Pythia Cap
Equity Investing & Market Satire
STMicroelectronics is a cheap option on SpaceX taking off in both neocloud and space, since its LEO business, about 10% of sales, supplies all of Starlink. At under 30x 2027 estimated earnings, it also brings full analog and power-semiconductor exposure, and those power semis are its link to the neocloud side. x.com x.comÂ
STMicroelectronics supplies key chips for Starlink satellites and terminals, so more SpaceX launches mean more demand for STMicro. Space and semiconductor themes are converging in the stock, which is emerging from a 26-year base with accumulation, and the market is likely starting to price in the SpaceX IPO narrative. x.comÂ
STMicroelectronics is a cheap way to play SpaceX, because it sits where satellite builders spend their money: if SpaceX has to make a million satellites, STMicroelectronics has to make a million ways to connect them. Rocket Lab, AST SpaceMobile and SpaceX are all in a land grab for spectrum and satellites, and all three may win, but each is oddly priced like a trillion-dollar startup. x.comÂ
STMicroelectronics has more upside than Infineon, though it is priced accordingly. It leads in space by selling RF chips for Starlink terminals, 60% of its data-center revenue comes from optics and microcontrollers rather than power chips, and it makes its own substrate wafers in Sicily while Infineon outsources. Infineon is the safer play: STM's margins fell to zero in the last trough versus Infineon's steady 10%, and competitors may take some of its Starlink business. x.com x.comÂ
STMicroelectronics is a European growth stock for the long-term space trend as a chip supplier to SpaceX and Tesla. It delivers more than 5 million chips a day for Starlink, needed for the phased-array antennas in its terminals, and has over 40 years of expertise in chips that withstand cosmic radiation. x.comÂ
STMicroelectronics offers rare asymmetry for a large cap: a bear case in line with the S&P 500, a slightly better base case and a wildly better bull case. 2026 marked an inflection in its data-center business, with a multi-year, multi-billion-dollar Amazon agreement and guidance raised from $1B before 2030 to well above $2B in 2027. A base case with a modest AI business implies 15% annual growth through 2030; if photonics, power and robotics reach a third of revenue, 30-50%. x.com x.com x.comÂ
Voyager Technologies looks particularly interesting as a picks-and-shovels supplier to the space economy. At a $1.5B market cap, it builds propulsion, missile defense, spacecraft electronics, space intelligence and agentic AI, stations, lunar infrastructure and orbital computing; it partners with Palantir and Anduril. Rocket Lab, AST SpaceMobile and Voyager could be like Apple, Microsoft and Intel in the 1980s: their value in two decades matters more than in two years. x.comÂ
SpaceX's near-monopoly in global satellite internet, built on reusable rockets, should generate enormous cash flow to partly fund its AI compute buildout. Those cash flows should strengthen its credit profile and let it finance the rest more cheaply than pure-play neoclouds CoreWeave, Nebius and IREN, which SpaceX makes obsolete. Grok ensures deployed compute earns revenue if customers back out. There is no reason to own a pure-play neocloud when SpaceX is available. x.com x.comÂ
SpaceX's revenue ambitions look implausible against current sales and the risk of overbuilding chips. Revenue is $14 billion this quarter, and even the Street's $120 billion forecast for next year looks aggressive. Its costs are within its control, leaving the risk heavily skewed against investors. x.comÂ
SpaceX's neocloud-driven valuation is vulnerable to short-notice compute contract exits. Losing contracts with 90-day out clauses could cut $500B from its valuation; at least one out clause appears to be coming in 2027 rather than 2029. Neocloud expectations drive 80% of its current valuation, despite earlier fundraising on Starlink, reusable rockets and Mars. What happened to Amazon in 2000-02 is about to happen to SpaceX by 2030-32. x.com x.comÂ
SpaceX's planned tenfold neocloud expansion and tightening financing could pressure Nebius. Musk says debt markets have nearly shut for companies without substantial non-AI-data-center revenue, implying consolidation among the 200-plus neoclouds. Nebius looks less appealing than SpaceX, and picking a battle with Elon is not attractive. x.com x.comÂ
