Billionaire investor Ron Baron, who has spent 56 years in the investment industry, believes SpaceX (SPCX.US) could reach a valuation of as much as $50 trillion over the next decade, representing nearly 25 times upside from its current valuation. He also said SpaceX CEO Elon Musk told him that this prediction may still be too conservative. SpaceX fell more than 4% on Tuesday, its worst single-day performance in over two months, and is down 3% year-to-date.
Baron's $50 Trillion SpaceX Valuation Thesis: More Than Just Starlink
In a recent interview, Baron said: "In 10 years, I think the stock price will reach thousands of dollars. I think its valuation will reach $20 trillion, $30 trillion, or even $50 trillion. Elon thinks I'm estimating too low." He said he has "never seen" a company like SpaceX, whose potential goes far beyond rockets. He views Starlink as the primary source of future value. "Starlink alone will be worth about $14 trillion to $15 trillion over the next decade." In an August interview, Baron gave a more detailed forecast: Starlink's annual revenue could grow from $15 billion to $17 billion and reach $1 trillion within a decade, with annual profits of $700 billion to $800 billion. Baron also sees a bigger opportunity in orbital data centers. "Data centers in space, my God, that's incredible." He added that these facilities could avoid the power, water, and permitting constraints on Earth, and could ultimately be worth several times more than Starlink. Morgan Stanley analyst Adam Jonas has also highlighted SpaceX's computing ambitions. In a note excerpt shared by investor Sawyer Merritt on X, Jonas listed the "distributed inference cloud" as the company's most overlooked growth opportunity. He said the expansion of physical AI system networks could drive greater computing demand and predicted investors will pay more attention to this theme over the next year.
SpaceX Focuses on Ship 40 Heat Shield and Engine Data
Baron's investment thesis also depends on SpaceX reducing the cost of reaching orbit. He has said Starship could eventually lower launch costs from about $1,500 per kilogram to $150 per kilogram, giving the company a "tremendous advantage." SpaceX has now transported Ship 40, the Starship upper stage used for its 13th flight, back to Starbase. The vehicle survived its splashdown in the Indian Ocean and was transported to Texas. The company said the vehicle will provide "first-of-its-kind data" on a flown heat shield, Raptor engines, avionics, and other systems. In the interview, Baron also said his firm has invested about $2.5 billion in SpaceX since 2017, holding a 1.25% stake in the company. As of June, that stake was worth about $25 billion. In August, he said Baron Capital hopes to invest another $1 billion and expects to earn "hundreds of billions of dollars" from its SpaceX stake. The Baron First Principles ETF (RONB.US) gives investors exposure to Baron's SpaceX bet. As of Monday, the fund held 905,118 SpaceX shares, with SpaceX as its largest holding at about 41% of assets. The Baron First Principles ETF is down nearly 1% year-to-date, while the SPDR S&P 500 ETF Trust (SPY.US) rose 15% and the Invesco QQQ Trust (QQQ.US) rose 21% over the same period. His advice to friends is to keep adding to the position. "You should buy some SpaceX, and then keep buying every month," he said, adding that even if investors wake up worried they have taken on too much risk, they should keep buying. However, in August he said: "I have no idea at all what this stock will sell for in the short term." He also mentioned that after lockup expirations, about 270 million SpaceX shares were sold short, while more than 911 million shares held by early investors became eligible for sale. His confidence partly comes from previous bets on Musk. Baron said his firm invested $400 million in Tesla between 2014 and 2016 and has since earned about $7.7 billion. He expects that investment to grow another fivefold over the next 10 to 15 years. On Stocktwits, retail sentiment on SpaceX slid from bullish a week ago to bearish, with message volume at high levels. However, sentiment on the Baron First Principles ETF performed better, holding at neutral and recovering from bearish a day earlier, though retail attention has declined over the past three months, with followers down more than 10%. One user said: "Personally, I think we're just at the beginning of a major correction. I want to see $125 tested again before I consider opening a position." Another user lamented: "Can you imagine SpaceX reaching $2,000 by 2030? My $60,000 would be worth over $700,000, haha."
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