Watch CNBC's full interview with venture capitalist Chamath Palihapitiya

Chamath Palihapitiya, chairman of Virgin Galactic and founder of investment firm Social Capital, joins "Squawk Box" to discuss the top stories of the morning including the coronavirus outbreak, Virgin Galactic's rise in popularity with retail investors, Bob Iger stepping down as CEO of Disney, his support of Tesla, ESG investing and much more.

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.

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