Wolfe Research published a note explaining that SpaceX has a competitive advantage in the rocket launch business because it can launch rockets. The firm calls this a "moat." Analysts spent months arriving at the conclusion that other companies cannot easily replicate the thing SpaceX does because building rockets is difficult and expensive.
The valuation is "out-of-this-world" according to Wolfe. Not stratospheric. Not astronomical. Out-of-this-world. Someone got paid to write that.
SpaceX has a near-monopoly on launch services. This shocked precisely nobody who has looked at the launch services market for longer than eight seconds. The company launches rockets cheaper and more frequently than competitors. Competitors include Boeing, which recently struggled to return two astronauts from space on schedule, and Blue Origin, which has been promising an orbital rocket since the Bush administration.
Retail investors reading this Wolfe note will now buy shares in companies that rhyme with SpaceX. They cannot buy SpaceX directly because it is private. So they will purchase whatever space-adjacent garbage trades on the Nasdaq. ETFs with "space" in the name will see inflows. Someone will buy Virgin Galactic again. That company's business model is selling roller coaster rides to the edge of space for people who have exhausted every other way to feel special.
The moat metaphor fails immediately when you realize SpaceX does not need a moat. It needs everyone else to stop building drawbridges out of wet cardboard. Competitors are not storming the castle. They are showing up with blueprints they downloaded from a website that gave their computer a virus.
Wolfe Research has identified that the company good at thing will continue being good at thing because other companies remain bad at thing.
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