Elon Musk Expects SpaceX to Make $500 Billion to $1 Trillion in Sales Next Year. Here's What That Means for the Stock.
He boasted that SpaceX SI is "a bit like the New York Yankees playing in Little League."
Elon Musk, SpaceX CEO, has expressed optimism about the company's potential to generate $500 billion to $1 trillion in annual sales by 2027. This ambitious projection was shared during the company's earnings call on October 20. SpaceX's revenue grew by 161% year-over-year in the third quarter, reaching $14.6 billion. However, CEO Musk believes the company can achieve much faster growth.
The company's newly renamed "super intelligence" business is expected to drive this growth, with revenue increasing by an astounding 830% year-over-year. This growth was fueled by new cloud computing agreements, the acquisition of code-writing AI specialist Cursor, and scaling the Grok AI model's enterprise business. The SI segment's operating profit more than doubled from a $1.7 billion loss to $431 million in the third quarter.
Musk's vision for SpaceX includes fully reusable orbital launch vehicles, an expanding Starlink satellite network, and a focus on AI-driven "virtual humans" through the Grok AI product. If SpaceX achieves even half of Musk's $500 billion sales target, the stock would be trading at a much more attractive valuation, with a price-to-sales ratio of less than 4.
However, investors should approach this forecast with caution, as Musk's predictions have not always materialized in the past.
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