Baron Capital’s $3 billion SpaceX investment was worth about $25 billion in June, and the firm wants to invest another $1 billion.
- Baron warned that short sellers could face heavy losses after about 270 million SpaceX shares were sold short.
- He expects Starlink to reach $1 trillion in annual revenue and eventually command a $14 trillion valuation.
- Baron said orbital AI could dwarf Starlink, while Starship may cut launch costs to $150 per kilogram.
SpaceX (SPCX) shares slipped over 1% overnight late Monday after a three-session rally, but longtime Elon Musk backer Ron Baron dismissed the short-term weakness and forecast as much as 40-fold upside to the stock.
SPCX stock gained 4% on Monday and closed above its $135 initial public offering price for the first time since July 15, rebounding from a recent low of $108.27.
Ron Baron Sees 40x SpaceX Upside
Baron Capital has invested $3 billion in SpaceX since 2017. Baron said that the stake was worth about $25 billion in June and remains valued above $20 billion. His firm now wants to invest another $1 billion. “We think we’re going to make hundreds of billions of dollars, not billions, hundreds of billions,” Baron said, predicting that SpaceX could rise “20, 30, 40 times” over the long term.
However, he declined to forecast near-term price moves. “I don’t have a clue about what this stock is going to sell for in the short term. Not a clue,” he said.
SpaceX’s first post-IPO lockup expiration made more than 911 million early-investor shares eligible for sale, fueling volatility and pushing notional short interest above Tesla’s. Baron said about 270 million SpaceX shares were sold short within several weeks.
“When it stops going down, there’s 270 million shares that people got to buy,” he said. “And if they don’t buy it, they’re going to go bankrupt.” He also called Wall Street’s focus on near-term price moves “a waste of brainpower for people to worry about pennies and nickels and dimes.”
Baron: Starlink Could Be Worth $14 Trillion
Baron called SpaceX the most distinctive company he has encountered during his 56-year investing career. “In 56 years, there hasn’t been a single company that I’ve seen like SpaceX, not one,” he said. “Most people think, oh, it’s a rocket company. It’s way more than that.” Baron expects Starlink to grow from roughly $15 billion to $17 billion in annual revenue to $1 trillion within a decade, generating between $700 billion and $800 billion in yearly profit.
“$14 trillion for Starlink alone, and the entire company is now being valued for less than $2 trillion,” he said.
Baron also believes orbital AI data centers could become three to four times more valuable than Starlink by using solar energy and avoiding terrestrial electricity, water and permitting constraints. SpaceX could deploy orbital data centers within three years and eventually generate “several trillion” dollars in annual revenue, he said. Starship is key to the vision. Baron expects it to cut SpaceX’s launch cost from about $1,500 to $150 per kilogram. “So tremendous advantage. Nobody can compete,” he said.
SpaceX Targets $100B Revenue Run Rate
SpaceX reported second-quarter revenue of $7.81 billion, beating Wall Street’s $6.93 billion estimate in its first earnings report since its June market debut.
CFO Bret Johnsen said the company is on track to reach $100 billion in annualized recurring revenue by year-end. Deutsche Bank called that goal “likely very achievable,” citing expected contributions from the company’s neocloud business and its acquisition of AI coding company Cursor.
How Do Retail Traders Feel About SPCX?
On Stocktwits, retail sentiment for SPCX has been ‘bullish’ over the past week amid a 417% jump in 24-hour message volumes.
One user said, “$SPCX I'm gonna buy this at 69.42, same as $TSLA . These two companies will get merged at $69.42 and then we can 10x from there. Right now it's just too much Elon premium which will eventually fade.”
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Another user said, “$SPCX still undervalued and momentum bullish”
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SPCX stock has declined 14% over the past three months.
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