SpaceX Goes Public Tomorrow — Look Out Below

Summary

Prof G Markets — "SpaceX Goes Public Tomorrow — Look Out Below"

Episode Date: June 11, 2026
Hosts: Ed Elson (EE), Scott Galloway (not present),
Guests: Gil Luria (GL, DA Davidson), Mark Zandi (MZ, Moody’s Analytics), Alex Heath (AH, Sources Newsletter & Access Podcast)

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Main Theme and Purpose

This episode dives deep into the historic SpaceX IPO, the broader IPO rush in tech and AI, the resulting volatility and capital shifts in markets, emerging signals for a potential tech bubble peak, surging inflation driven by geopolitics and AI, and Apple’s much-anticipated (but disappointing) foray into generative AI. Ed Elson and guests break down why SpaceX’s valuation is so disconnected from fundamentals, what it means for investors, and how recent economic data reshapes expectations for the Fed, all while delivering sharp, no-BS market analysis.

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1. SpaceX’s IPO: Mania, Valuation and Risks

- SpaceX is about to have the largest IPO in history, at a $1.77 trillion valuation—95x revenue—amid massive investor demand.
Discussion Segment: 01:59–12:35

The Elon Effect on Valuations

• Gil Luria: “Elon has this trick… the business he has today, the business that’s coming, and then the big dream business. For Tesla, it’s cars; then robotaxi; then Optimus robots. For SpaceX: now Starlink, soon orbital data centers, and eventually a million people on Mars.” (04:11)
• Luria notes that Musk’s companies “rarely trade on fundamentals,” and that the perpetual narrative of future moonshot businesses keeps valuations lofty.

Is the Valuation Justified?

• Ed Elson: “I think it’s overvalued.” (03:45)
• Luria: “It can trade at 95x revenue. It can trade at 50. It could trade at 150. There’s no rhyme or reason.” (06:13)
• Both caution that the IPO will be volatile, with price swings amplified by lack of comparables and the speculative narrative.

Market Impact and Capital Rotation

• Massive IPOs in SpaceX, OpenAI, Anthropic, Google, Meta, and Oracle are sucking capital from existing tech positions.
  • Luria: “A lot of capital has already been pulled out of the market in order to fund this.” (07:06)

Is This the Top?

• Elson posits that the IPO mania signals a potential tech market peak:
  • “If they’re racing to sell now, that’s because they believe if they sell later, there will be less available capital. It makes me feel a little bit bearish… look out below.” (09:52)
• Luria hedges: “This is a race… If you think that the [capital] cup’s going to run out, you want to be early.” (10:42)
• But, he remains optimistic on AI’s real potential: “As long as [consumers and companies] pay for the tokens coming from these AI models, we’ll continue to see growth.” (11:06)
• Luria refuses to call SpaceX under- or overvalued directly: “I try not to do that with Elon companies because I don’t think their valuation has ever made sense… People are buying a dream and a story and hope—sometimes that works.” (12:09)

Notable Quotes

• GL: “If people are buying a dream and a story and hope, sometimes that works out. It sure did for Tesla holders 15 years ago.” (12:16)

Key Timestamped Highlights:

• [04:02] Elon’s multi-stage vision keeps valuations detached from reality
• [06:06] “No rhyme or reason” to SpaceX’s valuation
• [07:24] Flow of capital out of AI/tech into IPOs
• [09:45] IPO rush as a “race” for limited investor cash
• [12:09] “I try not to do that with Elon companies…”

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2. Inflation, Geopolitics, and the Fed Outlook

Discussion Segment: 12:45–20:43
Guest: Mark Zandi

Hottest Inflation in Years

• U.S. CPI up 4.2% YoY in May 2026, highest in three years.
  • Fuel oil +60%; Airfare +27%.
  • “For the second straight month, real wages fell, meaning prices are rising faster than paychecks.” (12:50)

What’s Driving Inflation?

• Zandi: “The bulk of the inflation acceleration is energy prices, but tariffs, restrictive immigration, and AI juicing demand are all factors… More demand, not as much supply, adds to inflation.” (13:37)
  • The “Iran war” is the biggest factor, but AI is driving electricity and chip prices up.

How Long Does Elevated Inflation Last?

• “If the war [with Iran] is kind of winding down… then the worst of the inflation is behind us. But there’s no going back to the kind of 2% inflation rate the Fed wants for a long time—maybe two years, even if things go well.” (14:52)
• If Iran conflict drags on: possible physical shortages and much higher inflation levels.

Economic Outlook and Fed Policy

• Odds rise for rate hikes in 2026 (50% as of episode).
• Zandi: “If expectations for inflation continue to rise, particularly bond market expectations, then the risk is this inflation becomes more persistent and entrenched, with big implications for the Fed.” (15:52)

Geopolitical Uncertainty

• If the Iran war isn’t resolved soon, “we’re going to start seeing actual shortages… maybe not in the U.S., but in other parts of the world. Traders would conclude this isn’t going to come to a quick end. We got a problem… much higher prices, much higher inflation.” (17:19)
• Zandi believes President Trump will pivot to end the conflict for political expediency: “He’ll declare victory and move on. Otherwise we’re going to be in a boatload of hurt… a recession, stagflation scenario.” (18:37–19:18)

Trump's Comments on Inflation

• Clip played: Trump claims, “I love the inflation… because as soon as this war is over, you know, I can say it now, something he didn’t know. Do you know we’ve been taking out millions of barrels of oil? Nobody knows it… Iran until right now.” (19:36)
• Zandi: “I can’t make sense of it… nothing worse than inflation on every level. It’s bad for consumers, businesses, investors, the Fed. I don’t know, I don’t get it.” (20:10)

Key Quotes

• MZ: “Almost all the scenarios [with Iran] are worse than the baseline: inflation higher for longer.” (15:52)
• MZ: “Otherwise, we’re going to be in a boatload of hurt… stagflation recession scenario.” (19:18)

Key Timestamps:

• [12:45] Inflation surges—drivers and impacts
• [13:37] Multiple causes: Iran, tariffs, AI, immigration
• [15:33–17:19] If Iran war persists: supply shocks, rising fears
• [19:36] Trump on loving inflation—guest reaction

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3. Apple’s AI: Underwhelming Launch and Strategic Implications

Discussion Segment: 22:59–33:08
Guest: Alex Heath

Apple’s Siri AI: Too Little, Too Late?

• Apple unveils “Siri AI” using Google’s Gemini, but product is delayed and not launching in EU/China initially.
• Stock hits a high, then reverses—down 7% post-keynote.

Why Was Wall Street Disappointed?

• AH: “What they showed off is kind of what they showed off two years ago… this vision of a more agentic Siri. They have made a meaningful improvement—this is a more capable Siri—but it’s nowhere near what we're seeing from Anthropic, ChatGPT, Codex…” (25:24)

Integration with Google—But Not a True Gemini Experience

• Siri combines Gemini models with Apple’s own “distillation, post-training, and customization,” meaning the Siri experience is many steps removed from what you get on a Google device. (26:12)

Siri: Still Not Competitive

• “The bar for Siri is so low… I don't trust Siri with anything other than setting a timer.” (28:17, AH)
• Siri now more flexible (Apple can swap out foundation models), but lacks key features such as memory/context retention between sessions—“wild in 2026!” (28:37)
• Apple cares more about privacy and branding risk than bleeding-edge capability.

Apple’s AI Strategy: A Calculated Delay

• AH: “Apple doesn’t have this religious fervor [for AI] the way the labs do. They see it as a tool, as a new technology substrate to build on over time.” (31:38)
• Apple may be content to “wait a cycle or two,” as with iPhones and Macs historically, but there’s a bigger long-term risk if agentic AI disrupts their operating system/services business and hardware moat.
• “Until people stop buying iPhones because of AI, Apple’s going to do just fine.” (30:43)
• Pressure looms as new hardware form factors and AI-driven UX may threaten traditional OS dominance.

Notable Quotes

• AH: “Apple has essentially turned Siri into a harness… the models underneath are flexible and swappable.” (29:16)
• AH: “Maybe they don’t feel like they need to catch up.” (26:58)
• AH: “The new Siri doesn’t have memory… that’s kind of wild in 2026.” (28:43)

Key Timestamps:

• [25:24] Apple’s unveiling: incremental, not groundbreaking
• [26:12] What’s Gemini-in-Siri, really?
• [28:17–28:43] Siri’s user experience still subpar
• [31:09] Apple’s lack of “AI fervor” vs. competitors; patient, cautious strategy

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4. Ed Elson’s Final Take: The SpaceX IPO is a Trap

Discussion Segment: 33:18–34:56

• Direct advice from Ed Elson to listeners:
  • “Do not buy this IPO. This company is dramatically overvalued. This is a rigged game, not rigged in your favor.” (33:23)
• Prediction:
  • “SpaceX stock will immediately explode 25% on debut… because the banks need this IPO to be ‘successful’—they won’t let it fail… However, within six months, probably sooner, SpaceX stock will be cut in half… All the insiders know this. As soon as the lockups expire, you will see one of the largest selling events in market history.” (33:40)
• Message to retail investors:
  • “Don’t convince yourself you can game this. If you buy the IPO tomorrow, you will already have missed the boat.. You cannot win this game. Do not buy SpaceX tomorrow.” (34:46)

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Notable Quotes and Moments

• GL: (On Elon’s company valuations): “I try not to do that with Elon companies because I don’t think their valuation has ever made sense. If people are buying a dream and a story and hope… sometimes that works out.” (12:09)
• MZ: “I don’t know. I don’t get it.” (On Trump’s inflation comments, 20:10)
• AH: “The bar with Siri is so low… to improve beyond that is not a huge bar.” (28:17)
• EE: “Do not buy this IPO… This is a rigged game and the game is not rigged in your favor.” (33:18)

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Key Timestamps

• SpaceX Mania & IPO Volatility: 04:02–12:35
• Tech IPO Rush, Capital Drain & Market Risks: 07:24–11:52
• Inflation Spikes, Fed Outlook, Geopolitics: 12:45–20:43
• Trump’s Inflation Take: 19:36–20:10
• Apple’s Disappointing AI Reveal: 22:59–33:08
• SpaceX Retail Warning: 33:18–34:56

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Takeaways for Investors

• SpaceX’s IPO is a spectacle driven by narrative more than fundamentals; expect volatility and beware the post-lockup drop.
• The “IPO rush” could mark a late-stage cycle in tech, with capital shuffling and possible overvaluation signals everywhere.
• Inflation is high and persistent; geopolitics (especially Iran) and AI-driven demand are pushing prices up, challenging the Fed’s path.
• Apple is cautiously late to AI, prioritizing privacy and brand over state-of-the-art capabilities—potentially risky long-term.
• Don’t chase the hype: retail investors are likely to be exit liquidity for insiders in the historic SpaceX IPO.

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For those who missed the episode, this summary captures all key debates and predictions around the week’s pivotal market moments and gives investors a clear signal about what to watch next.

Transcript

[Ed Elson]

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[Ed Elson]

We all do it.

[Mark Zandi]

You have a night for yourself, but don't like the sound of the silence, so you turn on the TV just for the ambiance. It's a little trick that helps you feel like you've got company and aren't alone. And other insurers, well, they may make

[Gil Luria]

you feel alone, but when you switch

[Mark Zandi]

to Geico, you've got claims reps available

[Gil Luria]

around the clock, so whenever you need,

[Mark Zandi]

you'll have people around to help. And let's turn on the washing machine just for good measure.

[Ed Elson]

Isn't that soothing?

[Mark Zandi]

It feels good to have support. It feels good to Geico.

[Gil Luria]

Money markets matters.

[Ed Elson]

If money is evil, then that building is hell. Welcome to Prof. G Markets. I'm Ed elson. It is June 11th. Let's check in on yesterday's market vitals. The major indices all tumbled more than 1 1/2% after President Trump expressed frustration that negotiations with Iran were taking too long. The S&P 500 hit a five week low and then after hours, the US began striking multiple targets in Iran, at which point the price of Brent crude climbed. Meanwhile, the yield on 10 year treasuries was mostly stable despite the hottest inflation report in three years. More on that later. Okay, what else is happening? It is A monumental week for the AI industry. SpaceX is expected to price tonight and will begin trading on the NASDAQ tomorrow in what will be the largest IPO of all time. Currently, shares for SpaceX are more than four times oversubscribed, implying at least $300 billion in investor demand. Meanwhile, OpenAI filed confidentially for its IPO earlier this week, hot on the tail of anthropic. So very soon, the public markets are going to get an unprecedented look into the business of AI. In the meantime, we got a preview of investor sentiment on AI from Oracle's earnings last night, which sent the stock plummeting 8%. For more on what is next for the AI trade and also his thoughts on the SpaceX IPO, we are speaking with Gil Luria, head of Technology research at DA Davidson. Gil, it's good to see you. An unbelievably important week for the markets here. And I think we got to start with SpaceX, $1.77 trillion valuation. It's priced at 95 times sales. I've made my opinion on the matter quite known to our audience. I think it's overvalued, but I'd love to hear your views.

[Gil Luria]

My view is going to be more descriptive than prescriptive. When I've been following Elon Musk companies for more than a decade and they rarely trade on fundamentals, they rarely trade on the same valuation metrics as other companies. And I've thought about why that is, and I think the answer is that Elon has this trick that he plays. He has the business that he has today, the business that's on the come, and then the big dream business. So for Tesla, the business he has today is selling cars. The business that's on the come is Robo taxi. And then somewhere down the line, there's Optimus robots running around. The equivalence for SpaceX is right now we have Starlink, soon we'll have Orbital data centers, and then eventually we're putting a million people on Mars. Right? And that allows him to get away from having his companies valued on the fundamentals of what he has today, because there's always something bigger coming near term and then something even bigger coming long term. And that's how he does it with Tesla, and he's been successful doing it with Tesla for a long time, and now it seems to be working for SpaceX. Having said all that, I think it's great that you're cautioning people ahead of tomorrow. Buyer beware.

[Ed Elson]

I'm skeptical how many people will actually believe in that. Story and the putting people on Mars, I mean, it's one thing to say we're going to put these humanoid robots into the world, which, by the way, at least they've shown some models of how it would look. But putting people on Mars, to me, it starts to go from optimism to delusion. And I'm skeptical of how many people actually believe this thing is actually going to happen. And I guess my thought is that we're going to see a lot of selling activity, at least when these lockups start to expire. So how do you think the stock will trade over the course of the day and I guess in the next weeks and months as well?

[Gil Luria]

I think it'll be very volatile and I think that's going to add a lot of volatility to the market. Because when you don't have a valuation backdrop, when you don't have comparables, then to your point, it can trade at 9%, 95 times revenue. It can trade at 50 times. It could trade it 150 times. There's no rhyme or reason. It really is about how many people buy into that vision and continue to hold on to that vision. And there's the excitement that we're going to have tomorrow. There's going to be the lockups, very significant lockups after that. There's going to be index inclusions, there's going to be index non inclusions. We should expect more volatility in this stock than anything we've seen in a stock of this size. And again, it's going to also have a big impact on the market. It already has. We've seen a lot of capital taken out of a lot of other technology stocks, a lot of the rest of the AI trade in order to fund this. Because if they're issuing 75 billion and it's four times oversubscribed, that means investors have $300 billion ready to invest. They're not going to get their full allocation, but they have to have it in cash just in case they do. So a lot of capital has already been pulled out of the market and we're going to have to see what happens in order to perpetuate this.

[Ed Elson]

Plus, you've got OpenAI coming up. You've got Anthropic coming up. You've got Google's $85 billion equity offering. You've got Metta supposedly considering a similar thing. You've got Oracle, which we could get into, which just announced a $20 billion equity offering, I believe $20 billion in debt as well. It's starting to get to the point where there is so much stock being issued into the markets, injected into the markets. I'm not totally sure if people even have the money to buy all of this stuff. And if they don't, then they're going to have to sell their exist existing positions. It sounds like you believe that that is what is already happening and that might describe why we've seen some of the drawdowns in some of the larger tech names over the past few days. Is that what's going to happen? And do you think it could get, I guess, worse?

[Gil Luria]

Yeah, there's going to be a lot of sloshing around of capital and the reason is part of the reason. And this is going to happen even More so when OpenAI and Anthropic go public. Because SpaceX is bigger than AI, right? It's about space exploration and expending consciousness into the stars. A literal quote from the S1. But OpenAI and anthropic are the pure plays on AI, the big pure plays on AI. So if so far in the market, you've invested every other way in AI, by buying semis and optical and nuclear and quantum and all these other ways to invest indirectly in AI, now you're going to get a chance to invest directly in AI. And so again, a lot of capital is going to be pulled from the rest of the AI trade into OpenAI and Anthropic. And part of this is a race because you mentioned the mega caps are going to the capital markets. These three IPOs are happening. Each of them wants tens of billions, maybe even $100 billion to raise. There's a finite amount of capital that can come out of everything else. And so to some extent this is a race. I think when we heard OpenAI, what OpenAI said when they filed confidentially is we'd rather stay private, but we understand that we may need to go public, which is code for we may need to beat Anthropic out, or at least be soon after Anthropic, because we don't want them to drive a narrative, to drive how disclosures happen, what metrics get reported. So a rush to capital right now

[Ed Elson]

from all these big players, which implies something which seems to me to be quite important, which is if they're racing to sell now, that's because they believe if they sell later, there will be less available capital and they won't be able to command the prices at which they would like to sell today. So SpaceX seems to have timed it great, but the further you go down, the line. It seems like these CEOs like Sam Altman believe there might not be as much capital available later down the line, which makes me feel a little bit bearish, to be honest. It makes me think that maybe we're at the top. They think that now is the time to sell, clearly, because that's what they're doing. It makes me think maybe look out below. What do you think about that thesis that potentially this IPO race, this IPO mania, could signal the top, at least for the tech sector.

[Gil Luria]

I'm a little bit more optimistic from the overall perspective because I actually think the AI models are very powerful and they're getting a lot better. The folks that have been using Fable from Anthropic over the last couple days are saying that's another big leap forward and we're already getting a lot of good usage from the other AI models. And at the end of the day, this is what matters. Are consumers going to pay subscriptions for AI? Our company is going to pay for the tokens coming from these AI models. As long as that happens, we're going to continue to see growth. What these companies are doing, they're racing to capital. It's not necessarily that they're saying that their valuations are peaking. They're saying what you said earlier, which is if I don't get the capital now, it may not be around later because everybody else will have stood in line first. This is a game of kings and queens. You can't participate in AI without tens of billions and hundreds of billions of dollars. And if you think that the couple's going to run out at some point, you want to be early. By the way, also compliments to Google for, for being early with the very big fundraise this week. And again, I wouldn't expect Amazon and Microsoft to linger in the background. They understand this is a race. They understand that they're starting to exhaust their operating cash flow and and they will need resources in order to keep building the AI compute data centers.

[Ed Elson]

Final question and then we'll let you go. And I don't know if you're going to answer it because you didn't quite answer it before. Do you think SpaceX is overvalued or undervalued?

[Gil Luria]

I try not to do that with elon companies because I don't think their valuation has ever made sense.

[Ed Elson]

Fair enough.

[Gil Luria]

It's never been had anything to do with fundamentals. So if people are buying a dream and a story and hope and sometimes that works out, it sure did work out for Tesla Holders that bought the stock 15 years ago.

[Ed Elson]

It did indeed. All right, Gil Luria, head of technology research at DA Davidson. Gil, thank you so much. Appreciate your time.

[Gil Luria]

Thank you.

[Ed Elson]

Inflation rose 4.2% in May from a year earlier, the hottest reading in three years. Fuel oil is up nearly 60% from a year earlier. And airfare is up 27%. And for the second straight month, real wages fell, meaning prices are rising faster than paychecks. The report has investors rethinking the Fed's path ahead. The odds of a rate hike before the end of the year are now around 50% on Kalshi. Joining us to discuss this inflation report, we are speaking with our friend Mark Zandi, chief economist at Moody's Analytics. Mark, thank you for joining me on the show. It's always good to see you. I guess my first question here, 4.2%, I mean, this number is staggering to me. Seems like it's all Iran. Is that right, Ed?

[Mark Zandi]

Good to be with you. No, it's more than Iran. I mean, obviously Iran's a big part of it. The bulk of the inflation acceleration is energy prices, but it goes to the tariffs. There's still some tariff pass through. It goes to the restrictive immigration policy which is having an impact on different industries and causing sticky service price inflation. And also AI, artificial intelligence. AI is juicing up demand. The data center infrastructure, build out consumer spending because of the wealth effects, but it's not lifting supply, at least not yet to any significant degree. The productivity boost so far has been pretty small, so more demand, not as much supply. That adds to inflation. You could see in electricity prices, you can see it in chip prices. So there's a lot of stuff going on here. Inflation is up for a lot of different reasons, but the bulk of it is the Iran war.

[Ed Elson]

I guess the next question is how long is this going to last? I mean, it's been going up and up and up. If we stick around at 4.2%, I mean, we're over 2 percentage points above the Fed's target rate. This problem only seems to be getting worse. And I think the question on investors minds is how long is this going to persist?

[Mark Zandi]

Well, it does depend on the war, right? I mean, if the war is kind of close to peaking, winding down here and oil prices are not going any higher, they're around 100 bucks a barrel. If that's where they stay, come in a little bit, then the worst of the inflation is behind us. But there's no going back to the kind of 2% inflation rate that The Fed would consider to be appropriate, comfortable for a long time. When I say a long time, Ed, we'll be talking a year from now. Inflation will still be above target maybe two years from now, even if everything sticks to script, including the Iran war winding down. So this is. We may be past the worst of it, but we're not getting back to where we were anytime soon.

[Ed Elson]

Do you think it will get worse? This is the thing that I'm not sure what to expect. I mean, we saw back in 22, we saw a similar thing of inflation kind of ripped back up. It went as high as 8, 9%. It got really bad. I mean, how much worse do you expect it will get in this round of inflation?

[Mark Zandi]

Well, I do expect the president to come to terms with the Iranians and open up the strait and get oil production ramping up, back up again, and oil prices moving south again. So I think that's the most likely scenario. But as you were alluding to, there's a gazillion different scenarios here, and almost all of them are worse than the baseline inflation being higher for longer. The one thing I do think that we need to watch, though, to answer your question, is inflation expectations. If expectations continue to for inflation continue to rise, particularly bond market expectations, then the risk is that this inflation becomes more persistent, more entrenched, and obviously has big implications for what the Fed's going to do. So so far, the inflation expectations, they're on the high side of where I think the Fed would feel comfortable, but they haven't kind of breached up to the upside. But that's something to watch. To answer your question, just to game

[Ed Elson]

theory this out, let's imagine a world where Trump does not figure out how to negotiate with Iran, the strait remains closed, or the situation persists as it is. It's hard to tell whether it's closed or open or who's blockading what point is it's not going great over there. That's all we know. If it remains as is, call it for the next six, nine, 12 months, does the number get worse and worse and worse, or do you expect that it will plateau at some point?

[Mark Zandi]

No, that's a pretty ugly scenario because we're running out of inventories. I mean, global inventories of oil have been significantly drawn down. I think you have to go back to the early 80s to find inventories as low as they are today. And compared to the size of the economy, you have to go back even even further. So there's just no inventory. And if we don't See a resolution to the war. If the strait doesn't open, if production doesn't pick up, those inventories are going to get to a place where we're going to start seeing actual shortages, physical shortages. Maybe not in the United States, because we produce a lot of oil. We produce as much oil as we consume, but in other parts of the world. And I think at that point, traders and everyone else would come to the conclusion that, well, this isn't going to come to a quick end. We got a problem here. We need much higher oil prices to equate to demand with the reduced supply, and that means much higher prices, and that means much higher inflation. And that's a scenario where you do get inflation expectations breaching the upper limits of what the Fed would feel comfortable with. And that's a pretty dark scenario, but clearly a scenario with a meaningful probability attached to it.

[Ed Elson]

In other words, it sounds like almost all of this rests on Trump's ability to negotiate a deal with Iran. It sounds like you are somewhat confident that he will pull that off in the near to medium term. I guess my question is, why do you feel that way?

[Mark Zandi]

Well, you know, the president, you know, whatever you think of him, the one thing you can say is that, you know, he. If things aren't working out in the way he wants them to, he'll pivot 180 degrees, declare victory and move on. At least that's been what he's done so far. So I, I'm applying the same kind of logic to my thinking around what he's going to do here. He's desperately, obviously, trying to figure out a way to wind this thing down to clear victory and move on. So hopefully he finds that sooner rather than later. Otherwise we're going to be in a boatload of hurt. And you know, that the scenario where he doesn't come to terms in the next few weeks, next month or so, you know, that's. That's a recession scenario, stagflation recession scenario.

[Ed Elson]

I personally don't feel so optimistic about it, but part of it is some of the things that he said about. He's not worried about it. And then he also said this thing about inflation. Yesterday, we have a clip of what he said. He was asked about this inflation report. I'm just going to play this clip and I'd love to get your reactions.

[Mark Zandi]

No, I love it. The numbers were great. You know what I really love? I love the inflation. You know why? Because as soon as this war is over, you know, I can say it now, something he didn't know. Do you know we've been taking out millions of barrels of oil?

[Alex Heath]

Nobody knows it.

[Mark Zandi]

You know who doesn't know about it? Iran until right now.

[Ed Elson]

So Trump says he loves inflation because they're taking barrels out. I don't fully understand what he's saying. Is there any way to make sense of what he's saying if you can't make sense of it?

[Mark Zandi]

And I don't think I could, I certainly can't. I'm not sure what he's talking about. I mean, I don't know. There's nothing worse than inflation on every level. I mean, it's bad for consumers, bad for households, it's bad for businesses, it's bad for investors, it's bad for the Federal Reserve Board. It's a lose, lose, lose, lose. So I don't know. I don't get it. But I'm not sure. I don't know that I attach a whole lot of weight to that and say that that's what he actually believes. I'm not sure that's the case.

[Ed Elson]

Okay, Mark Zandi, chief Economist at Moody's Analytics. Mark, thank you for joining us on Prof. G Markets.

[Mark Zandi]

Anytime, Ed. Thanks so much.

[Ed Elson]

After the break, Apple's AI strategy disappoints again. And for even more markets insights, you can subscribe to my weekly newsletter, Simply put@simply put. Prof.gmedia.com. Study and play come together on a Windows 11 PC and for a limited time, college students get the best of both worlds. Get the unreal college deal, everything you need to study and play with select Windows 11 PCs.

[Alex Heath]

Eligible students get a year of Microsoft

[Ed Elson]

365 Premium and a year of Xbox game. Pass ultimate with a custom color Xbox wireless controller. Learn [e-mail] while supplies last ends June 30th terms at aka mscollegepc.

[Sponsor Voice]

Support for the show comes from SoFi. If you're a parent helping your child navigate college, you know just how fast the costs can pile up. Between tuition, housing, textbooks and everyday living expenses, funding higher education is a major financial commitment. That's where today's sponsor SoFi comes in. SoFi offers private student loans that can cover up to 100% of school certified costs, not just undergrad and graduate tuition. But SoFi can also help cover housing, books, food and other education related expenses. SoFi's private student loans are all about flexibility. They offer competitive fixed or variable rates, multiple term options, and monthly payments so you can build around your budget. The application process is completely online and you can check your rate in minutes. And for families exploring their options together, adding a qualified co signer may help improve chances of securing a lower interest rate. And there are zero fees required. That means no origination fees or late fees. No surprises. What you see is what you pay back. Head to sofi.com profgstudent to check your options and get your education funded the Smarter Way. That's sofi.com profgstudent originated by SoFi bank and a member FDIC. Terms and conditions apply. Please borrow responsibly.

[Ed Elson]

Support for the show comes from Odoo Running a business is hard enough, so why make it harder? With a dozen different apps that don't talk to each other, One for sales, another for inventory, a separate one for accounting. Before you know it, you are drowning in software instead of growing your business. This is where Odoo comes in. Odoo is the only business software you'll ever need. It's an all in one, fully integrated platform that handles everything CRM, accounting, inventory, E commerce, HR and more. No more app overload, no more juggling logins, just one seamless system that makes work easier. And the best part? Odoo replaces multiple expensive platforms for a fraction of the cost. It's built to grow with your business, whether you are just starting out or already scaling up. Plus, it is easy to use, customizable and designed to streamline every process so you can focus on what really matters running your business. Thousands of businesses have made the switch, so why not you try Odoo for [e-mail] that's o d o o.com. We're back with ProfGumarkets. Apple has finally shown up to the AI race, but it might be too little, too late. At its Worldwide Developers Conference on Monday, the company unveile Siri AI. The updated assistant will be powered by Google's Gemini. However, Siri AI has no firm release date and it won't be available in the EU or in China when it launches. Apple stock hit a record high during the keynote address on Monday, but it quickly reversed course and since then, shares have shed more than 7%. So here to help us break down Siri AI and what it means for investors, we're speaking with Alex Heath, author of the Sources newsletter and co host of the Access podcast. And Alex has been at the Worldwide Developers Conference. Alex, good to see you. The thing that jumps out to me here is the fact that Apple comes out with this AI product. It was supposed to be exciting, it was supposed to inspire confidence in investors. And the stock has shed more than 7% of its value. So we'll get into that. But what did we learn at this conference and what do we know about Siri AI?

[Alex Heath]

I don't know. I'm not an expert on this. Maybe the reason for the sell off is that this is kind of what they showed off two years ago. If folks remember, they had this glitzy marketing push around what Siri was going to be. There were a bunch of TV commercials. They even got sued over false advertising around this, I believe, and they never shipped it. And I think what we saw, what I saw at Apple when I was there a few days ago, was essentially that vision of a more agentix Siri. They can actually understand and connect dots between data on your Apple device and they have made a meaningful improvement there. Like, there's no question that this is a more capable Siri. Is it anywhere near as capable as what we're seeing from Anthropic? Right, which just put out its Mythos class model fable this week, or where ChatGPT is going and where Codex is going to? No, it's nowhere near that. And also I think people were unclear about the level of integration that Apple was going to have with Google and Gemini. Right. There was all this reporting going into Dub Dub, which is what Apple calls it, dub dub, about how much Google would be powering the new Siri. And it turns out they are. But what Apple's essentially doing is a bunch of distillation on top of Google's models and post training and customization where they can essentially ingest Google's model and kind of do what they want with it. And so it's not like Gemini in the essence of how someone would experience Gemini in a Google Surface or on Android is what's actually underneath Siri. It's actually many steps removed from what you'd experience on a Google Surface, which means that Apple's doing a lot of its own work around that. And I think people are still, you know, skeptical that Apple can pull it together here and whether they can catch up and maybe they don't feel like they need to. That was kind of the message I got from executives there at Apple park was they think it's early. They think all this Asian hype is mostly that still hype, brittle, not really working, certainly not working at scale on a platform like Apple with billions of users. But you saw them take, take, you know, little, I would say, inch forward steps towards a more capable series.

[Ed Elson]

Certainly it seems like Wall street was generally underwhelmed by their AI integration here Which, I mean, at. At the time when AI is everything to investors, that seems like a really bad thing to underwhelm with your AI product release. Was that your reaction? I mean, you say that they made like a meaningful improvement, but did you find it personally underwhelming as someone who covers this stuff regularly?

[Alex Heath]

Yeah. I mean, here's the thing. The bar with Siri is so low. Like, I don't know about you, I don't trust Siri with anything other than like setting a timer. In fact, Siri for me is frequently the thing that I'm annoyed by because it's accidentally sending a text to someone when I don't want it to. That's usually my experience with Siri.

[Ed Elson]

I turn it off. I don't want to use it ever. Yeah, yeah.

[Alex Heath]

So to improve beyond that is not a huge bar. Right. It's like you're not accidentally texting someone. You meant to just say aloud to someone in a room that said they have built this new. I was in this Q and A that Execs did after the keynote, which by the way, Apple's never done. They've never done an on the record press Q and A after a keynote, which I think goes to show the level of concern they had about how all this was going to be interpreted. And they were talking about how the new foundation of Siri is modern, adaptable. They use the word expandable when asked about agents, which I think suggests that they're, you know. Yes, the Siri we're seeing now, this new Siri is not. It's like ChatGPT from two years ago, but the foundation of it is finally a stack that is something they can quickly adapt as they see fit. I saw an investor after the keynote at Apple park who made the very smart observation that Apple has essentially turned Siri into a harness and the models underneath are flexible and replaceable and swappable. Right. Right now it's Google. I don't think it will ever be OpenAI again, by the way. I think that partnership is on the outs. I wrote about that in Sources. But maybe one day it's Claude. Maybe it's one day. One day it's an open source model that they've distilled on. Maybe it's their own fully frontier Apple models which they are still investing in their own models, especially on device. But yeah, they're nowhere near where the state of current AI tools are. Right. The new Siri doesn't have memory. It can't remember things across different convers. It forgets every time which if you're using cloud and chatgpt like we are, that's kind of wild in 2026. And you know, I think that's partly because maybe the technical foundation isn't there, but also because Apple's really concerned about the privacy of this stuff and the branding risk of it. And maybe we'll have a Cambridge Analytica moment around AI. I don't think it's happened quite yet, but I think they're worried about that. And so they're taking small steps, but I think setting themselves up in a way where they could lean in aggressively when they feel like the time is right. I mean, I've said this before, I think on the show, until people stop buying iPhones because of AI, Apple's going to do just fine. And in fact, in meetings I had with executives, they were touting open call driving up Mac mini sales. Right. So they're a hardware layer, beneficiary of AI and agents right now, even though they don't have a great software experience.

[Ed Elson]

Based on what you said about how they're thinking about agentic AI, the how they think they, you said that they think that agents are kind of overhyped right now, or at least it's very early. In combination with the fact that they have come out with what is a largely underwhelming and I would say dumber than average AI product. My takeaway is it sounds like Apple does not take AI very seriously. Would you say that that is a fair characterization?

[Alex Heath]

I think there's nuance. I think they take it seriously, but they don't have this religious fervor. And I use religious intentionally. I think when you look at how anthropic talks about AI, it's almost like they see it as a deity.

[Sponsor Voice]

Right.

[Alex Heath]

I don't think they have this fervor around the technology as this bigger than life thing the way that the labs do. And I think they see it as a tool and as a new kind of technology substrate that they'll build their platforms on over time. But they have the luxury of just kind of watching and learning as people experiment and fail and maybe succeed on the margin on the frontier and they can come in a cycle or two behind, which is for people who study Apple. That's the history of Apple, right? I mean There was the BlackBerry before the iPhone. Right. Obviously PC was quite strong before the Mac. Right. So I think they can wait. But I think the bigger long term risk for Apple if you're thinking about the Stock in like 10 years, is do agents make the concept of an operating system as it exists today. Archaic, Right. Is this services business that is the majority of Apple's margin growth at risk from agents and then potentially new hardware form Factors like whatever OpenAI is going to do with Johnny I. The meta glasses, all of that. Right. And Apple will do glasses. I think they're working on that. I think we'll probably see that next year. But yeah, I think that's the bigger long term risk.

[Ed Elson]

Alex Heath, author of the Sources newsletter and co host of the Access podcast. Alex, thank you so much. Always appreciate your time.

[Alex Heath]

Thanks, Ed.

[Ed Elson]

T minus one day until SpaceX goes public, it will be the largest IPO of all time. A $75 billion offering at a $1.77 trillion valuation. My final message to our listeners before SpaceX starts trading publicly. My final message is, do not buy this ipo. This company is dramatically overvalued. And not only that, this is a rigged game and the game is not rigged in your favor. Here is my prediction for what will happen tomorrow. As soon as it hits the market, SpaceX stock will immediately explode. 25%. Why? Because this is the hottest stock in the world. And because the banks need this IPO to be quote, unquote, successful. Because if it goes badly, then all the other IPOs, like OpenAI, like Anthropic, will be called into question, which will be a huge problem for the underwriters and for the markets at large. In other words, words, the bankers won't let this fail. They have the capital to make sure it won't fail, at least on the first day. However, my other prediction is that within six months, probably sooner, SpaceX stock will be cut in half. Why? Because the valuation makes no sense whatsoever. All of the insiders know this, all of the banks know this. And as soon as the lockups expire, you will see one of the largest selling events in market history. The stock will tank. And you can lock that prediction in for me right now. One final point before we go. Don't convince yourself that you can game this. If you buy the IPO tomorrow, you will already have missed the boat. The stock will pop as soon as it starts trading. And even if it starts to climb throughout the day, the reality is that those returns will be nothing compared to what the insiders have already gained. And spoiler alert, at that that point, they will already be selling. You cannot win this game. You will not win this game. Do not buy SpaceX tomorrow. Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is Dan Shalon, Isabella Kinsel, Kristen o' Donoghue, and Mia Silverio. And our social producer is Jeff Jake McPherson. Thank you for listening to Prof. G Markets from Prof. G. Media. If you liked what you heard, give us a follow. I'm Ed Elson. Tune in tomorrow for our conversation with Howard Marks.

[Mark Zandi]

Formula one so hot right now, it's

[Alex Heath]

like if Traders in Succession had a baby on wheels.

[Mark Zandi]

Teams lying, drivers beefing, celebrities everywhere, and scandals.

[Alex Heath]

Lots of scandals.

[Mark Zandi]

So we made a show about it, the Red Flags podcast, where we recap races and break down all the latest F1 headlines.

[Alex Heath]

But no nerdy tech talk. We only cover the stuff you want to hear about.

[Mark Zandi]

Yeah, and the only thing hotter than the drivers are our takes.

[Alex Heath]

And now we're doing it on Vox.

[Mark Zandi]

Oh, we're so legit now. We're basically thought leaders. TED Talk incoming. And we do a podcast with Gunter Steiner called Venka Hours. I still can't believe that's true. Well, believe it. There is so much for the beautiful Vox Media audience to enjoy. So come check out the Red Flags podcast Every Monday on YouTube or wherever you get your podcasts.