Prof G Markets - Nvidia Hits $4T, Yaccarino Steps Down from X & SpaceX Eyes $400 Billion Valuation

Episode Date: July 10, 2025

Ed breaks down how Nvidia became the first company ever to reach a $4 trillion market cap. Then he and Scott share their thoughts on why X CEO Linda Yaccarino is stepping down. Finally, Ed unpacks SpaceX’s latest move to raise funding at a $400 billion valuation. Subscribe to the Prof G Markets newsletter Order "The Algebra of Wealth" out now Subscribe to No Mercy / No Malice Follow Prof G Markets on Instagram Follow Ed on Instagram and X Follow Scott on Instagram Learn more about your ad choices. Visit podcastchoices.com/adchoices

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part about pizza? No Nazis. Money markets mad. If money is evil, then that building is hell. The show goes on! Welcome to ProfGMarkets, I'm Ed Elson. It is June 10th. Let's check in on yesterday's market vitals. The major indices rose, shrugging off Trump's latest tariff letters to countries including the Philippines, Iraq and Brazil, investors were more excited about a rally in Big Tech which pushed the Nasdaq to a record

high. Bitcoin also hit a new record, surpassing $112,000 for the first time. Meanwhile, treasury yields fell after a successful $39bn sale of 10-year notes that eased bond market jitters. Ok what else is happening? Nvidia became the first company in history to hit a $4 trillion market cap. The stock jumped around 2% breaching $4 trillion before it came back down and closed at $3.97 trillion. Just two years ago the market cap was less than 600 billion. And since then, the stock has risen more than 500%. Just remarkable. To put that in perspective, the value Nvidia

has added in the past two years is actually greater than the current market cap of Apple. So this is a very historic moment. First company to hit a trillion dollars was Apple. The first to hit two trillion was also Apple. The first to hit three trillion was Microsoft and now Nvidia is the first one to hit four trillion dollars. So it's a big moment for the company, a big moment for AI which is essentially carrying the stock market right now. Nvidia makes up 7% of the S&P at this point. It's up 74% since April.

So when you're looking at your portfolio right now and things look good and they do, just remember as with last year, you have AI to thank once again. Once again, this is the year of AI or at least it is so far Let's bring in Gill Luria head of technology research at da Davidson Let's see what he makes of this four trillion dollar milestone. They deserve it Nvidia has created a tremendous amount of value in the economy in the stock market

of value in the economy, in the stock market, to its employees, to its shareholders, to Microsoft shareholders, to OpenAI shareholders. And they have the largest contribution to the AI revolution. Combined with OpenAI, they are probably the two companies most responsible for all the innovation and breakthrough that we've had. So it's very fitting that they would be the first ones to hit a milestone. NVIDIA's had an insane run up so far. It's up more than a thousand percent

since the beginning of 2023. Do you think it can maintain that momentum or will it run out of steam at some point? So the company's actually trading at a relatively similar multiple than it was trading before the AI breakthrough. Let's not forget that it's a huge market that was created out of nothing two and a half years ago.

There was a big data center hyperscaler market that Nvidia was the leading supplier to before generative AI broke through. That supported the valuation they had up until the end of 2022. But this big incremental market of AI compute and the chips that facilitate AI compute has added so much revenue and profitability to Nvidia that that explains the entire appreciation of Nvidia's stock price. So it's very well justified based on where we are today. Going forward is always a different question. Nvidia will not be able to continue to grow the growth rates that it had so far.

In fact, it's much more realistic that the growth rates next year will be more in the 15 to 20% range. And there's also a really big swing factor around China that we have yet to fully digest. But either way, law of large numbers, the market is now for the deployment of AI data centers is somewhat plateauing. The growth rates will not be the same, not to mention the fact there's going to be increased competition. And so going forward, it may be a different story than we've had over the last two or three years.

That was Gil Luria, head of technology research at DA Davidson. Even at $4 trillion, sounds like he believes we are still not at peak Nvidia, and that this isn't just hype. This is, you know, actual fundamentals driving this valuation. I have to say, I would agree. We'll be talking lots about Nvidia over the next few weeks, but for now, I would like to just take a moment to pay some respect to Jensen Huang, the founder and the CEO of Nvidia, because his story is quite frankly remarkable

and we don't talk about it that much. He was born in Taiwan, later moved to Thailand, and then when he was nine years old, his parents sent him to America to flee the Vietnam War. He went to Kentucky, where he was enrolled in what his family thought was a prestigious boarding school, but it turns out that it was actually a correctional boarding school for troubled children. So he had a really tough time there. He was bullied, he was physically threatened, he was dealing with constant racism, but he did get through it. And eventually he landed his first job, which was washing dishes at Denny's.

That's right, the CEO of Nvidia was originally a busboy at Denny's. In fact, he actually credits a lot of his success to the principles of hard work and grit that he learned working that job. He later got an electrical engineering degree from Oregon State, then he got his masters from Stanford, and then in 1993 with just $40,000 in seed capital, he launched Nvidia. I'm not going to go over the full history of the company, but the long and short of it is this was basically a masterclass in bold bets.

I mean, he started out making chips for video games, which at the time seemed a little bit ridiculous. The gaming industry was kind of just beginning, but no one was taking it that seriously. And then the industry just exploded. So he had a really good run for a few years. And then when that business started to kind of plateau, he decided to make another shift and he got into general purpose computing, which again seemed a little out there at the time.

And then of course, 10 years later, AI happened and the rest is history. So it's just a remarkable story. But before we wrap up, I just want to play you a quick clip of Jensen Huang reflecting on his career and his time at Nvidia. This is from the Acquired podcast. The hosts were asking him about what he would do differently if he had a time machine, if he could go back in time and, you know, maybe start this company all over again.

And this was his response. I wouldn't do it. I know. And the reason for that is really quite simple. Building a company and building a video turned out to have been a million times harder than I expected it to be, any of us expected it to be. And at that time, if we realized the pain and suffering and just how vulnerable you're going to feel and the challenges vulnerable you're going to feel and the challenges that you're going to endure, the embarrassment and the shame and, you know, the list of all the things that go wrong.

I don't think anybody would start a company, nobody in their right mind would do it. And I think that that's kind of the superpower of a entrepreneur. They don't know how hard it is and they only ask themselves, how hard can it be? And to this day, I, I tricked my brain into thinking how hard can it be? I just, I love that response.

I just think we have this, this obsession with romanticizing entrepreneurship and the story, it always sounds so fun and so exciting. And, you know, now we're seeing this big number, $4 trillion. It feels incredible. But I just think it's worth remembering in moments like this, you know, we're only hearing the story once the success has happened. But up until that point, the journey is not romantic at all. I mean, it's hard, it's grueling, as he says, it's just extremely taxing.

And I just think it's notable that when you ask the guy who really reached the top of the mountain, now he hit the pinnacle of capitalism, the world's first $4 trillion company. When you ask him, would you do it again? The answer is no. I'm not sure exactly what to make of that. I still want to work hard. I still want to make a lot of money. But I will say it is certainly something that I'm thinking about,

certainly something that I am carrying with me. And I just think it's a good reminder to keep things in perspective. So we'll be right back after the break with a major leadership change at X. Stay with us. Support for the show comes from Zbiotics. I love a good drink every now and then, but what I don't love is having to choose

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We're back with ProfGMarkets. Linda Iaccarino is stepping down as the CEO of X. With some advertisers returning and the XAI merger complete, she said that now was a good time to step away. She served as the CEO for two years. During that time, she dealt with many challenges, including advertiser backlash over the platform's content moderation policies. Those concerns have not really gone away. Just two days ago, XAI's chatbot Grok posted a series of anti-Semitic posts on the platform.

I'm not going to go over what exactly was said, but it was egregious. Like praising Hitler. No ambiguity with this stuff. So, Linda Iaccarino is out and the big question is why? Why now? You know, it could be to do with the Hitlerification of X's chatbot. That could genuinely be a reason. They really coincided here.

It could be the business. Ad revenue is reportedly down 40% since Elon took over. But I think more likely it's just a combination of all of the troubles that she's had to face as the leader of this platform. And I've said it from the beginning, and Scott said it too, she was never cut out for this. I mean, Linda Iaccarino, you have to remember,

this is a classically educated, traditional media person. This is not like a new media player. She worked at Turner, she worked on Late Night, she worked at NBC, she worked on Peacock. I mean, her whole career before X was basically selling ads for the establishment media. And that is just a completely different ballgame from being the CEO of this terminally online cesspool of edginess that is X.

And let's be clear, like that is what it is. It's kind of a news platform. That's what it bills itself as, but it's mostly a place at this point for memes and hot takes and political arguments. And now after the Elon takeover, Naziism and porn. And that is not an exaggeration. We saw what happened with Grok,

but we also saw multiple of these analyses that found a huge rise in Nazi content and also in pornographic content. That is what this platform is now. So the idea that this seasoned media exec was gonna come in and just do what she did at NBC, that to me was crazy. That was never gonna work. And you could even see it in the way she carried herself on the platform.

I personally cringed every time she posted on X. Because on the one hand, you've got Elon who's shitposting these senators and talking about their private parts. And then on the other hand, you've got the CEO of the company who's talking about like catching the big game and wishing everyone a happy Thanksgiving. I mean, she was posting on X like it was LinkedIn. It was this very traditional corporate approach and it showed us who she is and that is a traditional and corporate executive. And there's nothing

wrong with that. But that is why I never thought she'd lost because when you think about it, in a lot of ways, she was the embodiment of everything Elon hates. I mean, think about why he bought Twitter. It wasn't about free speech or the town square, all the stuff he said. That was BS. The reason he bought Twitter was basically to give a giant finger to the establishment. I mean, he just wanted to say, screw you to the media, to CNN, to the New York Times, to NBC, to Wall Street, to the Democrats. He wanted to say, look how much money I have.

Look what I can do. That's what this was all about. to Wall Street, to the Democrats. He wanted to say, look how much money I have, look what I can do. That's what this was all about. And so to put it simply, that is a very hard thing to sell ads against. And it's especially hard if you're coming from this more traditional establishment background, and then you have to pretend that you're now

this edgy jaded character, and that you believe in all the same ridiculous juvenile principles as Elon Musk. That is a very difficult act to pull off. And that is why I never believed that she was going to stick around. And it is also my personal belief that that is why she left the company this week. But let's hear from Scott. He's been talking about this for a long time. I'm sure he has lots to add. Claire hopped on the phone with him earlier. Hi, Scott. How are you, Claire?

I'm well. How are you? I'm good. So Mr. Big Time doesn't have time for the guy who made his career. It's now you and me. Yeah, that's right. He's too important. So Scott, Linda Jacaccarino is out. I'm sure you didn't see this one coming at all. What are your reactions? Well, it's one of those things that's

so obvious after it happens. I think Musk is becoming a Trump-like figure, and that is very few people, you know, it's like being in the ring with Mike Tyson. It's just very few people leave standing. You know, it's just, it's, in some ways, it's shocking. It took just very few people leave standing. In some ways it's shocking it took this long. She was never really the CEO of Twitter. And by the way, I've always called it and will continue to call it Twitter. She was really just meant to be a heat shield. She was

there to kind of go on an apology tour for advertisers, which she was not very successful at, advertising plummeted right after he purchased it. And I guess it's off about 40 or 50% since they purchased it. Initially she was sort of charged with brand safety. And when you're dealing with Elon Musk and Twitter, which immediately saw an increase in hate speech by 50% that was tolerated, it was like setting up daycare at a strip club. I mean, it was just an oxymoron.

It just didn't make any sense or giving somebody like a flaming bag of raccoons and say, build community now. So she was kind of given, she was given a very difficult job. And also she managed to handle it poorly. I'd be very curious what she does next. I think her brand Attention her brand it'll be a real interesting test of that Umberto Eco. The Italian philosopher said that in our era It's all about awareness regardless of what you're known for. She is now a globally known name

but she's known as an ineffective manager that was basically CEO and name only and It does not have a very good reputation, but at the same time, everybody now in the business world knows who she is. So it'll be very interesting to see if and what her next move is. Right. So just some data, Threads is catching up in terms of daily active app users. It's up 128% year over year to 115 million. Meanwhile, X declined 15% in the same time period,

still in the lead at 132 million. And then Blue Sky is way behind at 4.1 million daily active users. So do you have any predictions for X's future? Will it lose its lead in this market? So it's already lost it. I mean, to a certain extent, the biggest beneficiary of Musk's acquisition of Twitter was meta shareholders. And that is by kind of loosening up or basically getting rid of all content standards, you saw 50% increase, immediate 50% increase in hate speech. Just most recently you had XAI, the kind of the chat bot from Grok,

post very anti-Semitic content, some phrasing Hitler and advertisers. That's just a third rail for advertisers. So effectively this created an enormous opening for threads. I don't think threads would be as big as Twitter and in a year it'll be bigger if it wasn't for kind of the implosion and the white space that was opened up by Twitter basically declaring war on its advertising base. And Elon Musk, who's obviously very intelligent and has an incredible feel for stakeholder value, has decided that the only way to rescue this is to rub kind of AI Vaseline over the lens here and merge it with his AI startup and then do

sort of a kind of a related party transaction that supposedly valued Twitter at 30 billion while valuing his own AI company at 80 billion, which is sort of an illusory mark, if you will. But I would say Twitter as a microblogging platform has kind of already lost at threads. And that is threads should not exist. And it exists because basically Twitter, Twitter screwed up so bad, they created such an opportunity. All right.

Well, thank you, Scott. That's all I've got for you. I'll send your regards to Ed. Sounds good, Claire. Have a good rest of the day. Thanks, Scott. Bye bye. Bye now.

Daycare at the nightclub. I think that pretty much sums it up. Well, we will miss Linda Iaccarino. She was given an impossible job and we wish her the best of luck. SpaceX is planning to raise money by selling insider shares at a new valuation of $400 billion. This underscores their status as the most valuable private company in the world. The valuation breaks the previous record $350 billion which was also set by SpaceX. This company has quickly become the largest source of Elon Musk's wealth, who owns a 42% stake in the business.

The new valuation makes SpaceX more valuable than OpenAI, more valuable than Johnson & Johnson, more valuable than Bank of America, and more valuable than Coca-Cola. In fact, if SpaceX were a public company, it would now be the 22nd most valuable public company in the world. Just incredible. So nothing new here in terms of the business itself, but what we are seeing is a lot of demand for this company in the secondary markets. That demand is continuing to grow.

And there were some questions about SpaceX when this Elon Trump drama started to unfold. Obviously that is putting pressure on Tesla stock, but it should arguably be putting more pressure on SpaceX stock given the fact that SpaceX depends so heavily on government contracts. But this news appears to be telling us actually no. Investors aren't worried about that Trump drama. Tesla investors might be worried. The stock's down more than 20% year to date, but SpaceX investors, they are not worried. And that is why the valuation has increased as of the end of last year,

as of the most recent valuation, 15%. So for more on this, we spoke with Sri Mupiti, a reporter at The Information. I would say that SpaceX and Tesla are different businesses. And I think you see the stock price reflect that with Tesla, particularly because the big, beautiful bill got rid of a number of energy tax credits that initially benefited Tesla. And so while Tesla sales were already softening, I think like this big push big push really, you could see that pressure on Tesla stock. But in terms of SpaceX, SpaceX, as I said, dominates the market for rocket launches and government agencies are less likely to switch. There's just a huge barrier to entry,

huge amount of friction to be able to switch. And then also, because it's been able to diversify into commercial revenue as well through its Starlink business, you really see SpaceX to be more resilient than Tesla. And then I think more importantly is that just in terms of the market, there aren't as many competitors for NASA or the Defense Department to be able to switch to. For example, Blue Origin or Rocket Labs, they just aren't at the level that SpaceX is at in terms of rocket launches or just other capabilities.

And so that's why I think that SpaceX has a advantage in working with their existing set of government contracts versus a government agency, for example, switching away. That was Sri Mupiti from the information, and she makes a really great point. And that is even if you don't want to do business with SpaceX, if you want to go to someone else, you don't really have any options because SpaceX is just completely dominating this industry.

And I think there are some stats here that really highlight the dominance that we're seeing from SpaceX. The first one I would point you to, there were 154 orbital launch attempts in the US last year. And SpaceX accounted for 87% of those launches, 134. That is up from 96 in 2023. It's also more launches than the rest of the world combined. It's all coming from SpaceX. So when it comes to getting payloads out into space, there is simply no question SpaceX is the undisputed number one. They're kind of your only option. So that's one part of the business,

carrying stuff into space. The other part of the business here is satellites or Starlink. And on that side of the business, SpaceX is again completely dominating. Here's the big stat. Of the roughly 10,000 satellites that are actively orbiting the Earth, SpaceX owns 60% of them. And that number is also expected to grow significantly over the next few years. SpaceX is planning to increase their constellation network to 30,000 satellites. We'll see if that's even possible, but that is what they're shooting for right now.

The only viable competitor right now to the satellite network that is being developed by Starlink is Amazon's satellite network, and that is Project Kuiper. And they are making some headway, but you know, you look at the business as of today, they're still not offering any internet service. So it's a very similar dynamic to what we're seeing in the robotaxi industry, where it's kind of portrayed as maybe this competition between Waymo and Tesla. They are the two players in the space. But then you get down to it, you look at the data and you realize only one of them is actually playing here.

In the robotaxi industry, it's Waymo, but in the satellite industry, it is SpaceX, it is Starlink. So I think that would shed some light on the valuation. I think it also shed some light on why investors aren't so worried about what's happening in terms of Elon and his relationship with Donald Trump. It is possible that it's riding on some hype. I think the fact that it is still a private company maybe makes it feel more exclusive. And so maybe you're willing to pay a premium just to be part of the club and it is a pretty cool club, but you also can't deny the fundamentals here.

$12 billion in ARR, the undisputed leader in space right now. They are essentially monopolizing the space industry. That is the reality of the situation right now and it is unlikely that that is going to change anytime soon. Okay, that's it for today. Thanks for listening to ProfG Markets from the Vox Media Podcast Network. I'm Ed Elson. Join us tomorrow for our conversation with David Risher, the CEO of Lyft. It's made to perform in the toughest conditions.

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