The looming initial public offering of SpaceX is unsurprisingly drawing out predictions of the company’s future value. And, as you might imagine, some of them are shockingly bullish. None is as optimistic, however, as billionaire investment manager Ron Baron’s. He thinks SpaceX could be worth $30 trillion within the next 10 to 20 years, up more than 1,600% from the IPO’s implied valuation of only $1.75 trillion.
The thing is, that’s not as unreasonable as it sounds.
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The prediction is wild in a lot of ways, not the least of which is the sheer size of the number. For perspective, the stock market’s biggest company right now is Nvidia, but its current market cap is a mere $5 trillion. It would require average annual stock gains in excess of 20% for the next 14 years for SpaceX to reach the $30 trillion mark by 2040.
It’s been done before, though, by Amazon (NASDAQ: AMZN). But that was a rarity rooted in lucky timing and the rapid proliferation of the internet. It’s not the norm. And unlike Amazon in its infancy, SpaceX is anything but an unknown, underestimated company.
Nevertheless, don’t rule the possibility out.
The key isn’t the company itself, however. It’s all the businesses that the company is in. They’re poised to grow big-time.
Take space-launch services as an example. Global Market Insights expects this industry to grow at an average yearly pace of nearly 15% through 2035, when it will be worth more than $30 billion. The industry’s growth could actually accelerate after that, however, once other industries recognize it’s reliable and affordable; they’ll also need SpaceX’s help building satellites.
Then there’s the business most people are underestimating. That’s SpaceX’s satellite-based broadband internet service, Starlink. It’s now serving 10.3 million subscribers, but with a starting price point of $55 per month, this only scratches the surface of what it could become. SpaceX says this market could eventually be worth well over $1 trillion, as it becomes a reliable alternative to more traditional connectivity.
The artificial intelligence data center infrastructure industry (yes, SpaceX is in this business, too) is apt to be considerably bigger in the future as well. An outlook from Precedence Research suggests this sliver of the AI market will be worth nearly $200 billion by 2035, growing at a yearly pace of more than 27%.The real money in this business, however, is offering ways for the world to use this hardware. SpaceX thinks the AI enterprise application industry will eventually be worth nearly $23 trillion. It’s ready to serve it with platforms like Grok and xAI, although it’s also certainly able to build or support other AI applications.
