TheChek News Flow

Most countries only impose levies once gains are realised

The Dutch government is preparing to soften a contentious tax that would hit wealthy investors and has placed the Netherlands at the centre of a global debate over levies targeting the rich.

Dutch investors are balking at plans that would subject them to an annual 36 per cent tax on their paper profits on liquid assets such as savings, equities, bonds and cryptocurrency, even if they are not sold.

The regime, due to come into force in January 2028, would make the Netherlands an outlier among most advanced economies in its taxation of unrealised gains.

The measure was pushed by a hard-right coalition in which Geert Wilders’ populist Party for Freedom was the biggest member.

Prime Minister Rob Jetten’s coalition, which came into power in February and whose Liberal D66 party was not in the previous government, is now preparing a series of concessions following sustained criticism from investors and business groups, who argue the measure risks undermining the country’s attractiveness as an investment destination.

“The government takes these concerns seriously. It is exploring ways to soften the consequences of the accrual-based tax and is working out possible options, which will be presented before the end of June,” a spokesperson for the Minister for Tax Affairs, Tax Administration and Customs told the FT in a statement.

While the concessions, if approved, are expected to soften the regime’s impact, they are unlikely to satisfy demands for the capital gains accrual tax under the “Box 3” system, which sets out how wealth from savings and investments is treated, to be scrapped immediately.

The Dutch dispute is the latest example of the political challenges governments face changing taxes that hit the wealthy. In California, proposals for a “billionaire’s tax” have opened a sharp political divide. Several European countries, including Norway and France, have adjusted their wealth tax regimes after pushback from investors.

The Dutch reforms, first put forward in May 2025, are intended to address historic unfairness in the previous system, under which investors were taxed on notional returns — an approach that courts ruled unlawful. But the proposed replacement, which treats liquid and illiquid assets differently, has sparked an outcry over its workability, fairness and complexity.

Taxing unrealised gains creates “severe liquidity issues and administrative burdens for retail investors”, said Daniël van Meijgaarden, head of international tax and legal at aaff, a Dutch accounting firm.

The government is considering the introduction of loss carry-back, allowing investors to offset losses against previously taxed paper gains. It is also examining a new definition for start-ups and scale-ups, a major point of contention in determining which assets would be exempt from the accrual tax.

Under the proposed legislation, start-ups, scale-ups and immovable property would be exempt from the accrual-based regime and instead be taxed when gains are realised.

Frans Heeren, managing partner at Dutch accountancy firm Vermetten, welcomed that the Dutch government was working on concessions but said concerns remained about the new system.

“People are happy that [adjustments] are being introduced,” he said. “But the main issue remains whether unrealised gains should be taxed at all.”

The concessions are expected to come as the Dutch upper house, the Senate, wrestles with the proposed legislation, which passed the lower house in February under the previous government.

The changes will also require a fresh vote in the lower house. Jetten’s minority government will need the votes of some opposition parties to get the changes approved.

Some senators are questioning whether the bill should proceed in its current form or whether the cabinet should be forced to accelerate a more fundamental shift towards taxing gains only when they are realised — the standard approach in most countries.

The government earlier this year signalled that it intends to move to a capital gains tax system “as quickly as possible” but has resisted pressure to abandon the 2028 introduction of the accrual tax, arguing it would leave a hole in the budget.

The uncertainty surrounding the legislation has already “demoralised investors”, said Harsh Patel, founder and chief executive of Water & Shark, an accountancy and legal firm. “It is not right to tax something that has not come into your pocket.”

The new Box 3 system applies to Dutch private taxpayers. It will not apply to institutional and many foreign investors, said the government.

The ever-present fear of ridicule among cycling’s weekend warriors tells us a thing or two about human nature

I learnt this week that Sotheby’s has entered the market for high-end road bicycles. So I called Paul Redmayne, senior vice-president for luxury private sales at the auction house, who told me that the first bike they’d sold, in 2023, was a Colnago C68, “wrapped in gold leaf with a diamond embedded in the top tube”. Last year, a machine ridden during the Tour de France by the eventual winner, Tadej Pogačar, sold at auction at Sotheby’s for $190,500.

This got me thinking not only about Thorstein Veblen’s account of conspicuous consumption and the rise of the leisure class, many denizens of which today have swapped the golf course for the group ride, but also about his contemporary Sigmund Freud’s theory of the narcissism of minor differences.

If you ever want a demonstration of both ideas, head on a Saturday morning to the 9W Market, a café on the west bank of the Hudson, 20 miles or so north of New York City. The bicycle racks will be full and the place will be crawling with middle-aged men in Lycra — or “mamils” — on their mid-ride coffee-and-cake break. Completing the 100km loop from Manhattan to the little town of Nyack and back, with a refuelling stop in the Palisades, is a rite of passage for any New York-based amateur road cyclist worth his or her salt.

Now, to the uninitiated, one “mamil” — defined by the dictionary as “a very keen road cyclist, typically one who rides an expensive bike and wears the type of clothing associated with professional cyclists” — looks very much like another. But to members of the species themselves (and I am one), our differences are as important as our similarities. 

These are expressed in the kinds of bikes we ride (carbon fibre frames, naturally, but with what kind of chainset or gear ratio?), the kit we wear (the choice between Rapha, say, and Pas Normal Studios is heavily freighted) and the way we wear it (heaven forbid that you should inadvertently place the arms of your special cycling glasses under your helmet straps).

As Freud put it in Civilization and Its Discontents, “it is precisely communities with adjoining territories, and related to each other in other ways as well, who are engaged in constant feuds and in ridiculing each other”. Actual feuding on the group ride might be rare, but the fear of ridicule is ever present. 

On my last visit to the 9W Market, as I clattered towards the coffee counter in my cleats (anyone cycling in flat shoes or trainers immediately identifies themselves as a hopeless neophyte), I agonised about the height of my socks (white, obviously). Were they long enough to avoid the disdain that comes the way of anyone wearing ankle socks or, perish the thought, “no-show” socks that expose the ankle? 

Last year, Pogačar’s Slovenian compatriot, Primož Roglič, caused consternation in the two-wheeled fraternity when he rode stage 12 of the Tour in no-show socks barely visible above his cycling shoes (again, white).

The uproar was partly a matter of aesthetics and partly an expression of professional cycling’s obsession with aerodynamics and the science of “marginal gains”. Wind-tunnel experiments have shown that wearing specially designed “aero” socks reduces drag.

You might object that such considerations are irrelevant to the fiftysomething recreational rider for whom a 100km ride at the end of a long working week might be at the outer limits of their endurance capacities. And you’d be right. 

But splashing out on a bike that once belonged to a member of the pro peloton is tempting if you can afford it. Redmayne tells me that Sotheby’s is also now offering clients a Tour de France “experience” in which you embed with one of the teams and receive a custom-made bike and kit. The cost? “Six figures.”

Apple has reached a turning point. When CEO Tim Cook delivers the keynote address at the company’s Worldwide Developers Conference on Monday, it will likely be his last major public act as chief executive. He would sure like to go out with a bang.

The company has an agenda to meet the moment. WWDC is shaping up to be Apple’s second attempt at announcing its plans for artificial intelligence. The company first rolled out Apple Intelligence at 2024’s WWDC.

Wall Street expected that 2024 rollout to drive a massive iPhone upgrade cycle. Instead, Apple’s AI products have disappointed consumers, and the launch of a highly anticipated AI-powered Siri chatbot has been delayed until the fall.

Now, it’s take two. Apple is expected to show off a revamped Siri during the keynote on Monday, along with some other AI updates. UBS analyst David Vogt expects Apple to present an AI-powered Siri that will be able to understand personal data and analyze on-screen content. He also expects Apple to launch an independent Siri app that functions similarly to other AI apps by acting as an “interface for text, voice, and attachments.”

After getting punished on its AI failures, Apple stock is rallying again. Investors are offering Apple a rare second chance to get AI right.

“I think this would be a great opportunity to just show that personalized Siri is the killer consumer agent,” John Belton, portfolio manager at Gabelli Funds, tells me. “Maybe personalized Siri is something that can really bring a lot of this new technology to the billions of iPhone users around the world.”

This WWDC holds emotional weight for the company and its fans. Cook is stepping down from his role in September, and incoming CEO John Ternus is expected to lead the announcement of the next iPhone that month.

By any financial metric, Cook’s tenure has a been a wild success. Revenue is up 293%. Market value has increased $4.2 trillion. Cook, meanwhile, has turned Apple into a services business with a sticky ecosystem. He spearheaded the launch of wearable products like the Apple Watch and AirPods. Monday’s WWDC keynote gives Cook an opportunity to leave the company on an even more positive note.

“The most important message they’re gonna have to tell is, ‘We’re not behind in AI. We have a game plan. We have a strategy.’ And I think if that vision is shared by Tim Cook, then he’ll be leaving at a time when he has sort of set the company up for the next era. And from that standpoint, I think it’s a pretty logical time to be transitioning out,” Belton says.

Any progress in AI comes amid a difficult backdrop. Public sentiment around AI has quickly shifted, with worries about job loss and privacy overshadowing any productivity enhancements the technology might bring. Half of U.S. adults say the increased use of AI in daily life makes them feel more concerned than excited, according to a 2025 survey from Pew Research Center.

The negativity could actually be a boon for Apple, which has long marketed itself as a company that prioritizes user privacy and safety. Users already share huge amounts of data with Apple, from passwords and credit cards to Face IDs and their most personal health information.

Apple has another edge in the AI race. It isn’t spending hundreds of billions of dollars on capital expenditures. While Alphabet parent is suspending stock buybacks and turning to equity markets to raise more money, Apple continues to repurchase shares. If Apple gets AI right, its spending strategy will look brilliant.

For now, Apple seems to be following its successful old playbook. The company never created its own search engine, relying on Google to power search across its devices. Apple is religious about controlling customer experiences, but it knows where to ask for help.

When it comes to AI, Apple has announced previous plans to partner with ChatGPT maker OpenAI on Apple Intelligence. This year, the company said its next generation of Apple Foundation Models would be based on Google’s Gemini models and cloud technology.

“Apple has not been a visible participant in the compute buildout race, and frontier model-building is not where the company has historically differentiated vs. other Mag Seven peers or frontier labs. This has fed the perception that Apple is an AI laggard in a race that is already well underway,” BofA Securities analyst Wamsi Mohan recently wrote in a note to clients.

But, Mohan said, Apple doesn’t have to own the best frontier model if it owns the “trusted interface.”

Investors seem to understand that Apple is playing a wise long game when it comes to AI. Over the past 12 months, Apple shares have jumped 54%, doubling the S&P 500’s gain.

For Cook & Co., the rally has raised the stakes for Monday’s event. Apple nows trades at 33 times earnings estimates for the next 12 months, above its five-year average of 27.5 times forward earnings. That multiple leaves little room for Apple to disappoint at WWDC.

Even if the company nails the presentation, don’t expect Apple to get a near-term boost. Over the past decade, shares have declined slightly on the day of the WWDC keynote, according to Dow Jones Market Data. Three months later, they’re up an average of nearly 14%.

Investors can find a more favorable regulatory environment and cheaper investment options in clean-energy companies outside the U.S.

For years, clean energy has been where investor optimism went to die. Today’s power shortage is forcing a second look.

Popular clean-energy exchange-traded funds like iShares Global Clean Energy and Invesco WilderHill Clean Energy are up more than 30% this year. The funds are beating both the broader market and the oil major–heavy energy index represented by the State Street Energy Select Sector SPDR ETF—even after the Iran war-driven oil-price spike handed fossil fuels every advantage.

Like a cat with nine lives, the capital-intensive renewables sector has survived challenges over the past 20 years that included its initial speculative boom, politically fraught subsidy fights, the shale revolution (which made fossil fuels more competitive), Chinese overcapacity in solar and battery technologies, and retaliatory U.S. tariffs.

For its current run, clean energy can thank Big Tech, which has created demand for fast-to-build power for the first time in decades—solar, wind, and batteries often fit the bill. The Iran war also created demand for alternatives to fossil fuels.

“The strong performance of the clean energy sector is proof that if you electrify and use clean energy, you have more security than you do if you’re more dependent on natural gas and oil,” says Ben Bielawski, portfolio manager at Duff & Phelps Investment Management.

There are plenty of American names to stake bets on. But outside the U.S., investors can find a more favorable regulatory environment and cheaper investment options without the premium now attached to the U.S. artificial-intelligence power trade.

For example, investors searching for the European version of NextEra Energy —a large clean-energy producer with a regulated utility arm—need look no further than Iberdrola. The Spanish utility owns power grids in several major markets, including Spain, Britain, Brazil, and the U.S., and has spent decades building one of the world’s largest renewable power fleets.

It is spending most of its capital not on generating more power but on its poles-and-wires business, which earns steadier returns as electricity demand rises. Iberdrola’s U.S.-listed American depositary receipts are trading at a lower ratio of enterprise value-to-earnings before interest, taxes, depreciation, and amortization, or Ebitda, than shares of NextEra, meaning you can own the theme without paying the full AI premium attached to U.S. power stocks like NextEra. Bielawski of Duff & Phelps likes the stock.

For the European equivalent of Constellation Energy, a power producer that owns scarce clean nuclear and hydroelectric power, Bielawski points to Finnish utility Fortum. Nearly all of its power generation comes from renewable or nuclear sources, giving investors exposure to “always available” clean power without having to bet on a new technology. Fortum, which has a somewhat illiquid ADR under the symbol FOJCY, now boasts a dividend yield of nearly 4%, according to FactSet data.

That dividend should remain secure as long as Big Tech continues to target the region for new data centers. Meta Platforms built one of its largest data centers in the world in northern Sweden, and Alphabet’s Google has repeatedly expanded its facility in Hamina, Finland. They aren’t there for the scenery; clean hydropower is cheap in the Nordics, and cold air to cool the data centers is free.

Beyond the utilities, there are also foreign equivalents of U.S. superstar stocks making electrification physically possible.

Balfour Beatty, the United Kingdom construction contractor, is a rare operator sitting on $1.6 billion in net cash and is helping build energy infrastructure in Britain. That includes work tied to the country’s first new nuclear station in a generation, as well as a BP – and Equinor-backed project that aims to be among the world’s first commercial-scale natural-gas plants with carbon capture.

Spie, a French company, is like the European version of Quanta Services in that it designs and installs electrical infrastructure. Germany was the company’s fastest-growing market in 2025; the country no longer has access to cheap Russian gas after Russia severely restricted and then entirely halted deliveries following its invasion of Ukraine. Germany moved to end its dependence on Russian energy, a transition made permanent when the Nord Stream pipelines were damaged by sabotage in 2022.

Italian cable maker Prysmian is a rare clean-power company that can make high-voltage electrical cable at scale. It has spent years increasing its market share, and data center power has given the 150-year-old business a new lease on life. The company has grown its free cash flow to 1.19 billion euros ($1.4 billion) over the 12 months that ended March 31, up nearly 20% from the previous year despite relatively heavy spending on factories and equipment.

The most explosive growth has come from companies promising to power data centers in less than a year, such as fuel-cell company Bloom Energy. Bloom spent most of its 25 years as a promising—but unprofitable—solid oxide fuel-cell maker that never quite broke through. Then the AI data center boom found it. Data center developers can install Bloom’s fuel cells on site, giving them access to power far faster than waiting years for new grid connections or power plants.

The electricity generated this way is costly, but companies racing to develop AI are willing to pay higher prices. Bloom has struck deals with Big Tech companies and utilities, helping the stock surge more than 1,500% over the past 12 months and pushing the company’s market cap to about $85 billion.

Bloom’s market cap is now within range of Constellation’s, even though Bloom has only about 1.5 gigawatts deployed globally—or just over 4 gigawatts including Oracle’s announced order—while Constellation owns about 55 gigawatts of generating capacity, responsible for roughly 5% of U.S. electricity. A comparison is either an argument for Bloom’s potential or a warning about its price, depending on your disposition.

If you aren’t tempted to buy Bloom at that valuation, Bielawski says there is a parallel play in Ceres Power, a U.K.-listed company that few the U.S. have heard of. It doesn’t manufacture fuel cells like Bloom but instead licenses the intellectual property behind them. Rather than carrying the capital costs of building and deploying projects itself, it collects royalties from partners including Delta Electronics, one of Taiwan’s largest manufacturers, and Doosan, the Korean industrial giant.

Ceres’ technology uses steel rather than the ceramics most competitors rely on, which the company says can make it cheaper to produce, a meaningful edge in the price-sensitive Asian markets where the real volume opportunity lies. Ceres has a market cap of roughly $2 billion, a fraction of Bloom’s.

There is still plenty of hand-wringing about how much new nuclear development the world can realistically expect, given the sector’s history of cost overruns. Still, the political backdrop in Europe is shifting in nuclear’s favor.

Belgium has spent the past two decades trying to wind down its nuclear industry, but Russia’s invasion of Ukraine accelerated a rethink of that strategy. At the end of April, Brussels entered exclusive negotiations with French utility Engie for Belgium to acquire its nuclear reactors, including its workforces and liabilities inside the country. The deal would effectively nationalize an industry Belgium had spent years trying to phase out.

The Nordic region is moving in the same direction. Sweden has set a target of 10 gigawatts of new nuclear capacity by 2045, and in April proposed taking a 60% ownership stake in the country’s first new reactor project since 1985. Norway, which has never had a nuclear plant, greenlit an impact assessment for a small modular reactor in March.

Meanwhile, Spain is having discussions about extending the life of its operating reactors.

The revival needs fuel. Russia is a major supplier of conventional enriched uranium, the fuel used by today’s reactors, as well as the only commercial supplier of high-assay low-enriched uranium, or Haleu, which many advanced reactor designs are expected to need. In the U.S. public market, Centrus Energy is the clearest public-market bet on building a domestic alternative.

Centrus owns the only American-controlled enrichment plant licensed to produce Haleu but says it won’t be producing it at commercial scale until at least the end of the decade.

The Department of Energy awarded nearly $1 billion to one of Centrus’ subsidiaries in January to build out U.S. Haleu enrichment capacity. “The U.S. is short of enrichment, and we need to build up that capability regardless of reactor type,” says Mark Corigliano, founder of Corigliano Investment Advisers, who likes the stock. Still, the scale of the buildout has hurt the stock in the near term. Shares have fallen 30% since the start of the year, as the costs to expand production contributed to two earnings misses.

Bielawski prefers to own the nuclear supply chain further upstream. Cameco, the Canadian uranium miner, is one of the world’s largest producers of raw uranium and benefits directly as Western utilities scramble to replace Russian supply. Rising uranium prices flow straight to the bottom line.

He also likes AtkinsRéalis, the Montreal-based engineering company that designs, builds, and extends the life of nuclear plants globally. Two years ago, nuclear accounted for 15% of its revenue. Last quarter, nuclear made up 25%, after the company signed a multibillion-dollar contract to extend the life of four reactors at Ontario’s Pickering station, a deal to build two new reactors in Romania, and a collaboration with Nvidia to design nuclear-powered AI facilities. Profits jumped 34% in the most recent quarter.

Clean-energy stocks are performing well, but they can still destroy capital if investors buy the wrong company at the wrong price. That is especially true after a rally.

But now that Big Tech has awoken to the fact that these companies can get them the power they want in a palatable time frame, the sector should fare better than it has historically. In Europe, it faces less concern over the politics of carbon emissions, and stocks haven’t yet soared to the same heights as their U.S. counterparts.

For once, the clean-energy trade looks better the further it gets from Washington.

European defense start-ups and established firms are increasingly pursuing IPOs and raising equity capital amid a rearmament surge.

EU states’ military spending increased 11% last year and nearly two-thirds since 2020, driven by geopolitical shifts.

Despite recent market dips, analysts view European defense as a long industrial cycle with strong order books and cheap valuations.

U.S. artificial-intelligence giants aren’t the only initial public offerings worth watching these days. European defense start-ups are also rushing to market.

Just in the past week, United Kingdom—based jet components maker Doncasters and Finnish communications specialist Savox announced IPO plans. They follow diversified armaments manufacturer Czechoslovak Group, or CSG, which in January raised 3.8 billion euros ($4.4 billion) for history’s biggest defense IPO anywhere. Coming attractions include German drone maker Helsing and Finnish satellite builder ICEYE.

Some established European defense mainstays are also raising equity capital. Leopard tank manufacturer KNDS Group, co-owned by the French and German governments, has penciled in a Frankfurt IPO this year. German conglomerate Thyssenkrupp spun off its naval division last October at a €5.2 billion valuation.

“Defense is no longer just a panic trade on scary news,” says Ruben Dalfovo, investment strategist at Saxo Bank in Denmark. “It is becoming a long industrial cycle.”

Europe’s defense offerings are dwarfed in scale by SpaceX, Anthropic, or OpenAI. They may prove no less important in fate-of-the-world terms, though.

The Old World is in the midst of a rearmament surge, catalyzed by the successive traumas of Russia invading Ukraine and the U.S. turning hostile under President Donald Trump. Military spending by European Union states jumped 11% last year, and by nearly two-thirds since 2020, the EU reports. U.S. expenditure fell in 2025, though this year should be different.

Eager to reduce dependence on Washington and less invested in expensive legacy systems, Continental defense ministries are more open to giving new tech a chance, argues Nicholas Nelson, general partner at London-based seed investor Archangel Ventures. “There’s a lot more money coming on-line that doesn’t have the baggage of an incumbent program,” he says.

The European arms establishment is also embracing the start-up sphere, not trying to freeze it out. Iconic German contractor Rheinmetall has one joint venture with ICEYE on space-based reconnaissance and another to build naval drones with U.K.-based Kraken Technology Group, one of Archangel’s companies.

“Rheinmetall is trying to build a whole network of tools linked by a single system,” says Michael Field, European equity strategist at Morningstar.

One more long-term advantage, Field adds, is Europe’s continued embrace of Ukraine while the U.S. all but abandons it. That gives Continental defense contractors a ringside seat to the astonishing innovation that has enabled Ukraine to survive. “We are able to share more about how they implement their systems and use it as a blueprint,” he says.

One thing not in new issues’ favor is current market sentiment around listed European defense stocks. After a blistering run last year, the Select Stoxx Europe Aerospace & Defense exchange-traded fund has counterintuitively fallen 15% since the Iran war started three months ago. CSG shares have lost half of their value since debuting four months ago.

Investors are taking a breather, not giving up on the sector, Field thinks. “It’s going to take Germany at least 10 years just to restock the weapons they have given to Ukraine,” he says. “Valuations are very cheap now relative to the order books and earnings growth.”

“Military spending is not just about one war,” Saxo’s Dalfovo echoes. “It is about Europe trying to rebuild strategic autonomy.”

Venture capitalist Nelson has his own take on the moment. “We’re in a hype cycle but not a bubble,” he says.

That’s about the best that investors in anything could hope for right now.

While the company is spectacular, the stock is too expensive to justify the risks.

SpaceX targets a $75 billion IPO raise at $135 per share, potentially valuing the company at $1.8 trillion, though fair value may be closer to $1 trillion.

Starlink generated $7.2 billion EBITDA in 2025 with over 60% margins, while the xAI acquisition led to a $6.4 billion operating loss.

SpaceX aims for 70% gross and 45% net income margins, 10 percentage points above Alphabet.

The SpaceX initial public offering is one of a kind; the investment opportunity is not. With a roughly $1.8 trillion valuation, the stock may be too big to reach escape velocity.

SpaceX’s IPO is arguably the biggest capital-markets event ever. There is the sheer size—a record $75 billion raise is targeted, excluding overallotment options for bankers to buy an additional 83.3 million shares; the offering price isn’t a range, but a specific price of $135; and the ultimate value of the company could hit $1.8 trillion. SpaceX’s singularity will continue when it starts trading, with the company added to the Nasdaq 100 just 15 trading days after the offering, requiring passive buying of 10% to 15% of the shares outstanding, and a massive amount of retail participation in the IPO.

Yet despite the superlatives, SpaceX is just a company. Yes, it’s the world’s dominant space company, having leveraged lower costs from reusable rockets to build Starlink, a space-based broadband product with more than 10 million customers. But it’s also the world’s most valuable money-losing company, competing with the likes of OpenAI and Anthropic, and one of the most expensive, trading at 40 times estimated 2026 sales and 175 times earnings before interest, taxes, depreciation, and amortization, or Ebitda. For investors considering buying the IPO, it is worth waiting for the stock to trade closer to fair value, which likely sits nearer $1 trillion than $2 trillion.

SpaceX, despite its name, isn’t just a space company—far from it. Its launch segment is a solid business that was profitable before suffering an operating loss of $657 million in 2025. That deficit was the result of SpaceX’s spending on its huge, fully reusable Starship rocket, which set the company back some $15 billion over time. But Starship is also the key to SpaceX’s future: It is expected to lower costs to reach orbit by 90% compared with its Falcon 9 rocket, which had already slashed costs to reach space by 95% compared with the Space Shuttle.

SpaceX’s most profitable unit is its Starlink space-based broadband business, built on satellites launched by the company. It generated earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $7.2 billion in 2025, up about 90% year over year. Ebitda profit margins are north of 60%, better than the 38% generated by telecom companies, including AT&T, T-Mobile US, and Verizon Communications. Revenue and Ebitda should grow rapidly in the coming years as SpaceX targets global broadband and mobile markets worth $1.6 trillion.

Not everything is pretty. Consider SpaceX’s artificial-intelligence business, grafted onto the company when it purchased xAI for $250 billion in February. It generated an operating loss of $6.4 billion in 2025 and a first-quarter loss of $2.5 billion. xAI, which has been dissolved as a corporate entity, spent $12.7 billion in 2025, while AI spending hit $7.7 billion in the first quarter. Losses should be mitigated by selling computing power to Anthropic and Google for $1.25 billion and $920 million a month, respectively. Others seeking computing power could turn to SpaceX as well.

Placing a valuation on all of this isn’t easy. Morningstar recently valued SpaceX for about $780 billion, which includes just $170 billion for AI.(OpenAI and Anthropic, by comparison, will seek trillion-dollar valuations in coming IPOs.) New York University professor and valuation maven Aswath Damodaran values SpaceX at about $1.3 trillion, or $99 a share. To get there, he assumes $420 billion in 2036 revenue, including $40 billion from space, $120 billion from Starlink—a number on par with AT&T today—$160 billion from AI and $100 billion from “other” opportunities that low-cost launch enables but aren’t evident yet. (SpaceX will have a defense business.) Margins in the launch and Starlink businesses are similar to what SpaceX is producing. AI and “other” operating margins look like OK software margins today. Bottom line, that yields $160 billion in 2036 operating profit. That is just shy of what Alphabet will generate in 2026.

The Alphabet comparison is a good one. What began as a search company has become so much more. Alphabet is expected to generate about $231 billion of Ebitda in 2026 from search, YouTube, Waymo, Android, cloud services, and Gemini. For SpaceX to grow into its valuation, it will need to develop profitable AI applications or a cloud-based computing franchise that generates hundreds of billions in profits. In the long run, SpaceX is targeting gross profit margins of 70% and net income margins of 45%, about 10 percentage points better than Alphabet on both metrics.

Expecting Alphabet-like returns from the SpaceX IPO is asking too much. Google was a less mature company—it had been in business for six years to SpaceX’s 24—when it went public in 2004. Google’s IPO price was $85 a share, or $2.125 after accounting for stock splits, and left the company with a market capitalization of about $23 billion. Alphabet stock has gained 17,000% since then. To generate that kind of return will require SpaceX to earn a market valuation of $300 trillion.

That is a lot, even for a company run by Elon Musk. The Tesla CEO and SpaceX founder is an innovator whose most important gift might be getting people to believe in the seemingly impossible—like $20,000 robots doing all humanity’s hard labor. His fans are devoted, and with good reason—Tesla stock has earned investors a 370-fold return from its split-adjusted IPO price of $1.133. But the bigger Tesla has gotten, the harder it has been to generate returns. The company hasn’t grown profits since 2022, and now trades at roughly 200 times expected earnings over the next 12 months. The stock has barely budged since the end of 2024.

None of that is likely to keep investors away from SpaceX. Retail investors love Musk’s companies, and will likely be able to buy a heap of stock at the offering price of $135. We would recommend waiting for a better price, something closer to $90 a share.

From there, the stock could really take off—with far less chance of a blowup.

OpenAI CEO Sam Altman and the White House are in ongoing talks about a possible government stake in the artificial intelligence company, CNBC confirmed on Friday.

The discussions have been in progress for more than a year, as Altman first shared the idea with the Trump administration in 2025, according to a source familiar with the matter who asked not to be named because the details are confidential.

The talks continued this week as Altman met with a range of lawmakers and officials in Washington about regulation and the latest developments in AI.

As part of the potential agreement, OpenAI could donate equity to the U.S. government to seed something like the “Public Wealth Fund” that the company outlined in its April policy proposal, the person said.

OpenAI said the fund could “invest in diversified, long-term assets” and would enable citizens to participate in the “upside” of AI growth, possibly by receiving the fund’s returns directly, according to the proposal.

No official investment terms have been decided, and the details are still subject to change. Notus was first to report the recent talks.

President Donald Trump addressed the talks while on Air Force One with reporters on Friday.

“There are concepts where pieces could be given to the American public, where the American public essentially becomes a partner,” he said.

The president said he is meeting with AI companies “in the very short, very near future.”

Trump signed an executive order in February calling for the federal government to establish a sovereign wealth fund.

The Trump administration has already taken stakes in Intel

, International Business Machines and other quantum and critical mineral companies during the president’s second term.

Sen. Bernie Sanders, I-Vt., told CNBC that he and Altman discussed the concept of a sovereign wealth fund during their meeting on Wednesday.

OpenAI is valued at more than $850 billion by private investors, and the company is gearing up for an initial public offering as soon as this year. The company closed a record-breaking funding round in March that was co-led by MGX, which is backed by Abu Dhabi’s sovereign wealth fund.

Tech companies like OpenAI have played a central role in shaping the White House’s positions on the nascent technology.

Trump on Friday signed a directive instructing the federal national security organizations to “accelerate AI adoption to meet surging demand” and to rapidly onboard the “most advanced AI models from multiple vendors.”

The directive landed just days after Trump signed an executive order asking AI companies to voluntarily provide the government access to their models for up to 30 days before their release. The order is thin on specific details, but executives from leading AI companies, including Altman, voiced their support on social media.

“The U.S. should lead on AI by continuing to develop the very best models, making sure they’re safe, and getting cyber tools into the hands of trusted defenders,” Altman wrote in a post on X. “The new EO gets the balance right.”