology, and public market investors may seek exposure through ETFs or SPACs.