Good morning investors,
There is genuinely only one thing on the market's mind this morning, and it leaves the launchpad at the Nasdaq later today. SpaceX goes public in the largest IPO in history, raising roughly $75 billion at a fixed price of $135 per share that values the company at $1.77 trillion. To put that in perspective, it more than triples Saudi Aramco's record debut and instantly makes SpaceX the seventh most valuable public company in America, ahead of both Tesla and Berkshire Hathaway. After months of anticipation, the moment is finally here, and I have been looking forward to watching this one trade for weeks.
The backdrop could hardly be more favorable for the debut. Futures are firmly higher after Iranian state media reported that a draft peace memorandum would see the Strait of Hormuz reopen in exchange for the US lifting oil sanctions, with a deal potentially signed in Switzerland as soon as Sunday.
S&P and Nasdaq futures are up around 0.6%, the Dow has added 363 points, and global markets are rallying hard, with Korea's Kospi up 4.6%, Japan's Nikkei up 2.8%, and Europe's Stoxx 600 up nearly 2%. The geopolitical cloud that hung so heavily over this week appears, at least for now, to be lifting.
Yesterday's Turn
Thursday delivered a powerful reversal, and the timing of it was remarkable. The Nasdaq led with a 2.5% gain, its best session since early April, while the S&P added 1.8% and the Dow climbed 1.9%. The catalyst was President Trump calling off planned strikes and signaling a deal to end the conflict was close at hand.
I have to give credit where it is due on the timing. President Trump posted his message about the coming deal at almost the precise moment the Nasdaq was about to break to new session lows, and it single handedly rescued what was shaping up to be another ugly red day. Whether by design or coincidence, the announcement could not have landed at a more market friendly moment, and it flipped the entire tape from despair to euphoria in a matter of minutes. That kind of headline sensitivity tells you everything about how fragile and reactive sentiment has become this week.
The Main Event
Let me give you the full picture on this offering, because the numbers are staggering. SpaceX is selling 555.6 million shares for roughly $75 billion, yet that represents only about 4% of the company, leaving Musk with 82.4% voting control through his Class B shares. Total demand reportedly ran four times the available shares. The retail allocation is the truly unusual feature, set at around 30% versus the typical 5% to 10%, and retail orders alone came in above $70 billion, more than triple what was set aside for them.
The business underneath the hype is genuinely impressive in parts and speculative in others. In 2025 SpaceX generated $18.7 billion in revenue against a $4.9 billion net loss, with $6.6 billion in adjusted EBITDA. Starlink is the profitable engine, producing $11.4 billion in revenue and a $4.4 billion operating profit as subscribers grew from 2.3 million in 2023 to 10.3 million today. The launch business flew 165 Falcon 9 missions last year and commands roughly 90% of global commercial launch by mass, though it still lost $657 million. The February xAI merger folded in the Colossus data centers, for which Google reportedly pays $920 million a month for compute.
The valuation is where the tension lives. At $135, the company trades at roughly 95 times trailing sales. Morningstar pegs fair value at $63, less than half the IPO price. More than 90% of SpaceX's projected $28.47 trillion total addressable market is attributed to its AI business, much of it tied to orbital data centers that do not yet exist and that several credible engineers describe as, at best, years away from feasibility. Wall Street is split, with Oppenheimer initiating at Outperform and a $190 target while LPL warns the ride between here and the stars may be too turbulent for some.
My Honest Take: I Am Not Chasing It
I will be direct with readers about how I am approaching this, because I think the discipline matters more than the excitement. I am not chasing SpaceX on day one. The opening session of an IPO this size is almost entirely a sentiment trade, with every retail dollar in the country and a wave of institutional FOMO trying to get filled at the same price at the same moment. That is the worst possible setup to be a buyer, and I expect today to be extraordinarily volatile.
The piece worth emphasizing is that anyone holding Nasdaq exposure already has meaningful indirect participation in SpaceX coming their way. Once the stock lists and is added to the index, Nasdaq tracking positions will pick it up automatically at index weight. You are not standing on the sidelines, you are simply participating through a more measured channel without paying the day one premium. The case for adding a direct position above and beyond that benchmark exposure is to lean into the name with conviction, and the cost of waiting for a better entry is genuinely small. Any meaningful pullback in the days or weeks after the debut would offer a far better chance to add at a price that is not being driven by opening day euphoria, and that is the setup I would rather wait for.
To be clear, the business is real. SpaceX controls the majority of global satellite launches, Starlink runs profitably, and the NASA contracts are locked in for years. The question is not quality, it is price. At this valuation you are already paying for flawless execution on Mars, an aggressive Starship cadence, and space based data centers that remain entirely theoretical. I would rather see how the float behaves before committing fresh capital.
There is one more reason to watch closely rather than leap. SpaceX is the leading indicator for the OpenAI and Anthropic listings lined up behind it. If it trades soft, expect the rest of the AI complex to feel it. If it rips, the IPO wave gets validated and the next deals price aggressively. Either way, the way this float trades over the coming sessions will tell us a great deal about the appetite for the historic wave of issuance now upon us.
Why a Portfolio Needs a Plan Behind It
Days like today are exactly why I keep returning to a principle that sits at the heart of how I manage money for clients.
A portfolio is not a collection of exciting individual bets, it is the financial expression of a plan, and that plan should be anchored to your actual goals, your time horizon, and your tolerance for risk rather than to whatever is generating headlines on a given morning.
The reason I build diversified, rules based portfolios is precisely so that a single dazzling story like SpaceX does not dictate your financial future. When a name like this debuts, the right question is never simply "do I want to own it," it is "does owning it, at this price and this size, move me closer to what this money is actually for." For some clients a small position sized within a disciplined framework makes sense. For others, the index level exposure they already hold is exactly right. The plan tells you which, and it removes the emotion from a decision that the market is engineered to make as emotional as possible. That is the entire value of having a financial plan behind the portfolio. It keeps the once in a generation IPO in its proper place as one consideration among many, rather than letting it become the thing that knocks a carefully built strategy off course.
The CPU Story Keeps Building
Beneath the IPO spectacle, the structural AI thesis continues to strengthen in ways I find compelling. Bank of America put out a striking call on the server CPU market, projecting it grows from $35 billion in 2025 to more than $170 billion by 2030, a fivefold expansion well ahead of prior estimates. The driver is agentic AI, which the firm describes as a powerful demand accelerant. When AI agents take actions on your behalf, scouring your inbox for a conference detail and dropping it on your calendar, they lean on CPUs to execute those tasks rather than the GPUs that train the models.
This is the theme I have been developing for weeks, the migration of the bottleneck from GPUs toward CPUs as the workload shifts from training to agentic execution. It lifts AMD and Intel, both of which have already more than doubled and tripled respectively this year, alongside the Arm based challengers. The Philadelphia Semiconductor Index has returned more than 80% in 2026, and despite the violent pullback this week, the long-term demand picture for the entire compute stack keeps expanding. SpaceX is even part of this story, with its orbital data center ambitions, however speculative, representing yet another potential source of AI capacity demand.
While I do feel the semiconductor space needs a slight pullback from here, I do maintain it is pivotal to the AI trade long term.
The Iran Breakthrough
The development driving this morning's global rally is genuine and significant. Iranian state media reported the draft memorandum includes a US commitment to lift oil sanctions and an Iranian commitment to reopen the Strait of Hormuz, with Bloomberg reporting a deal could be signed in Switzerland as soon as Sunday. Iran's official news agency cautioned that the timing and location remain media speculation pending a final announcement, but the direction is unmistakably positive.
This is the de-escalation I have held as my base case throughout the conflict, even through this week's frightening escalation. If the strait reopens and sanctions lift, the path is cleared for oil to drift back toward the $80 level I have been targeting, which would relieve the single largest source of inflation pressure that has pushed CPI above 4% and stoked the Fed hike fears. A durable peace would remove the geopolitical overhang that has narrowed and pressed on this market all week, and it would do so just as the froth has come off the most extended trades. That combination, a cleaner technical setup paired with easing geopolitical and inflation pressure, is precisely the foundation from which I expect a strong rally into the midterms to build, after a summer of digestion.
A Note of Caution on the IPO Wave
I would not let the excitement obscure the structural concern that several strategists have flagged sensibly. Large IPO issuance tends to occur during periods of strong sentiment, but the added equity supply can cause indigestion. Household equity exposure already sits near an all time high, which means investors may sell existing holdings to fund these new positions. We are already seeing exactly that, with VandaTrack reporting retail traders dumping AI favorites like Micron, AMD, and Marvell this week to free up capital for SpaceX.
Combined with ongoing geopolitical tension and the approaching midterms, this is one more reason to expect greater choppiness in the back half of the year. I remain favorable on the AI theme and would not abandon it, but I would not chase this run up either. The sector has gained 37% since April against the S&P's 17%, and that kind of outperformance warrants measured participation rather than blind enthusiasm.
Final Thought
This is the start of historically interesting times for investors, and I mean that in the fullest sense. The largest IPO ever is trading today against a backdrop of a potential Iran peace deal, inflation above 4%, rising Fed hike odds, and a froth clearing pullback that took the air out of the most extended names just in time. Each of those forces is significant on its own. Together they make this one of the more consequential days I can recall covering.
My approach is unchanged and, I think, vindicated by the week's action. I am not chasing SpaceX on day one, I already have measured exposure through index holdings, and I would rather wait for the opening euphoria to fade before committing fresh capital to the name. The pullback in the broader market was the healthy housekeeping I called for, the readers who rebalanced ahead of it are well positioned, and the potential Iran resolution removes the largest cloud over the long term case.
My pillars stand firm: earnings growing roughly 25% this year, oil easing as the strait reopens, and a Warsh-led Fed inclined to resist the hawks. The 10-year above 4.75% remains the level that would change my mind, and until it breaks, I view everything this week as setup for a strong second half.
Watch SpaceX trade today, but watch it with discipline rather than envy. Respect the volatility, remember that a plan should drive every position, and keep your powder ready for the better entries that almost always follow a debut like this. It is going to be a fascinating session, and I will be watching every tick.
Have a wonderful weekend, and enjoy the show.
Best regards from home,
Dan Sheehan [email protected]
Subscribe: https://substack.com/@dansheehan3
Market Pulse with Dan Sheehan is a personal market commentary newsletter and is independent from my employer. The content is provided for informational and educational purposes only and reflects my views as of the publication date, which may change without notice. Nothing contained herein should be construed as personalized investment, legal, tax, or financial advice, or as a recommendation to buy or sell any security. Any positions discussed represent my own views and may not be suitable for every reader's objectives, financial situation, or risk tolerance. Information is derived from publicly available sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Readers should conduct their own research and consult their own professional advisers before making financial decisions.