Roger Altman, Evercore founder and senior chairman, warned on Monday that traditional valuation methods struggle to capture high-growth companies such as newly public SpaceX (NASDAQ:SPCX) and IPO-bound Anthropic, where enormous scale, artificial intelligence and uncertain long-term cash flows make pricing difficult.
Altman Warns Valuations Defy Easy Math
"I don’t think anybody understands, at least I don’t, how to value companies like SpaceX or Anthropic. And they’re probably going to be some pretty, they’re very, probably very volatile prices like we’re seeing on SpaceX right now, on that side of it," Altman said on CNBC’s "Squawk Box."
"But the companies are fundamentally good, impressive companies. And that is the right… the important thing for the long term. But people who own them have to be ready for a lot of volatility," he added.
Altman pointed to last week’s 8% to 9% drop in chip stocks as a normal and healthy correction after the index had doubled earlier in the year. Still, he said valuations across much of big tech remain exceptionally high by historical standards.
SpaceX Swings After Nasdaq Inclusion News
SpaceX shares rose more than 7% on Monday after Nasdaq Inc. (NASDAQ:NDAQ) said the company will join the Nasdaq-100 Index before the market opens on July 7. The move is expected to drive passive buying from funds tracking the index.
The rally followed sharp swings in SpaceX’s first weeks of trading. The stock briefly pushed the company toward a nearly $3 trillion market value, above Microsoft Corp. (NASDAQ:MSFT), before retreating. Shares traded about 21% above their $135 IPO price on Monday and were up 8.85% over five days after falling more than 20% last week.
Altman’s warning comes as retail demand for SpaceX has surged. The company allocated about 20% of its massive IPO to retail investors globally, after earlier discussions of setting aside as much as 30% through platforms including Fidelity and Charles Schwab.
Anthropic Adds To Valuation Puzzle
Earlier this month, Anthropic, the creator of Claude AI, confidentially filed to go public. A recent private round valued the company at nearly $965 billion, raising similar questions about how investors should price fast-growing AI firms before they begin trading publicly.
Traditional valuation models are also clouded by business ties among these companies. Anthropic has signed a compute agreement with SpaceX for access to its Colossus data center capacity, tying the AI company’s growth directly to SpaceX’s infrastructure ambitions.
According to Benzinga Edge Rankings, SpaceX stock fails to provide a favorable price trend in the Short, Medium and Long term.
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