Virgin Galactic Chairman Chamath Palihapitiya thinks the recent rally by Wall Street's favorite speculative stock is not the sign of a bubble, pointing instead to the space tourism company's growing demand from possible customers.
Shares of Virgin Galactic have tripled since the beginning of the year. But, asked whether he thinks the stock is getting ahead of itself, Palihapitiya identified a combination of factors as driving shares higher, including the current U.S. market conditions and the demand Virgin Galactic is seeing from potential customers.
"There's a setup [in the market] where there's no real growth, there's no unique stories and there's nothing that can give you long-term outlook," Palihapitiya said on CNBC's "Squawk Box" on Wednesday.
Palihapitiya added that this setup for Virgin Galactic's stock rally "also applies to Tesla," saying "those two things are the most similar stories."
"When a company comes along that has a unique narrative and is trying to do something that is differentiated, high margin and could theoretically grow for 10 years ... these things get re-priced in ways that are non-traditional," Palihapitiya said.
Virgin Galactic as a business is "making amazing progress," he said, although the company's timeline for beginning commercial operations appears to have been pushed back. The company told investors ahead of its October stock debut that commercial flights would begin in the first or second quarter of this year, setting a target for 16 flights in 2020. But that schedule has slipped, as often happens in the space industry, with CEO George Whitesides telling shareholders on Tuesday that the company's main goal this year is to safely fly founder Sir Richard Branson to space. Generating significant revenue this year, then, is not the company's current focus.
'$2.4 billion of pipeline'
Beyond the company's recent milestones, Palihapitiya pointed out that demand for Virgin Galactic flights continues to climb.
"All of this demand keeps piling up," Palihapitiya said.
Virgin Galactic told investors on Tuesday that it has received 7,957 "registrations of interest" from potential customers since its first spaceflight in December 2018, which Palihapitiya quantified in terms of the company's possible future revenue.
"If those 8,000 people — just those 8,000 people — it doesn't seem like a lot but, when you think that the price could be around $300,000, that's $2.4 billion of pipeline," Palihapitiya said.
The space tourism company reported its first-ever full year financial results on Tuesday, including a larger-than-anticipated loss for the fourth quarter.
Virgin Galactic also announced it will begin accepting $1,000 deposits toward space flight tickets. Those who pay the fully-refundable deposit will be the first offered reservations when Virgin Galactic re-opens ticket sales later this year. Whitesides said the company will later share its strategy on premium pricing, saying the $1,000 deposits will help identify the customers most eager for the next batch of sales.
Virgin shares were lower by 4% in premarket trading Wednesday.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.
