Key Points
-
SpaceX’s super intelligence division grew at an 830% pace in Q3.
-
Even if it repeats that growth rate over the next year, it would not be enough for SpaceX to hit Musk’s bold revenue projection.
-
Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, has a CEO who is known for making extraordinarily optimistic predictions about his companies’ futures. Elon Musk keeps offering these sky-high projections, even though his companies frequently fail to deliver. However, he’s not always as far off as people think, and his latest projection is simply jaw-dropping.
During SpaceX’s third-quarter earnings call, he claimed that it wasn’t out of the question for the company to achieve annual recurring revenue of $500 billion to $1 trillion by the end of 2027. A result like that could easily vault SpaceX’s market cap to the world’s largest, but what would the stock price be?
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
SpaceX could become a $10 trillion company if Musk’s call is correct
For argument’s sake, let’s say that SpaceX can somehow generate $1 trillion in annual recurring revenue (ARR). Now, the language that Musk used is important, because hitting that target would not require SpaceX to produce $1 trillion in total revenue in 2027. What it would need to do is achieve annualized recurring revenue of that level in the fourth quarter. So, what investors would be hoping for is for its “super intelligence” (SI) segment (formerly called the artificial intelligence segment) to reach about $250 billion in quarterly revenue by Q4 of next year.
Should SpaceX hit the $1 trillion ARR mark and trade at 10 times sales (that’s about average for most big tech companies), that would give it a market cap of 10 trillion. Right now, Nvidia, the world’s largest company, has a $5.3 trillion market cap, while SpaceX is a $1.9 trillion company trading for about $138 per share. So, if the $10 trillion market projection came true, SpaceX’s stock price would rise from about $138 to about $736. That would be a monster gain in just a year or two, but that implies some pretty incredible growth figures.
Is this even possible?
SpaceX’s growth rate must be very quick to hit this level
What’s spurring Musk to give this projection is the incredible growth that its SI division delivered in Q3. It grew 830% from $813 million last year to $7.56 billion this year. So, what happens if SpaceX’s revenue grows 830% again by this time next year? That would amount to about $70 billion in revenue.
To get to an annual recurring revenue of $1 trillion, SpaceX’s overall recurring revenue figure must be around $250 billion each quarter. So, even that optimistic projection for the contribution from the SI segment alone would fall well short of what’s necessary. Of course, SpaceX’s Starlink service will still contribute to annual recurring revenue, but the result would still be far short of $250 billion.
SPCX Revenue (TTM) data by YCharts.
Even if one looks only at the low end of that projection range, an ARR of $500 billion still requires about $125 billion in quarterly recurring revenue by Q4 2027.
So, I think SpaceX will fall far short of Musk’s latest bold prediction. However, I think investors need to understand what his projection is implying. SpaceX is seeing incredible and insatiable demand for AI products. As a result, its revenue growth will likely stay rapid or even accelerate over the next year. Regardless of whether the company falls short of Musk’s projection, one thing that is clear is that SpaceX is becoming a powerful force in the AI industry and could be one of the top companies to be reckoned with.
I think that’s the major takeaway here, and if you can shift your mindset from thinking about SpaceX as a space stock to thinking about SpaceX as an AI stock, then I think it could be a profitable investment to make.
Should you buy stock in Space Exploration Technologies right now?
Before you buy stock in Space Exploration Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $336,195!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,241,567!*
Now, it’s worth noting Stock Advisor’s total average return is 875% — a market-crushing outperformance compared to 208% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of November 3, 2026.
Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
