Prepare for the SpaceX IPO expected on June 12th, but exercise extreme caution as the $1.75–$2 trillion valuation represents a massive 100x sales multiple despite decelerating revenue growth. Investors looking for immediate AI-driven financial results should favor hardware leaders like Dell Technologies (DELL), which recently reported 39% revenue growth, over struggling software names like Salesforce (CRM). Consider a long-term position in Bank of America (BAC) as its low-yield COVID-era bonds expire, which is expected to naturally expand profit margins regardless of Federal Reserve interest rate moves. For a cyclical recovery play, accumulate Moody’s (MCO) or S&P Global (SPGI) to capitalize on the end of the "debt issuance drought" and a return to normal corporate borrowing. Finally, look beyond legacy defense giants toward smaller, nimble defense tech firms that are currently capturing market share from older, less adaptable competitors.

SpaceX (Private - IPO expected June 12th)

• SpaceX is preparing for what is described as the biggest IPO in history with a potential valuation of $1.75 to $2 trillion. • The company consists of three main divisions: • Space: Rocket launching for satellites (Revenue down 28% in 1Q26 due to timing of government contracts). • Connectivity (Starlink): Global mobile connectivity (The only division currently generating an operating profit; 32% revenue growth). • AI: Data centers and the Grok LLM (Smallest division, currently losing the most money). • NASDAQ has reportedly adjusted rules specifically for this IPO, allowing the stock to enter indices just 15 days after the IPO despite a small float of only 5%. • Elon Musk is reserving 30% of the offering for retail investors, which is significantly higher than the typical institutional allocation.

Takeaways

• Valuation Concerns: The targeted valuation is approximately 100x sales, which is significantly higher than "Trillionaire Club" peers like NVIDIA (14x) or Broadcom (19x). • Growth Deceleration: Total revenue growth slowed to 15% in 1Q26, compared to 33% in 2025. This growth rate is currently lower than all of the "Big Six" tech giants. • "Retail Cult" Status: The high retail allocation and "sci-fi" mission statement suggest the valuation relies on emotional investor sentiment rather than current fundamentals. • Potential Merger Risk: There are rumors of a future merger between Tesla (TSLA) and SpaceX, which would create an incredibly complex corporate structure.

Salesforce (CRM)

• The company reported a beat on adjusted Earnings Per Share (EPS) but issued disappointing revenue guidance. • Salesforce guided revenue to $11.27B - $11.35B, missing analyst expectations of $11.36B. • The narrative around software remains negative as investors fear the long-term impact of AI on the sector.

Takeaways

• Earnings Quality: Much of the "beat" in earnings is attributed to excluding stock-based compensation. The Gap EPS ($2.42) was significantly lower than the adjusted EPS ($3.88). • Sector Sentiment: While the stock saw a temporary lift from Snowflake's positive results, the overall software rally is viewed as "tenuous."

Dell Technologies (DELL)

• Dell is benefiting significantly from AI capital expenditure (CapEx) in the hardware sector. • The stock has seen massive momentum, up 148% year-to-date. • Quarterly revenue grew by 39% and EPS grew by 45%, leading to raised guidance for the fiscal year.

Takeaways

• Hardware Strength: Unlike software, hardware companies like Dell are seeing immediate, tangible financial benefits from the AI build-out.

Bank of America (BAC)

• Discussion centered on whether large-cap banks are at the end of a rate cycle with thin margins. • Bank of America previously struggled by locking into long-dated Treasuries during the COVID era, which suppressed its Net Interest Margin (NIM).

Takeaways

• Bullish Outlook: Despite the previous mistakes, those low-yield bonds are "rolling off." The NIM is expected to improve over the next several years regardless of Fed policy. • Resilience: With a return on tangible common equity of 16%, the bank remains a solid hold as long as a recession is not imminent.

Ratings Agencies: Moody’s (MCO) & S&P Global (SPGI)

• These companies operate as an oligopoly in the financial markets. • They have underperformed the broader market over the last five years because debt issuance "dried up" after a massive pull-forward in 2020-2021.

Takeaways

• Cyclical Recovery: The "issuance drought" is ending, and debt issuance is beginning to pick up, which serves as a catalyst for these stocks. • Investment Stance: Steve Eisman personally owns Moody's (MCO) and views the ethical concerns regarding the 2008 financial crisis as a thing of the past under new management teams.

Investment Themes: AI & Technology

• Subsidized AI: The current business model for AI (like Uber in its early days) relies on subsidizing the cost of "tokens" to build user dependence. • Pricing Shifts: This subsidy model is beginning to change, and there is a potential "race to the bottom" regarding the pricing of AI tokens. • Defense Sector: Smaller, more nimble defense companies are beginning to take market share from the "too big to pivot" legacy defense giants that merged in the 1990s.