SpaceX, Iran, and the Federal Reserve | The Trillion-Dollar Intersection

In this episode of Being Exponential, Luke Lango breaks down the biggest stories shaping the future of AI, technology, and financial markets: the historic SpaceX IPO, the evolving U.S.-Iran peace negotiations, the Federal Reserve outlook, growing government involvement in frontier AI models, and the return of SaaSmageddon.

We start with the blockbuster SpaceX IPO and what it means for the future of the space economy, Starlink, AI infrastructure, orbital compute, defense technology, and space stocks. Is SpaceX becoming the next trillion-dollar platform company?

Next, we analyze the latest developments in the U.S.-Iran peace process, the impact on oil prices, inflation, Treasury yields, and Federal Reserve policy, and what lower geopolitical risk could mean for growth stocks, AI stocks, and the broader market.

We then dive into reports surrounding government scrutiny of Anthropic's frontier AI models and discuss the broader implications for OpenAI, Anthropic, AI regulation, national security, and the AI arms race. As governments increasingly view artificial intelligence as critical infrastructure, how could regulation shape the future of AI investing?

Finally, we revisit SaaSmageddon. With AI agents, large language models, and next-generation AI platforms increasingly disrupting traditional software businesses, Luke examines whether the long-feared collapse of the SaaS middle layer is accelerating—and which companies stand to win or lose in the next phase of the AI revolution.

From SpaceX, OpenAI, Anthropic, AI stocks, SaaS stocks, inflation, interest rates, and geopolitics to the future of exponential technologies, this episode connects the dots on the trends driving markets today.

🎧 Subscribe to Being Exponential with Luke Lango for weekly insights on AI investing, tech stocks, macroeconomics, space technology, and exponential growth opportunities.

Transcript

SPEAKER_00 0:00

Hello and welcome to Being Exponential. Today we are diving into a couple of topics, but we're going to start off with the SpaceX IPO. Now, Luke, already it was the biggest IPO in history. It raised around $75 to $80 billion. We started at around $2 trillion. The stock itself has shot up about 40%. Phenomenal opening.

SPEAKER_01 0:42

Let me get to the headline bit. What you want to do is I think you want to ride out SpaceX stock probably for another month. And then you probably want to sell SpaceX stock before some log-up explorations. And then you want to shift back into the other space stocks for probably the next six months or so into the end of the year. And then once all the shares on SpaceX hit the market and you have a full float, then you want to balance out and you want to have a very balanced portfolio of space stocks across the board. So that's kind of like my, you know, if I look out the next three, six, nine, twelve months, what I would do with the SpaceX IPO and the stocks surrounding it or the stocks and the blast ratings. Because what's happening in the short term is you're getting just a mechanical uh supply-demand imbalance uh in SpaceX IPO, which happens with all IPOs, because when a stock IPOs, most of the shares are locked up. And what that creates is a very small float, a small number of shares that you can trade. If you compound a bunch of demand for those shares on top of that limited supply, you obviously create a massive supply-demand imbalance, which yes, pushes the share price higher. That's what's happening right now, because only about five, six percent of uh SpaceX shares are tradable right now. That's gonna change over the next three, well, over the next six weeks, but it'll continue to change between August and the end of the year. That's when a whole bunch of shares over different tranches get unlocked. Now, typically what happens with IPOs is you get this mechanical bounce. And then as shares come online over that kind of one, two, three, four, five, six-month window, that's when you get a big retreat in the IPO. Something similar will probably happen with SpaceX. So I could see the SpaceX IPO. We're around 220 right now. I could see it going to 300, 350 in the short term, as crazy as that seems. I think the mechanics are there for that. And then it probably retraces. I wouldn't be surprised if it retraces all the way back to its $135 IPO price at some point in the second half of this year. And that's going to be a really, really great buying opportunity in SpaceX because the long-term fundamentals are highly supportive of a multi-trillion dollar company. When I say multi-trillion dollar company, I don't mean two, three trillion dollar company. I mean $10, $12, $15 trillion company. And I think the key to understanding that long-term valuation target, a lot of people want to talk about Mars. I'm not going to talk about Mars. A lot of people want to talk about the moon. I'm not going to talk about the moon. A lot of people want to talk about point-to-point space travel. I don't want to talk about point-to-point space travel. I want to talk about orbital compute. I think orbital compute alone is worthy of a $10 trillion plus valuation on SpaceX. Because I firmly believe that the economics are supportive of orbital compute being the more attractive AI compute option over terrestrial compute, probably by the early 2030s, if not by 2030 itself. Because of the fact that as we kind of touched in the last touched on in the last podcast, terrestrial compute costs are constrained by resources. Orbital compute costs are constrained by technologies. Resources, those costs do not go down over time. They go up over time. They are inflationary. Technology costs are disinflationary, deflationary. They go down over time quite dramatically. So if you have one, if you have option A follows technology costs and option B follows resource costs, and inevitably at some point in the future, option A will be cheaper than option B. That's what we have with orbital compute and terrestrial compute. And based on our modeling, we think that crossover happens at some point in the 2030s, if not by 2030, led mostly by a drop in launch costs, which itself will be led by the Starship reusable rocket. Once you get reusable rockets and you don't need to pay for a new rocket every time to launch a data center into space, all of a sudden economics become very, very, very attractive. So if you do believe that, which I do and I think most people should, then you start to understand SpaceX is the gatekeeper to creating the most valuable infrastructure asset in humanity, which is AI compute. And everybody's going to be racing to use SpaceX to get data centers into space. And that means lots of revenue, lots of demand, and whatever prices they want with massive margins. And yes, that's how you can get a trillion dollar revenue company with several hundred billion dollars in EBITDA. That in and of itself is worthy of a $10 trillion plus valuation. And I'm not even talking about Starlink. I'm not even talking about um, you know, Mars or all the other more ambitious stuff out there. I'm just talking about orbital compute. So that's why long term, this is a winner. But in the short term, be wary. I would like to buy it on a dip once more shares come online.

SPEAKER_00 5:41

Or that. Yeah, well, I mean, since we're already on top the topic of space and you know, what feels like sci-fi, it's it's almost easy to just paint the picture of Tesla coming into the fold of these companies, and then you have Optimus coming online, and then you could imagine Optimus robots are powered by Starlink via the orbital compute from SpaceX. So $10, $12 trillion, it might be a drop in the bucket theoretically, right?

SPEAKER_01 6:08

Not a drop in the bucket. That's a third of the US economy. That's not a drop in any bucket. Um, we're talking a whole ocean of value there. But yes, Tesla and SpaceX will combined. I think that's also inevitable. Um, so Evan had the again, if they had the outlook for SpaceX, what's gonna happen is it's gonna run to 300, 350 in the short term because of the mechanical dynamics. And then, you know, as these lockups expire and you get all these new shares, you're gonna drop down back to the IPO price. That's gonna be a great buying opportunity in the second half of 26, because then in 2027, Elon's gonna announce a merger between Tesla and SpaceX, call it Elon Co, Elon Empire, whatever. And then boom, boom, boom, boom, boom, we're off to the races, and we're you know, we're up up and way again in the stock. So that's why I'm really bullish on buying the SpaceX IPO or SpaceX stock itself, rather, uh, at some point in the second half of this year, as once we take that big dip as new shares come online. In the meantime, I think the trade is to rotate, as we kind of implied in our last video, is to rotate back into the other space stocks that a lot of the space stocks Rocket Lab, AST, Space Mobile, Planet Labs, Black Sky, Redwire, they soared in the weeks leading up to the IPO as proxies for SpaceX. They allowed you to get space exposure, SpaceX exposure. But once SpaceX became public and the real thing was available, people have ditched the proxies to buy the real thing. Now I think you get a rotation back into the proxy. So the proxies, they're more than just SpaceX proxies. AST Space Mobile is a legitimate, very strong business in the space economy. So is Rocket Lab, so is Planet Labs, so is Redwire. And so I think you're gonna get a rotation back into these stocks. Most of them, as we talked about in our last video, fall into very attractive technical support levels. The valuations are very attractive relative to SpaceX, and I think these stocks do bounce back. So I think that's the trade right now. Ride SpaceX for a little bit longer, but then as we get closer to August, rotate out of that, buy the dip in the other space stocks, ride those in the second half of the year, and then buy the dip in SpaceX once it comes back uh towards the IPO price.

SPEAKER_00 8:10

Excellent. Okay, uh want to move into uh the next topic. And now I think the SpaceX IPO is a factor in um the overall sentiment shift that we've seen in the market. And this this topic itself, the US Iran peace deal, was almost 180 in how we looked at the market. So it we got a decrease in oil prices, and then the fears of inflation and higher rates, uh hiking rates, almost went away. Um, so can you speak to how we can uh be looking at the markets on in a macro sense with this uh peace deal and the current fit outlook?

SPEAKER_01 8:45

Yeah, I think the macro setup is just super attractive right now. I think it's really, really, really attractive because the headwinds, I mean, just if you look at Q2, that was a that was a tug-of-war between really strong AI fundamentals and really choppy, uh inconsistent and volatile geopolitical and macroeconomic fundamentals. Uh, and I think that that changes in Q3, and what changes is not the good side of the equation, not the good side of the tug war. The AI fundamentals remain as strong as ever. What changes is the bad side of the tug war. It disappears and becomes a tailwind. The Iran war is effectively over, it's completely winding down. As part of that deal, Iran purportedly, according to the Wall Street Journal, is going to be allowed to sell oil on the global market. So that's gonna be a brand new supply of a bunch of oil on the global markets. And now you're seeing oil down to what are we at? We're at $75 a barrel on US crude. Like that's super, super low. We were floating with $100. So, or not floating with, we were kind of stuck at $100 and floating with $120, $125 not too long ago. So all of the inflation pressures that we saw, the inflation headwinds that we had in February, March, April, and May well turn into disinflation tailwinds in June, July, August, and September. I think we've seen peak inflation. May was the peak. We got 4.2 on the CPI. CPI in June should be about four. And then I think we fall from there. So we kind of went from two and a half to 4.2. Now I think we go from 4.2 to 2.5. That should create a bullish backdrop for equities. Meanwhile, treasury yields should go lower across the whole curve, but especially on the long end, the 10-year treasury should head lower. We're like for we got as high as 4, 6, 4, 7. Now we're at 4.4. I think we can go back down to four. If we do, massive boost for valuation multiples on high growth tech stocks. So I think that's really bullish as well. The Fed's gonna start talking about cutting rates again, right? There was all this talk about are they gonna hike? Maybe are they gonna hike, are they gonna hike, are they gonna hike? No, now they're gonna actually are they gonna cut? Are they gonna cut? So are they gonna hike becomes are they gonna cut? And that's gonna be bullish for stocks. So the macro geopolitical backdrop, I think, is is very much improving. Uh, it was very chompy in Q2. I think it's very constructive for Q3. And then I also believe that the IPOs that are happening, there was a lot of worry out there that the SpaceX IPO will be this massive retail dump, but it's turned out not to be. Now, it's not to say what it's going to turn into, but at least as of now, it's turned out not to be a massive retail dump. And I think that provides some bullish sentiment for the anthropic and open AI IPOs. Remember, SpaceX is the first of three major, likely trillion dollar IPOs here in 2026. We cleared the first hurdle, more or less, and that gives the market confidence that we can clear the second and third hurdles. And so I think we build some bullish sentiment going into those IPOs as well, which I think will happen in the fourth quarter of this year. So, against that backdrop, things just look really constructive. Dips are buying opportunities. I think stocks continue to push higher.

SPEAKER_00 11:46

Excellent. So that was a great segue onto the next topic we wanted to talk about is specifically the anthropic IPO. Now, in recent headlines, we've seen some back and forth between the federal government and anthropic. We have a frontier model that was too dangerous. Um, I I'd love to get your take on that. Um, I know one of the the current ideas there is that it's it's switched from just being a frontier model, a long uh language model to being integral to uh national security. So I I'd love to get your read on that, on how that will affect the market going forward.

SPEAKER_01 12:24

Yeah, I mean, you said it, right? You said it. This is the that was the clearest signal yet that we have crossed the Rubicon on AI from important technology, cool and important technology, to critical national infrastructure. Right? AI is becoming critical national infrastructure, it's becoming institutionalized. And institutionalized arms races, they don't get defunded because the economy hits some wobbles, or because consumers stopped spending, or because credit dries up a little bit, or there's some cracks in the credit market, they get scaled out regardless of broader macro, not regardless of all broader macroeconomic um situations and circumstances, but regardless of stuff on the margin. And I think that was the big concern is that the peak AI capex fears made some sense because if you look at the macro picture, nothing the way I like to think of it is nothing broke, but everything was on the edge. That if if we were in a China shop, to use the analogy, all the China was sitting on the edge. Nothing had fallen over and cracked and broken and created a mess, but everything was on the edge at the same time. Whether we were talking about the private credit markets with software and the write downs there, or consumer sentiment all-time lows and consumer spending slowing, or savings rates getting wiped out, or all of these risks were kind of building. None of them had fallen over into something that was actually going to impact the AI trade or the AI boom or AI spending momentum, but all that was at risk of doing so. We can now somewhat at least push back those risks, that China comes a little bit back from the ledge by institutionalizing the stuff, by making it a critical national infrastructure. Because once you make it that, stuff at the edge, stuff at the margin doesn't break the trade. You need all of these cups to fall over at the same time for the trade to break now. And I don't see that happening. And so I think risks get mitigated when you institutionalize. And that anthropic news is the biggest signal yet. It's becoming institutionalized. So it is a massive bullish signal, in my opinion, for the AI infrastructure trade. Uh again, SMH is the way to play it, the Van Eck Semiconductors ETF. Like that thing just keeps ripping, and every time it drops, you just buy the dip and it keeps on going up. Like, so that is the trade that will remain the trade. I'm super bullish on that. I don't see that changing at least for the next, you know, six to twelve months.

SPEAKER_00 15:04

Excellent. So I have a follow-up question there. So China is really in earnest starting to get into the data center trade, the AI infrastructure trade. We we heard reports about $300 billion in spend, and we know we're seeing more and more headlines about data centers going online. There was one that is in the ocean and then it's cooled via uh wind energy or something along those lines, right? So it uh the comparison I would make here is the space race via you know the USSR. And with that, you know, potentially being the case, are there any particular plays that you think might have the highest torque if we get into this head-to-head race with China uh for you know the AI infrastructure play?

SPEAKER_01 15:49

Yeah, you're you're not thinking big enough. It's not the space race, it's the Manhattan Project. Right. You're not thinking big enough. The space race was peanuts compared to this. This is in the same way that whoever got the nuke first in the 1940s, won World War II, and therefore established global supremacy for the next hundred years. Whoever gets to true dominant AGI first here in the 2020s, or perhaps the 2030s, I think it happens in the 2020s, though, uh, will secure global uh dominance for the next at least hundred years, if if not longer. So it's very important. It's very, very important. What are the AI infrastructure plays? The same ones that we've been pounding the table on forever. Like, honestly, that the trade is do not overcomplicate this. This is arguably the most lucrative, yet simultaneously the simplest trade in the history of Wall Street. I have never, and in my time of doing this, I've never seen a more simple trade last for as long as this one has and still have durability from here. Like the trade is so simple. The biggest companies in the world, the most well-funded companies in the world, the most powerful companies in the world, as well as the biggest governments in the world, are writing massive check after massive check after massive check to a certain subgroup of companies, AI infrastructure suppliers, to build AI infrastructure. So buy the companies that are getting those checks. That's where the growth is. That's where it's happy. We just had the best earnings season of all time. The Q1 uh earnings season was just ridiculous. 30% EPS growth in a non-recessionary time never been done before. Who led that? Why did we get that? How did we get that? The companies on the receiving end of those checks. So don't complicate this trade. Buy AMD, buy Intel, buy Marvell, buy Broadcom, buy Arista Networks, buy Applied Materials, buy Lamb Research, buy uh Coherent and Lumentum, buy Corning, buy Teradyne, or more easily, buy SMH, buy that semiconductor ETF. That's just the way to play it. It's that simple. Don't overcomplicate things. And every news headline we read about it getting institutionalized, or Google's putting $1.5 billion in a data center in Alabama, uh, Amazon's spending billions in Missouri. Um every headline we read about that stuff is just another reason to get long the AI infrastructure trade. At some point, that will break. But I read this, I read the headlines on this all day long. This is all I do. And I'm not seeing a darn lick of evidence that it's gonna break anytime soon. Now, these things can change on a time. When they change, I'll let you guys know. But as of right now, I'm not seeing anything to tell me getch this trade. I'm seeing everything that says buy every different trade.

SPEAKER_00 19:02

Excellent. Agreed. Yeah, I mean, still AI with AI. Uh, and now on that topic, uh, we want to revisit the Sass Miguel and the SAS Pocalypse. And I want to revisit it uh with something that I've personally, something I've personally seen in the you know, the media I ingest is I've been getting a ton of ads for ServiceNow, but specifically ServiceNow's AI agent. Um, so I I I'd love for you to uh revisit SASPocalypse, but with that in mind, listen, Agentic AI is having a moment.

SPEAKER_01 19:42

Um, I think Ad Yen launched agentic AI features. Was it Shopify that maybe launched agentic AI stuff? Agentic AI is having a, and that is a massive risk to IGV, to the software sector, that ETF, to software stocks in general. Um, we are shifting from generative AI, training AI, to agentic AI, inferencing AI. And what that means is we are now getting AI that can autonomously do work, do things, perform tasks. What do software companies sell you? They sell you software that can do tasks, that can do work. So if that software is gonna cost my company a thousand dollars and chat GPT is gonna charge me $20, then Sayonara $1,000 software, hello chat GPT, hello anthropic. And that's exactly what's going on. And I think that you know, software stocks, they had that big bounce, but now they're fading. IGV is giving back some major gains. Um, the companies that are reporting in this space, they're not seeing much positive reaction from the market. A lot of software stocks are still at 52-week lows. A bunch of that that rally in the IGV was driven by more kind of the premium AI names like Microsoft. Um, Salesforce doesn't look too good. Into it doesn't look too good. Adobe doesn't look too good. Um, a lot of these names still look pretty pretty ugly, actually. Um, the cyber names are different. I like the cyber names um because I think there's a unique moat there. So I just think Sass Mageddin, um, it's gonna come in in fits and starts, it's gonna come in waves. There's gonna be times that people are all worried about it, and times that people are not worried about it. But long term, I think people should be very worried about it. And I would not buy into bounces, I would fade bounces in IGV and software stocks. Some will make it, absolutely, but most will not. And uh and the flip side of this coin is agentic AI inference um infrastructure, right? If you really want to get into you know the infrastructure trade, like wait, it's a big broad trade, right? Like there's a there's a bunch of little subverticals to the infrastructure trade. What's gonna be the highest growth one? Well, I think agentic stuff is gonna be the highest growth, right? You want to find the stuff that is powering agentic AI, powering that agentic commerce, powering these agentic workflows. And really critical to that is networking. Um agentic AI, by definition, is like multi-step workflows. So that means GPUs communicating with each other instantaneously. The communication becomes key, the connectivity becomes key. That becomes the bottleneck. So we're talking optics, we're talking copper in some cases, we're talking connectivity and networking and switches. That's Arista, that's coherent, that's Credo, that's Lumentum, that's Corning. These are stocks that I really, really like right now. I think there's some applied opto electronics. That one's kind of been pretty choppy. I think that choppiness is an opportunity. So I really like that specific subvertical of the um infrastructure trade because of the emergence, or rather, the successful emergence of agentic AI as a risk to software, but a boon to these agentic infrastructure names.

SPEAKER_00 23:18

Excellent. All right, Luke. Um, I feel like that's a great place to end it. Uh, this episode ran a little bit longer than we've been aiming for, but it's just been a lot going on in the markets, and we want to make sure we covered it all. Uh, please like, comment, subscribe. We will be getting to those questions in a future episode. Um, outside of that, uh, hope you take care. Have a great week.