Aswath Damodaran on SpaceX, AI and the Limits of Big Market Stories

Professor Aswath Damodaran joins The Intangible Economy to break down how to value SpaceX, AI companies, intangible assets, and the future of value investing. We discuss why big markets do not automatically create big value, how AI CapEx is changing the character of major technology companies, and why the best investment stories still have to connect to the numbers. Aswath Damodaran on X https://x.com/AswathDamodaran Musings on Markets https://aswathdamodaran.blogspot.com/ Revisiting the SpaceX Valuation: A Post-Prospectus Update https://aswathdamodaran.blogspot.com/2026/06/a-weeks-ago-i-assessed-value-of-spacex.html The Big Market Delusion: Valuation and Investment Implications https://papers.ssrn.com/sol3/papers.cfm?abstract\_id=3501688 Valuing Cyclical and Commodity Companies https://people.stern.nyu.edu/adamodar/pdfiles/papers/commodity.pdf Value Investing: Requiem, Rebirth or Reincarnation? https://papers.ssrn.com/sol3/papers.cfm?abstract\_id=3779481 Topics covered: - Valuing SpaceX after its IPO and why price matters even for great companies - How Starlink, space launch, and xAI fit into SpaceX’s valuation story - Why total addressable market can mislead investors in AI and other disruptive industries - The problem with AI unit economics, data centers, power, water, and reinvestment needs - Why growth can destroy value when margins and returns on capital are weak - How intangible assets, R&D, future growth, and narratives should show up in valuation - The Big Market Delusion and how overconfidence drives boom and bust cycles - Why AI CapEx is different from the dot-com boom and could create broader risks - How AI is changing the character of the Magnificent Seven and semiconductor companies - Why value investing became rigid, ritualistic, and righteous, and how it can evolve Timestamps: 00:00 Why great companies can still be bad investments 01:03 Introducing Aswath Damodaran and The Intangible Economy 01:49 SpaceX IPO, Starlink, xAI, and the challenge of valuing uncertainty 05:31 Why Starlink became the core of SpaceX’s current revenue 10:31 How Damodaran valued SpaceX across launch, connectivity, and AI 14:07 Why AI’s huge market may still have difficult unit economics 17:10 The tension between SpaceX competing in AI and renting data centers to competitors 20:00 Why valuation should use distributions instead of false precision 22:39 How stories and numbers work together in valuation 26:45 Why investors confuse promises, potential, and businesses 30:49 The Big Market Delusion and overconfidence in AI investing 33:02 Why the AI CapEx boom is different from the dot-com bubble 35:17 How AI infrastructure is changing the Magnificent Seven 38:36 Nvidia, Micron, semiconductors, and the risk of peak cycle earnings 41:00 Why the biggest AI market stories could be scary for society 43:37 AI disruption, labor markets, and the speed of technological change 46:30 Measuring which jobs and companies are most exposed to AI automation 49:00 Why AI cost structure may look more like Spotify than software 51:13 The unresolved business model questions for LLMs and AI agents 52:29 Why traditional value investing lost its edge 56:03 Passive investing, book value, and the blame game in value investing 58:13 Why rigid value investing is vulnerable to AI disruption 01:00:58 How value investing can adapt to intangible assets and uncertainty 01:02:21 Why any company can be a good investment at the right price 01:04:57 Why investing mistakes and track records are harder to judge than they look