CNBC Halftime Report with Brad Gerstner - June 12th, 2026

Welcome to the halftime report. I'm Scott Wapner. We're here at Post9 at the New York Stock Exchange. We've opened for business in the biggest IPO ever, up about 16% right now. We'll track every single move of it. SpaceX investor, Altimeter Capital founder and CEO Brad Gerstner is with us here. Stephanie Link is as well, Malcolm Ethridge, and Rob Sein. Great to have everybody here. It is a momentous day. The timing of this getting it open before noon, momentous in and of itself. You got a big allocation.

What do you think you're buying into today? What do you feel like you are?

Yeah. You mentioned some very, very big numbers, and this is where the real work begins, right? To try and reach those lofty targets that some have set, including the company itself. A TAM of 28.5 trillion. Morgan Stanley's looking for SpaceX's revenue to reach 3.4 trillion in 2040. Lofty targets, obviously, by Goldman Sachs as well. So now we see what they can do from here, right?

It's probably why, as you heard Sequoia's Shawn Maguire in the interview with our friends in the prior hour, suggest that that massive TAM that I mentioned could be, in his words, an underestimate. This company has the most important mission of any company in history. He said thinking about 10 years from now, I think of it more like Nvidia 3 years ago. High confidence in the explosive revenue growth that they can deliver, and he made the point which was really interesting to listen to, and they can ramp really quickly. To your point, they've already proven their ability to ramp certain parts of the business really quickly, so doubt those large numbers at your own peril, I suppose.

Steph, you're one of the few in our orbit, pardon the pun, who would want in on this IPO. Who said you're going to be a buyer? Are you?

I thought this was going to be up 40 to 50%. Up 20, it's an absolute screaming buy. But I also said you buy a small position, it's going to be volatile, and you just set it and you forget it because he has a great track record. Elon Musk, Tesla was up 25,000% since their 2010 IPO, and that is a big, big number. So who knows what this company is going to do, but a total addressable market even if it's half of the 28.5 trillion that is estimated, that's still huge runway for this company. And founder-led companies usually increase shareholder returns by double.

So you want to own a founder-led company. They have the sense of urgency, and he does. We know that for a fact. The space business, they have a 90% share. Starlink, they have 10 million customers. Brad just talked about the AI opportunity. There's a lot of ways this company can win. They can just win in one of these things. And I think the stock is much higher. You've owned this stock in pretty good size in the private market and in the IPO as well.

We've been participants across our client base. I think this is the most strategically unique asset ever to come to market, and they're going to have enormous pricing power. The one risk is their biggest client, the US government. So when you have that type of pricing power, monopolistic pricing power where your costs are coming in tremendously and your profits are going up enormously, the revenue opportunity and everything that Brad outlined. And by the way, if you can't listen to that and get excited about this business, there's actually something wrong with you. This IPO is the most engineered IPO in history, too. Do you think any of the underwriters are not going to support this? The size of the offering, the retail participation. So there's a lot to be excited about: the index inclusion, NASDAQ 100, right? So much that is supportive here. Now, there is a huge underwriters lockup coming off at some point in the future. There may be an opportunity at some point to be a better buyer. However, I think there's so much enthusiasm around this, and if you're a really long-term thinker and you believe in the visionary characteristics of this man, I don't know how you can't be excited. And I think the writing's on the wall in the road show that this and Tesla could be together at some point in time.

Well, that's the great speculation. And so the stock is up about 20-ish% as Leslie Picker was saying from the trading floor of Morgan Stanley, the sweet spot if you will, and how these things are hoped to trade in their earliest moments of trading. What about you? Interest from you, or no, Malcolm?

No. And I think that Brad framed it perfectly as far as what you should be considering this company to do if you're buying in at IPO. Right. The S-1, the prospectus, told you basically we're an AI company now. Right. The focus, the TAM that they talked about, the 28 trillion dollars, which by the way is the size of the GDP of the entire United States, but that aside, like the TAM is all from AI. It has nothing to do with launching rockets. It has nothing to do with satellite connectivity. And I'm being general when I say nothing to do with, but most of it is hyperscaler capex related to we're building data centers trying to unseat some of the biggest.

Which is funny because now the biggest revenue percentage they get is from the connectivity angle.

Starlink's the biggest contributor today. Not suggesting in any way that that means it's the biggest contributor in the future, because it's obviously in what you're saying is factual, but it speaks in some respects to how this company is transforming itself in real time. Let me finish my thought. What I was going to say is if you really want pure play space, because the name is a little bit misleading now, SpaceX, you could be looking at like an AST that's selling off tremendously today. You could be looking at Rocket Lab, which is selling off tremendously today in response to raising capital to go participate here. Just by comparison, if I wanted a hyperscaler that's building to put AI data centers all over the country and all over the globe, I don't have to pay a hundred times sales to do it. I could look at something like an Alphabet at 10 times sales. I could look at an Amazon at 3 times sales. What about X.AI is so much more valuable, 27 times roughly the value of Amazon at this price point? That's the question I have to be asking.

I'll let you answer that.

She was probably there, you know, at some of the darkest moments of the trajectory of this company, even getting to a day like today. One of the earliest employees, I think Elon said maybe number seven or something to that regard. But if you look at Elon himself when he was addressing his own employees this morning from out at their HQ, the Starbase, he said that 10 years ago, I gave SpaceX less than a 10... I'm sorry, he said I gave SpaceX less than a 10% chance of succeeding at all. That was back in 2002. It speaks to the road full traveled to get to this day. And I'm glad that you mentioned her and the role that she's played, because she's been there from near the beginning to help get this company to this moment.

Well, look at what Wolf is saying today, right? They're one of the early initiators. So the street is sort of starting to weigh in. 175 is their price target. So you're looking at 30% from the set price. We'll obviously see what's happening in the trade here. It tells a little bit of a different story from this moment forward, but they call this quote, 'A launch company wrapped in a telecommunications company wrapped in a hyperscaler. Near zero space launch cost creates one of the widest moats in history that will drive 70% top line growth and near doubling EBITDA margins through 2030.' I mean, they have 90% share in space as I mentioned, but they also have a huge cost advantage because they have reusable rockets and they have scale, so their launch costs with Starship's launch costs are going to go from 14 million to something like 3 to 4 million. That is a lot of operating leverage in one of their businesses, and they could probably get, in terms of Starlink, 250 million customers between now and 2030. That's what's projected. If they get half of that, that's a heck of a lot better than where they are today at 10 million. So to me, yeah, the AI story is interesting and Anthropic and Google certainly make it more interesting, but I think there are a lot of other parts of this company that are very exciting and I don't think it's getting enough attention.

What price though, right? Because I don't dispute anything you're saying about what the future looks like, but for the sake of the viewer, I want to just draw attention one more time to the price we're talking about paying for this. Because this company is coming public and it's one of the top six or seven largest companies now trading. That is massive, and it's also going to have massive implications for the entire market itself going forward the rest of the year. So I think it's really important if you're a viewer watching this and thinking with all of the excitement, have I missed the boat? Do I need to get in on this? Before you open up your trading app and get ready to place that trade, I just want you to think about the price that you're preparing to pay.

Well, I think Brad's made that point repeatedly that the greatest rewards arguably have been realized in the private market to this point. You're paying the valuation you are today on the massive bet that people are making for the future.

Right?

If you don't believe in the future, then you wouldn't buy the stock today. You're obviously making some degree of a leap of faith, which is why the market cap is now above $2 trillion. Now, if Maguire of Sequoia says it's more like Nvidia 3 years ago, is that where we're heading? That's 5 trillion.

When you're getting a lot of comparisons to Meta, another large IPO came public, did what it did, sold off, gave investors an opportunity to get in because of the size, because of the news flow that was around it, because of some of the lockups that came off. What do you think about those types of comparisons, given you're an investor in both, as am I, by the way?

Young Mr. Gerstner sounds like he's well on his way as well, a future guest perhaps of some of the future IPOs. We'll see. The idea that SpaceX and Tesla could one day combine, you put a lot of stock into that.

And there's a debate as to whether, you know, remember Elon has control shares and control of SpaceX. He doesn't in Tesla, right? And so there are a lot of people saying, well, he's going to do it so that he gains control. For most of us as shareholders who want to back founders who have control, I'm actually excited about that, right? I have no problem with Tesla coming in here, maybe at a premium, in order for Elon to consolidate his bets on AI and robots.

Can we speak to the Musk premium, if you will? All of you, really. If you consider how unique this story is and how unique he is as an entrepreneur. He's certainly one of the greatest entrepreneurs and operators, tech technicians, technical thinkers that we've ever seen. If you consider a pioneer in digital payments from way back when, Neuralink, Boring, XAI, he didn't found Tesla, but he joined and sort of took it to another place, obviously. So much of what everybody's going to be buying into today, in some respects, is him. Speak to that.

And by the way, kudos to you for your involvement.

That's fair, but in fairness, we are having a broader debate about immigration in this country. And if you want to cite the fact that he's from South Africa and we need more people of his quality or whatever to come into this country and try and be the next or move the ball of this arena forward, then your message needs to be heard as much in the halls of this place as it does down in Washington, because that debate is fierce right now, as you know, and it's trending in a direction that's not what you hope it would be.

Well, because there's a debate even in itself on H-1Bs. So, correct.

I hear you. But there's a debate in DC about that, too. So it's a complicated issue. I said I didn't want to go down that road, but if you drove the car down there, we were going to go there for a minute. At least get it on the table, because all of these issues matter, and they matter in technology, as all of you know. You all take a break. We'll take a quick break. All right. We'll come back. We'll talk more obviously about the SpaceX IPO. We will talk about what's been happening in technology as well. We're back right after this.

Well, there it was the open at 150.

We can take a look in real time to see what the stock is doing now, but that was just a few moments before 12 noon. We have about a 21.5% gain. So it's really been holding. Again, I just cite what Leslie Picker was reporting earlier, the so-called sweet spot, and this thing seems to be anchored to it. We also noted, you know, guys, what some of the firms on Wall Street are saying now about the prospects for this, price targets. And what I told you that Wolf Research came out with. Oppenheimer did 190 as a price target, outperform. New Street 165. They didn't rate it just a few moments ago. CFRA came out with a sell rating on the stock. That's what makes a market. 115 is the 12-month price target that they have. We'll go through the note a little bit and give you an idea of what they're saying, but they point to the strengths obviously that this company has that have already been identified, but they do have a negative outlook. They have platform optionality, but the investment case increasingly depends on investors capitalizing on outcomes that remain unproven, particularly Starship. I mean, that's the bet, right? You say the targets are huge. No way in heck they can reach them. Sell. You say the targets are huge. Don't underestimate what they've already done. They could easily reach some of these things if they do things that are right. And there in lies the market. I mean, in technology, a lot more money has been lost sitting on the sidelines wringing your hands about all the things that can go wrong rather than betting on the upside, and when you have the single best entrepreneur innovator and company at executing and operating in the history of technology, to me it's kind of a no-brainer to take that bet. And the other thing I note is the downside from 135 was 20 bucks. So really, you're going to sit out on the biggest opportunity in the history of technology perhaps, right? Because you're worried about 20 bucks to the downside. The amount of money that has been lost by very smart people on Wall Street with that exact same argument about Meta, about Alphabet, about every other company that's come before them is a long list. We're sitting here because we're optimists on the future of America. We believe in the future of technology, and again, I don't think you have to rush in today and push all your chips on the table today, but this is one you want to have exposure to. Glad you addressed retail, and Malcolm, I felt like earlier you were trying to speak directly to the retail investor in that cohort who's watching our program today. I wonder what you make of the restrictions that were put around some of the retail investors who wanted to take part in this IPO from a lot of the retail brokerages that were out, and what do you think that means in the greater picture of how we should think about this really important cohort and how they want a piece of the action, they want to feel the excitement that Gerstner does and Ethridge does and Link does and Sein does.

Yeah. So, I think it's a really important distinction that you're making because there's institutional buyers who are going to hold on to this thing forever, right? Their time horizon is forever. And then there's the folks that are wanting to get into it, catch the wave, hoping to be the next Tesla because they missed out on Tesla however many different times it had its pop. And I've talked to you, Brad, off camera several times. I know how you feel about retail investors getting an opportunity to participate in some of these bigger opportunities that we're talking about. But what I think we have to keep in mind is that the get-rich-quick, to your phrasing, is not in this. We're talking about $43 billion roughly was what was raised from all IPOs last year combined, non-SPAC IPOs. We're talking about roughly $200 billion being raised this year between three companies. That is significant. That is going to suck a lot of oxygen out of this market before the end of the year. And that liquidity has to come from somewhere. So, I'm concerned about the retail investors who stand to get crushed by that wave if they aren't careful. If they're trying to get into these for the wrong reason, if it's a quick flip you're after, Fidelity, you're talking about, has restrictions in place about selling the shares within 15 days of the initial allocation. I think SoFi is even more punitive, roughly 30 days. Schwab's the only one I've seen that doesn't actually have a written block against it, but I think they said something like 'we don't want to see it here.' So, there are these mechanisms in place that you as a retail investor need to be aware of. If your plan is not to hold on to these shares for quite some time, you might be better off waiting a month before all the different mechanisms that are in place related to the roll-off of the lockup, NASDAQ buying that's going to happen. There's 4 or 5% allocation of NASDAQ funds that are going to go into this. Like, there's a lot of things that are going to happen that you could wait a little bit. And that's why I said you buy a small position and you set it and you forget it. Because $18 billion in total revenue is expected to go to over $200 billion by 2030. EBITDA, which is interesting to me, profitability, $5 billion to $128 billion. Let's just say what if they just go from 5 to 25 billion? That's still huge in terms of operating leverage. I agree with you. You don't want to day trade this thing. I wouldn't know how to do that. But I do think that the growth is so phenomenal that we haven't seen something like this ever.

Are you buying it, by the way?

Well, I'm restricted today because I'm talking about it, but I will be next week for sure.

I just wanted to make sure we're on the record.

I'm on the record. If I could do it today, I would.

All right. I think the points that Malcolm's making are absolutely true. It does sound smart to paint the bearish case, but rarely are bears proven right. And I'm not saying he's painting a bearish case, but let's remember, this supply is being brought to market. It is significant, but the share buybacks that are happening every day are reducing supply in the market. And if you actually looked at the statistics, large shares are being taken out of the market broadly with the buybacks that we're seeing that are ranging between the 1 and 3% range. So you're creating ample liquidity to be able to buy these. Now you're right in the technology space. I think that's probably why you saw some volatility in some of these other names. Other reasons, of course, moving from cap-light to cap-intensive businesses, which makes no sense to me because if you're a company that believes in your future and you make those investments, they are necessary. Oracle, everybody that is spending money, whether you think it's prudent or not, and Brad, I know we talked about this in late '22, getting Meta right-sized on their spend, but the reality is you can pivot spending, you can't pivot being behind. And so everybody's going all-in right now, and based on the opportunity set, I think that's very logical to be doing.

I've heard this argument before about the idea that the share buybacks are going to help to reduce float and that sort of thing. But I would submit to you that if you look at Google having to do, not having to do but choosing to do an equity raise at $80 billion, you got Oracle doing another $40 billion right after they did $43 billion last year. Or maybe I have it the other way around. Maybe the share buybacks that we're hanging our hats on are going to slow down as we continue to go, because these companies have run out of free cash flow to throw at building these data centers and they're now going to have to raise debt through special purpose vehicles and other off-book financing.

The buybacks that we're talking about that we're banking on should be slowing down this year.

I think you will see it slow down, but that gives me all the more confidence in the infrastructure buildout, picks and shovels plays. The more the capex goes up, the more they benefit. And we're seeing record backlogs. We've been talking about record backlogs at some of these industrials, AI industrial companies, for years, and they're doing quite well actually, and they've held up remarkably well in the face of AI kind of wobbling over the last couple of weeks.

Can I ask Brad a question? How do you think about all the SPVs that have been created to invest in and around this? The venture companies that invested in SpaceX that are in lockups to varying degrees, many as they come off to get their own liquidity to have their own wealth experience, are going to be net sellers. Do you think that's a future opportunity in the name, just because of the magnitude of what exists out there? And I'd just like to get your take on that.

Great answer. We'll take a quick break. You got a thought on this? It's obviously combining everything.

I do. His is Tesla stake, and that's how you get to $1 trillion.

All right, welcome back SpaceX. There it is. Highs of the day up about 26%, 169.6. What do you make of just the early part of the trade? I keep saying, you know, what Leslie Picker was reporting about the so-called sweet spot. Like, you don't want to see these things do a massive pop.

All right, we're back right after this. Let me ask you before I let you go, what do you make of what's happened with tech lately, particularly chips, memory? Was that an inflection point that we just hit, or what's the story here?

What timetable do you think we have to look at there?

As long as capex continues to go higher, which we're seeing it from Google, from Meta, from Oracle, I mean, the story is alive and well. And then you do want to own a lot of these companies that are getting pulled back, like the semiconductor companies.

As long as they continue to spend, I think we've reached full-on crazy town personally. You look at the second order effects, the PHLX and the SOX, the move in those over the last two or three months, I've started to rotate into financials and REITs because I think that's probably the safer way to go.

What happens if, to Brad's point, and certainly the analyst community is coming to realize that maybe they grossly underestimated the earnings power of the Microns and the memory and the other memory names and some of those key components within the AI universe? And the price action is not necessarily reflective of a valuation story being completely out of whack. You got less than 10 times on Micron. The price action has got people a little bit nosebleed.

But we've also gotten to a place where now it's not the second-order or even the third-order effects. You have people trying to go downstream and find what's going to be the best supplier of, I don't know, hammers to the construction companies building the data centers for the hyperscalers. Like, it's really gotten to a place where we've gotten way too frothy in terms of what's the extra thing that they need next. What's going to be supply constrained is the way that I'll phrase it. I think that is a good indication that we're probably due for a slowdown in that theme, at least near term. And so that's why I'm not talking about leaving tech completely. That'd be crazy. But I just think as you're taking gains, a couple of great places to look to rotate into: REITs, also the financials.

Well, you got about a 29% gain in SpaceX now. 174 thereabouts is where the stock is currently trading. You have a final trade for us today. Did you come with one?

I do. Jefferies, I'm going to stay on this theme. If you believe financials are picking up, this is an incredibly inexpensive way to play it. Capital markets look like they're doing great. They're leveraged to that. I think Jefferies, who's got Goldman?

Speaking of financials, you know who else is having a great day? You may not. I was going to say you're not buying the space under.

You need natural gas to build data centers. You need that power. Kinder Morgan.

You got what?

Yeah. On the pullback over the last week in semis, semis are down pretty significantly. Today they're getting a little bit of a bounce. I would say SK Hynix. Back to your point, seven times 2027 numbers, the single greatest bottleneck in the production of tokens. Great having you here again.

Thanks for having me. All right, let's make this a regular.