What Wall Street’s getting wrong…

August 7, 2026

Dave Gonigam

SPCX: The Last Word (For Now)

So after three days is there anything to say about SpaceX’s earnings report that hasn’t been said already?

Yes, actually.

As we mentioned on Wednesday, Mr. Market punished SpaceX for its prodigious spending on AI infrastructure like data centers.

Because SPCX sees AI as a far bigger market than space, the company is spending accordingly. And Wall Street is evaluating SPCX as a competitor with the “hyperscalers” like Microsoft, Google, Meta and Amazon.

For the most recent quarter anyway, Wall Street has put SPCX in the same bucket as GOOG and META – skeptical that those billions and billions will ever pay off.

“The read is that SpaceX is burning tens of billions to fight the AI labs. That’s not entirely correct,” says Paradigm tech investing pro Ray Blanco.

“Google is a customer. Anthropic is a customer. SpaceX chief operating officer Gwynne Shotwell named both on the call. The $14.1 billion in cloud services agreements they signed this quarter is money coming from those frontier AI labs.

“Only about 10% of that compute goes to training Grok. Elon gave that number when an analyst asked. The rest is inference and rental.”

Chief financial officer Bret Johnsen explained that SpaceX isn’t playing the same game as the others. "We're able to deploy capital in such a way that we're getting less than a one-year payback.

“It's almost like your capital is becoming almost an item that you would put otherwise in COGS [cost of goods sold], because it's moving so quickly as far as monetization and moving into revenue."

Ray finds that a plausible argument – but the burden of proof is on SpaceX in the next couple of quarters. “The payback claim still has to hold going forward. If it doesn’t, the bears are right.”

But if it does hold… it will justify Elon Musk’s expectations for $100 billion in annualized revenue by December.

For now, everyone on the Paradigm team agrees it’s too soon to pull the trigger on SPCX. Only yesterday, 911 million shares held by insiders and employees were unlocked and available to trade openly on the market. Still more unlock events are on tap between now and December.

About the Job Numbers…

Gee, who’s Donald Trump gonna fire for the rotten job number this summer?

It was a year ago this week that Trump fired Erika McEntarfer, commissioner of the Bureau of Labor Statistics – the same day the BLS reported that employers added only 73,000 new jobs during the month gone by. It was the lowest increase all year.

The Bureau has gone without a permanent head since; Trump named someone more than six months ago but the nomination has languished in the Senate.

In the meantime, the numbers have generally worsened since then. Which brings us to today…

The wonks at the BLS conjured a loss of 23,000 jobs during July. No one among legions of Wall Street economists saw that coming.

The official unemployment rate ticked down to 4.1%. How could that happen when the economy shed jobs?

Because 80,000 people dropped out of the labor force during July. And it’s a safe bet most of them weren’t retiring with a gold watch after 40 years on the job with the same company; they were people of all ages who simply gave up looking for work.

In the scheme of things, a one-month drop of 23,000 jobs isn’t a huge deal. The U.S. border has been all but sealed since the spring of 2025.

It used to take at least 150,000 new jobs every month to keep pace with population growth. But with migration dramatically curbed, the number is more like 30,000 – and the average over the last year has been just shy of that level, about 26,000.

The downside surprise in the job number is giving a lift to nearly every asset class as the week winds down.

That’s because every punk job number lowers the likelihood that the Federal Reserve will raise short-term interest rates. As of this morning, futures traders now assign a 56% probability the Fed will leave rates alone at its next meeting in mid-September.

With that, the S&P 500 is on track to end the week in record territory – up more than a half percent on the day at 7,753. The Nasdaq is up over 1% on the day, but it still has work to do to return to its early-June highs. And the Dow is up a quarter-percent, back over 54,000.

But if it’s big movement you want, it’s in the precious metals. Gold is up over $100 to $4,349 – the highest since mid-June. And silver is up over two bucks to $63.59.

In contrast, crypto is treading water – Bitcoin just under $65,000, Ethereum just over $1,900.

Crude is up less than a percent – a hair below $78. For the record, we’re still waiting on whatever “deal” with Iran the Trump administration was promising earlier this week and was supposed to be done by now.

➢ Winners this week: With the bump in gold prices today, congratulations are in order for Weekly Wealth Alert readers. Alan Knuckman urged them to take 100% profits this morning on Barrick Mining call options. Nice work for just over a week. Meanwhile at The Income Alliance, Zach Scheidt’s premium subscribers booked 59% in less than a month playing options on the software name Atlassian Corp.

Gold Miners: Still Cheap

Even with the big bump in the gold price today, gold miners are still a steal.

“This is an incredible chart of the free cash flows coming from mining companies,” enthuses Paradigm natural resources pro Matt Badiali.

“Mining, as you can see from those red lines, doesn't usually generate a lot of free cash,” Matt says. “That's because mining is capital intensive.

“You plow most of your earnings back into the business. You have to find new mines, replace equipment, and maintain your operations. I once saw a metric that measured tons of rock produced per tire… because the haul truck tires (those giant, taller-than-a-man-things) cost so much money to replace.

“But the soaring gold price of the last year-plus eclipsed those costs by so much that miners are now gushing with cash.

“It's a great time to be a producer!”

The HUI index of gold mining shares is up nearly 7% today, approaching the 750 level – the highest in over two months. Sooner or later it’s going to take out the late-February highs of 978.

It’s Come To This…

You know the world’s turned upside down when this e-letter scoops Alex Jones by over a week.

OK, the 5 Bullets take wasn’t as hyperbolic, but it’s right there at the top of our July 27 edition. The Ukraine and Iran wars effectively merged with a Ukrainian attack on an Iranian merchant ship in the Caspian Sea.

It’s true, as we chronicled a couple of days later, that Ukrainian and Iranian diplomats have since lowered the temperature. But the risk remains – and we’re keeping a watchful eye…

Mailbag: Drones

We heard from a skeptical reader after colleague Davis Wilson’s guest essay yesterday about drone warfare…

“Before the world decides that hand to hand fighting and tanks no longer serve any purpose, we need to have a discussion about how easy or hard it is to blast every one of those GPS satellites out of the sky/space without which no sophisticated drone can operate.”

Dave responds: It is true that GPS satellites are vulnerable to ballistic missiles – to say nothing of hackers and solar flares.

But many armed drones don’t rely on GPS at all – in part because GPS is also vulnerable to plain ol’ jamming and spoofing, of which there’s been a lot during the Russia-Ukraine war.

AeroVironment (AVAV) – mentioned in Davis’ writeup yesterday – has developed a drone called Red Dragon specifically for scenarios when GPS is not available or not desirable.

Other systems are radio-controlled – a souped-up version of decades-old model airplane technology.

And for distances of 12 miles or less, there are drones controlled by fiber-optic cable – which leads to perverse results like this.