Billionaire Ron Baron believes that his firm’s $25 billion stake in Elon Musk’s rocket company, SpaceX (SPCX), will soar in value over time.
In a new CNBC interview, the Baron Capital founder and CEO says he expects the firm to make “hundreds of billions of dollars” from its SpaceX investment.
Baron lays out the math for how he thinks SpaceX will go from a market cap of roughly $2 trillion to $14 trillion in a decade.
“And I think that in 10 years, the revenue will go from $13 or $14 billion from Starlink to about a trillion. So I think there’ll be a trillion dollars in revenue in 10 years, and about $700 or $800 billion in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), and that’s going to be worth somewhere around $14 trillion, $14 trillion. The whole company’s now valued at $2 trillion. That is just Starlink. So basically, you’re going to make seven times your money just for Starlink… And that’s still an immature business.”
On top of Starlink, Baron highlights that SpaceX will likely launch data centers into space by next year to generate additional revenue.
“Then you have compute AI. That’s data centers in space. If you want to have AI, you have to have data centers. Data centers, you can’t build on Earth anymore,
on our planet anymore, in the United States anymore, without political disruption.”
SPCX is trading at $191.82 at time of writing.
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