Bears that are convinced that SpaceX (SPCX) is not worth the same as Amazon (AMZN) or Microsoft (MSFT) by market capitalization have limited options.
Option puts traded at a steep premium on June 17. Bears would need a wide price swing for the put to have a positive return. However, options face time decay, so it creates a race against time for the bearish bet to pay off.
SpaceX’s IPO created several eye-catching headlines. For example, Elon Musk took the title of the first trillionaire. The market cap of the AI company soared above that of established Magnificent 7 firms, too.
The notorious rise is not accidental. SpaceX’s purchase of Cursor for $60 billion shakes up the AI chatbot space. To outflank Cursor, Meta Platforms (META) would need to spend even more on hardware for Meta AI. Microsoft is already spending $190 billion in capital
expenditures this year. It might need more to secure subscription growth for its AI, CoPilot.
The race to have the better AI dramatically increases risks for shareholders. Firms are consuming their free cash flow, adding to their debt, and hurting their core businesses. Their investments might not pay off.
Anthropic has the best AI with Claude Opus. It also released an even more powerful model. Mythos and Fable 5 are the newest releases.
Investors should neither short SPCX stock nor buy puts at this time.
