The SpaceX IPO Has Wall Street Debating Whether the AI Boom Is a Bubble. Both Sides Have a Point.

SpaceX's record $75 billion IPO has sparked debate about whether the AI boom is a bubble. Bears point to stretched valuations (S&P 500 cyclically adjusted P/E near 40, SpaceX trading at 90x revenue) and shrinking free cash flow at major tech companies despite massive AI spending. Bulls counter that massive cloud backlogs and unmet demand justify the investment, citing successful past technology cycles. The outcome depends on whether AI spending eventually produces sufficient profits.