SpaceX is gearing up for its record-setting IPO, but one prominent investor says he's treading cautiously amid the hype.
Steve Eisman, one of the traders who bet against the housing market in crisis-era saga "The Big Short," told CNBC on Monday that while he isn't planning to short the space stock when it starts trading, the company's S-1 filing raises some concerns.
"I think what is probably most important in the prospectus is how capital-intensive SpaceX has become," Eisman noted. "If you go back to fiscal year 2023 and you compare revenue to capex, capex was only 42% of revenue, and in the most recent first quarter, it was 215% of revenue."
Eisman attributed the capex surge to the significant AI buildout in which SpaceX has attempted to pivot toward branding itself as an AI services and infrastructure company company as opposed to a more pure-play space tech firm. In his view, the AI endeavors are making the company too capital intensive, contributing to his pessimistic view.
He also said that he doesn't view Grok as a leading AI model, and despite SpaceX's compute partnership with leading AI startup Anthropic, he still sees the company's business as overly capital intensive.
Eisman added that he thinks the most important news story of the past week is Google's $80 billion capital raise, because it highlights just how capital intensive the entire tech sector has become, with the whole business model shifting from asset-light to asset-heavy as the data center buildout continues at breakneck pace.
"Despite the incredible sums of money that are being spent, what's being produced in terms of LLMs and agentic AI, which is great, is not really differentiable," he added. "It's very commoditized. People are switching constantly from one to the other. There are no moats, so for all the money that's being spent, what's being created, it seems to me, is a commodity."
Eisman also addressed the topic of betting against Elon Musk, responding to the argument that as a CEO, he has constantly found new ways to survive and innovate, even when faced with multiple headwinds.
While he didn't deny Musk's record of success, Eisman reiterated his concerns about the capital intensive nature of SpaceX's business, highlighting what he sees as an over reliance on costly AI in a market where uncertainty is still high.
"The entire company is being bet on AI in terms of its future, not on space and not on Starlink," Eisman said.
