Expect SpaceX's free cash flow to weigh on the stock in the near term, says Evercore's Mark Mahaney
Speakers
Mark Mahaney
— Head of Internet Research, Evercore ISI
Summary
Mark Mahaney outlines near-term pressure on SpaceX shares from negative free cash flow revisions and lockup expirations, but argues its long-term structural advantages in launch and connectivity could drive a trillion-dollar revenue future. He also forecasts Amazon, Google, and Microsoft will join the trillion-dollar revenue club around 2030.
- SpaceX faces 3-to-12 months of stock pressure from free cash flow downgrades and upcoming share unlocks.
- Capex came in above expectations, likely triggering negative free cash flow revisions across the Street.
- Starlink is generating significant cash flow, giving SpaceX a structural and financial edge.
- Once free cash flow estimates stabilize and lockups clear, SpaceX could materially outperform.
- The company's launch and connectivity lead is described as a near-monopoly position.
- Amazon, Google, and Microsoft are seen as trillion-dollar revenue generators around 2030.
Ideas
Avoid SpaceX near term on cash flow
SpaceX holds a structural monopoly-like advantage in rocket launches and space connectivity, with Starlink generating significant cash flow. Once free cash flow estimates stabilize and lockup expirations are past, the stock can materially outperform, supported by a large backlog and rapid revenue growth toward a trillion-dollar revenue potential.
Own Amazon, Google, Microsoft for trillion-dollar revenues
Amazon, Google, and Microsoft are on track to become trillion-dollar revenue generators around 2030, underpinned by extremely strong core structural and financial centers that fund growth investments.
