I shared this in Tekedia Capital WhatsApp Group

Greetings. Many members keep asking whether a SpaceX IPO at a valuation of roughly US$1.8 trillion would be a good buy. My simple answer is: probably not.

Forget the emotions. Forget the excitement of being able to say, “I own SpaceX.” Markets do not reward bragging rights; they reward compounding. Investing is ultimately about where you enter and what return can reasonably be generated from that entry point.

SpaceX is a remarkable company. It has transformed the economics of space launch, built a dominant satellite business, and created technological capabilities that few organizations in human history have matched. But a great company does not automatically become a great investment at every price.

Consider the numbers. SpaceX reportedly generated less than US$20 billion in revenue last year. Meanwhile, Nvidia is approaching US$300 billion in annual revenue and is producing extraordinary profits. Yet Nvidia’s valuation is around US$5 trillion. Google’s parent, Alphabet, is generating roughly US$440 billion in annual revenue and still trades below that level.

The question therefore is not whether SpaceX is great. The question is whether a company with roughly US$20 billion in revenue can justify a US$1.8 trillion valuation and then compound sufficiently from there to generate venture-style returns.

This is where accounting and business fundamentals matter. During my ICAN days, one lesson repeatedly drilled into us was that numbers eventually matter. Narratives can move markets for a period, but over time, financial performance must support valuation.

For SpaceX to move meaningfully beyond US$1.8 trillion, it would need massive growth in revenue and cash generation. If investors are looking for a 5x return, the implied valuation approaches levels that would exceed the combined value of many of the world’s largest technology companies. That is a difficult proposition, even for an exceptional business.

Tesla benefited from a unique combination of retail enthusiasm, policy incentives, EV credits, and a broad consumer market. SpaceX operates in a different environment. It must largely win through execution, contracts, infrastructure, communications, and commercial expansion. The path is real, but it is harder.

Good People, if I had fresh cash and wanted exposure to the future, I would seriously consider Alphabet. In many ways, Alphabet may be the greatest venture capital company in the world. Through its ecosystem, infrastructure, research, cloud platform, AI investments, and strategic holdings, it has positions across many of the technologies shaping the future.

SpaceX is an extraordinary company. But at a US$1.8 trillion entry valuation, I struggle to see where the alpha comes from. As investors, we must separate admiration for a company from the economics of an investment.

Those are two very different things.

Comment #1: ” Well, as for me and my household, we only want to own disruptive startups that are valued not more than a few hundred million dollars. Anything valued over a trillion dollars is a weighted elephant that will slow us down. We love taking smart risks, and riding the waves into the unicorn stratosphere.”

Comment #2: “My brother can you explain this principle?”

My Response: Let me help here because Chairman did not fully address the specific point you raised. What he was essentially saying is this: if SpaceX comes to the public market at a valuation of, say, US$1.8 trillion while generating roughly US$20 billion in annual revenue, the market may initially support that valuation because of excitement, scarcity, and the extraordinary reputation of the company. But history teaches us that IPOs often experience what I call the “effervescence effect”, similar to those chemistry experiments in secondary school where gas bubbles rapidly escape during a reaction involving carbonates or bicarbonates [God bless Mr Ekeabu and Mr Udeagu Jr, my Chemistry teachers]. Markets behave the same way. Excitement creates bubbles of enthusiasm, and after that phase, valuations frequently settle to more sustainable levels.

So, let us assume the optimistic scenario where SpaceX successfully maintains a US$1.8 trillion valuation after listing. The next question becomes: where does the return come from? Ultimately, valuation growth must be supported by business growth. Today, companies in the US$4–5 trillion category typically require hundreds of billions of dollars in annual revenue and extraordinary profitability. If SpaceX is generating approximately US$20 billion today, moving to US$200 billion or more in revenue within three years would be exceptionally difficult, even for a company of its quality.

This means that even if SpaceX reaches a US$4 trillion valuation within a few years, which itself is an aggressive assumption, the investor only realizes roughly a 2x return from a US$1.8 trillion entry point. To achieve a 5x return, SpaceX would need to approach a valuation close to US$9 trillion. That would exceed the combined scale of many of today’s largest technology giants and is difficult to justify within a short investment horizon.

The key lesson is this: do not focus solely on how great the company is. Focus on where you are entering. A great company does not automatically make a great investment. Investment returns are determined by the relationship between entry price and future value creation. From the framework we teach at Tekedia Mini-MBA and which we will deepen in our Nigeria Capital Market Masterclass starting June 15 https://school.tekedia.com/course/market/ ), investors generally fall into three categories:

Income Chasers seek dividends and predictable cash distributions. SpaceX does not fit that profile because it is focused on growth and reinvestment rather than income generation.

Value Pickers look for assets trading below intrinsic value. SpaceX does not fit that profile either because it is one of the most sought-after private companies in the world and is unlikely to be offered at a discounted valuation.

Growth Makers pursue substantial appreciation, often targeting 5x, 10x, or greater returns. The challenge here is that for SpaceX to generate that level of return from a multi-trillion-dollar starting point, it would need to create value equivalent to several of the world’s largest public companies combined.

So Chairman’s point was not that SpaceX is not a great company. Quite the opposite. The point is that at a sufficiently high entry valuation, even a phenomenal company may struggle to deliver the level of alpha that growth-oriented private investors typically seek.

Nvidia is poised to make one of the most significant moves in its history beyond graphics processors, with reports indicating that the AI chip giant and Microsoft will unveil the first Windows personal computers powered by Nvidia-designed central processing units next week.

The anticipated launch, expected at Taiwan’s Computex trade show and Microsoft’s Build developer conference in San Francisco, marks Nvidia’s formal entry into a market long dominated by Intel and AMD. It also represents Microsoft’s latest attempt to reshape the Windows ecosystem around more power-efficient Arm-based processors, a strategy aimed at narrowing the gap with Apple’s increasingly successful Mac lineup.

According to Axios, the first Nvidia-powered Windows devices will include models from Microsoft’s Surface family as well as systems from major PC manufacturers such as Dell. The companies have not officially confirmed the report, but speculation intensified after the official X accounts of Windows, Nvidia, and Arm simultaneously teased an announcement described as “A new era of PC,” accompanied by coordinates pointing to Taipei, where Computex is being held.

The development would be the culmination of a strategy Nvidia has been quietly pursuing for years. Reuters reported as early as 2023 that Nvidia was designing CPUs capable of running Microsoft’s Windows operating system using Arm architecture, positioning itself to compete directly with Qualcomm, Intel, and AMD in the personal computing market.

For Nvidia Chief Executive Jensen Huang, the move reflects a broader vision that extends well beyond the company’s dominance in AI accelerators. While Nvidia’s GPUs remain the backbone of the global artificial intelligence boom, Huang has repeatedly argued that the next phase of AI computing will require CPUs and GPUs to work together, particularly as agentic AI systems perform increasingly complex autonomous tasks.

That shift is creating what Huang recently described as a new $200 billion CPU market opportunity, one that Nvidia believes it is uniquely positioned to capture through tightly integrated computing platforms.

The company’s strategy mirrors the approach that transformed Apple’s fortunes in the PC industry. Apple abandoned Intel processors in favor of its internally developed Arm-based silicon beginning in 2020, delivering substantial improvements in battery life, performance, and power efficiency. The success of Apple’s M-series chips has reshaped expectations across the PC industry and intensified pressure on Microsoft and its hardware partners to offer comparable alternatives.

Microsoft has already made several attempts to build momentum behind Arm-powered Windows devices, largely through partnerships with Qualcomm. While those efforts produced improvements in battery life and efficiency, they have yet to trigger a major surge in PC sales or significantly alter Intel and AMD’s grip on the Windows market.

Nvidia’s arrival could change that equation.

Unlike Qualcomm, Nvidia enters the market with unparalleled influence among AI developers, cloud providers, and enterprise customers. Its brand has become synonymous with artificial intelligence, and integrating Nvidia CPUs with the company’s AI software ecosystem could give Windows PC makers a stronger platform for running advanced AI workloads locally.

The timing is particularly notable as Microsoft accelerates its push toward AI-powered computing. The Axios report said the company is also expected to unveil new software capabilities that allow AI agents to perform tasks directly on Windows devices rather than relying exclusively on cloud infrastructure.

Such functionality could become increasingly important as businesses seek faster, more secure, and less expensive ways to deploy AI applications. Running AI models locally reduces latency, lowers cloud-computing costs, and addresses growing concerns around data privacy and regulatory compliance.

For the broader semiconductor industry, Nvidia’s entry intensifies competition across a market already undergoing profound change. Intel and AMD continue to dominate traditional Windows laptops and desktops, but both companies are increasingly facing pressure from Arm-based alternatives. Qualcomm has sought to establish itself as Microsoft’s primary Arm partner, while Apple has demonstrated that custom silicon can deliver substantial competitive advantages.

Nvidia now enters the contest with arguably the strongest AI credentials of any chipmaker. The company’s expansion into CPUs also aligns with a broader industry trend in which technology giants are seeking greater control over their computing stacks. Nvidia is moving beyond GPUs, AMD is expanding its AI portfolio, Intel is rebuilding its manufacturing and packaging businesses, and cloud providers such as Google, Amazon, and Microsoft are designing more of their own chips.

The result is a semiconductor industry where traditional boundaries between CPU makers, GPU makers, and software companies are rapidly disappearing. If the upcoming announcements deliver meaningful performance improvements and strong battery efficiency, Nvidia-powered Windows PCs could represent the most credible challenge yet to Apple’s silicon strategy. It could also open a new growth avenue for the world’s most valuable semiconductor company.

The scramble to secure computing power for artificial intelligence is no longer confined to billion-dollar data centers and advanced Nvidia chips.

Increasingly, it is spilling into the consumer hardware market, where an unlikely device has emerged as a favorite among AI developers, power users and technology enthusiasts: Apple’s Mac Mini.

That trend is now being amplified by Perplexity, which has been sending Mac Minis to select users as part of an effort to showcase its new AI agent platform, Personal Computer.

A handful of technology-focused creators began posting online in recent weeks that they had received Mac Minis from Perplexity. The company later confirmed it had distributed a small number of devices to people interested in exploring the full capabilities of Personal Computer, its newest push beyond AI search and into autonomous digital assistants.

The campaign may appear at first glance to be a straightforward influencer-marketing exercise. In reality, it highlights a much larger shift underway in the AI industry: the growing importance of personal computing infrastructure as AI agents become capable of performing increasingly complex tasks on behalf of users.

Perplexity’s Personal Computer, which began rolling out in April, expands on the company’s browser-based AI agent technology by allowing AI to operate across local files, native applications, and web services. Unlike traditional chatbots that simply answer questions, the system is designed to interact directly with a user’s digital environment.

Perplexity has described the Mac Mini as “one of the best ways to experience Personal Computer.”

“On a mini, Personal Computer stays available 24/7 for work that needs a persistent machine or secure local access to your files and native apps,” the company wrote in an April blog post.

That statement offers a glimpse into where AI development is headed.

For years, most advanced AI services have relied almost entirely on cloud computing. Users submit requests to remote servers, which process information and return answers. But as AI agents evolve from conversational tools into software capable of carrying out multi-step actions, there is a growing demand for systems that remain continuously available, retain access to local files, and operate with lower latency.

The Mac Mini has emerged as an attractive platform for that transition. Its appeal stems from a combination of factors: powerful Apple silicon processors, relatively low energy consumption, quiet operation, and the ability to remain online continuously. Those characteristics make it particularly suitable for running AI agents that need persistent access to applications, documents, and workflows.

Perplexity Chief Communications Officer Jesse Dwyer underscored that use case, telling Business Insider that he uses his Mac Mini constantly and accesses it remotely through other Apple devices regardless of location.

The enthusiasm around the machine is not limited to Perplexity. Across the AI ecosystem, developers and hobbyists have increasingly embraced the Mac Mini as a dedicated AI workstation capable of running agent-based systems, coding assistants, and local AI applications. What was once considered Apple’s most overlooked desktop product is increasingly being viewed as an affordable gateway into AI-powered productivity.

The surge in interest has become significant enough to affect supply. During a March earnings call, Tim Cook highlighted strong demand for the product. Availability has tightened in recent weeks as more consumers, developers, and AI enthusiasts seek out the device. Apple’s base-model Mac Mini has become increasingly difficult to find, leaving many buyers with higher-priced configurations.

The phenomenon illustrates a broader shift in how AI is being commercialized. Much of Wall Street’s attention remains focused on companies building large language models, AI chips, and cloud infrastructure. Yet a parallel market is emerging around the hardware required to run AI agents in everyday environments. As those systems become more autonomous, users may want dedicated machines that function as personal AI hubs.

That could create new opportunities not only for Apple but also for software companies seeking to build ecosystems around AI-native computing.

For Perplexity, this strategy also means expanding beyond its roots as an AI-powered search engine into a broader platform designed to compete for users’ daily workflows. By promoting Personal Computer through influential technology creators, the company is attempting to position itself at the center of the emerging agent economy.

The move comes as rivals race to build similar capabilities. Companies such as OpenAI, Anthropic, and Google are all developing increasingly sophisticated AI agents capable of carrying out tasks rather than merely generating responses.