Amazon was not profitable for many years. Today it makes most of its money off cloud storage, not sending you a three-pack of tighty-whiteys in 24 hours. The point being that you never know when the next huge company will emerge.
Krugman looks at the IPO for SpaceX. (First of all, NVIDIA is now the company with the largest market cap. More than Alphabet (Google), Apple and Microsoft.) SpaceX jumped ahead of Amazon, making Musk the world's first trillionaire. All of these companies are - more or less - IT companies. Apple, I guess, actually makes physical products, as does NVIDIA. There's a tangible "thing" there. SpaceX seems to be in the same space, in that they have a lot of shitty IT stuff (Twitter, Grok) but they do have a good satellite system.
What's crazy about these IT companies is that most of them were not profitable for years. Eventually, they found a way, like Google did, of monetizing their product. Amazon moved into cloud storage, because being the world's largest retailer wasn't profitable enough. If you look at the most profitable companies in the world, the usual suspects are there, but so are Saudi Aramco, Berkshire Hathaway and a bunch of banks.
The valuation of SpaceX is entirely a valuation of Elon Musk. Microsoft - whom no one loves, and that includes freaks like me who actually use an MS system - has $125B in profits off $318B in revenue. SpaceX has $4B in LOSSES off $19B in revenue. How are there market caps the same?
Ultimately, it's a bet on Musk. He's this crazed, ketamine fueled weirdo whose manifest strangeness is presumed to represent genius. Yes, Tesla makes an amazing battery and Starlink is very impressive. But Grok? The Boring Company? His purchase (and destruction) of Twitter? You can hand-wave away these flops as the price of genius, or you could look at Musk and see a nine year old boy rattling off dreams ("I'm gonna go to MARS!") and mistake that for vision, because was right about lithium batteries. He's so fucking strange that he must be a genius, right? So let's buy into SpaceX, because...space is profitable?
Silicon Valley is all about hype, and sometimes that hype pays off. Sometimes it very much doesn't. Musk, sadly, has largely accumulated so much speculative money that even if his endeavors crash and burn, he will likely blithely sail along on his riches.
The plutocratic freakshow this diminished age deserves.
