With around $10,000, investors could buy 70 shares of EspaceX (NASDAQ: SPCX) now, and the stock could more than double over the next year.
CEO Elon Musk shocked many investors during SpaceX’s third-quarter earnings call when he predicted the company could end 2027 with annual recurring revenue (ARR) between $500 billion and $1 trillion. Prior to the quarterly report, analysts predicted that the space company would generate revenue of $132.4 billion in 2027 and $249.4 billion in 2028. Although ARR and revenue are quite different metrics – ARR is more akin to a year-end revenue rate – the clear implication is that Musk believes SpaceX can blow away Wall Street’s revenue consensus.
Did you miss “Act 1” of AI? Act 2 could be 14 times 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 “
After the October 20 report, analysts naturally scrambled to increase their revenue targets. This includes Brian Gesuale of Raymond Jameswhich roughly doubles its revenue estimates for SpaceX through 2028, while maintaining a market-high $800 price target for the stock. Consensus on SpaceX’s revenue now stands at $180.6 billion for 2027 and $330.9 billion for 2028. That’s still far from what Musk’s forecast would imply, although that average is likely to drift upward as more analysts make upward revisions.
How SpaceX Reaches Over $500 Billion in ARR in 2027
There are several ways SpaceX could achieve over $500 billion in ARR by the end of 2027 as a standalone company. The main driver of revenue growth will be AI infrastructure rental. Because SpaceX uses short-term leases for its data center capacity, it currently has strong pricing power in a compute-starved world. From the moment the capacity comes online and is leased, SpaceX hopes to recoup its initial investments in this capacity in about a year. Given the rapid pace at which it hopes to start generating profits on these investments, we can expect the company to aggressively increase its investments to develop additional computing capacity.
In its second-quarter report, SpaceX predicted it would end the year with 2 gigawatts of computing power; three months later, Musk said he could end 2026 with up to 3 gigawatts. However, the biggest change in his forecast was for 2027. During the company’s second-quarter call, Musk said SpaceX would likely end 2027 with a cumulative computing capacity closer to 10 gigawatts than 5 gigawatts. During the third-quarter earnings call, however, he predicted that SpaceX would end 2027 with about 13 gigawatts of computing capacity, with a long-term goal of adding 20 gigawatts of additional computing power next year.
If SpaceX achieved a one-year ROI on its chips, servers, and networks, that would imply more than $400 billion in additional ARR by the end of 2027 on an additional 10 gigawatts of computing power and more than $520 billion based on its cumulative 13 gigawatts of computing power. Nvidia gets about $40 billion in revenue per gigawatt of computing power with its Vera Rubin platform, which SpaceX uses in its data centers, so the math is pretty simple. Meanwhile, if the company somehow managed to reach its long-term goal of 23 gigawatts, that would represent more than $920 billion in revenue.
In addition to expanding the capacity of its AI infrastructure, SpaceX is also looking to generate revenue from its new reusable Starship rocket. Its goal is to launch Starships weekly in the first half of 2027, then increase the frequency to twice a week in the second half. Since Starship has a much greater payload capacity than its Falcon 9 rocket, it will be able to generate significantly more revenue. However, the company still needs to prove that it can reliably recover and reuse both stages of the larger rocket.
SpaceX also appears ready to take on the US mobile market, having recently agreed to acquire spectrum. It is also reportedly in talks to gain access to 80,000 cell tower sites in the United States. If it can successfully compete in this market, it would be another interesting revenue stream for the company.
Image source: The Motley Fool.
A stock over $300 by the end of 2027
The possibility that SpaceX could generate $800 billion or more in revenue in 2028 seems realistic. This would assume an AI-generated revenue rate of more than $500 billion by the end of 2027, then adding more than 10 additional gigawatts of computing power in 2028, as well as Starship, Starlink and its other businesses. Let’s assume that the stock is trading at this point at a forward price-to-sales (P/S) multiple of between 5 and 10, and that SpaceX would have a market cap of around $8 trillion.
However, we should assume that the company will make equity raises to cover the costs of some of these capital expenditures. So let’s also assume that it will increase its share count from 1.4 billion shares to 15 billion to raise about $200 billion. That would leave the stock valued between $300 and $530 per share, making a stake of 70 shares worth between $21,000 and $37,000 by the end of 2027. That makes the stock a buy.
Should you buy Space Exploration Technologies stock now?
Before buying Space Exploration Technologies stock, consider this:
THE Motley Fool Stock Advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now…and Space Exploration Technologies was not one of them. The 10 stocks selected could produce monster returns in the years to come.
Consider when Netflix made this list on December 17, 2004…if you had invested $1,000 at the time of our recommendation, you would have $344,608!* Or when Nvidia made this list on April 15, 2005…if you had invested $1,000 at the time of our recommendation, you would have $1,327,222!*
Now it’s worth noting Equity Advisor the average total return is 904%, an overwhelming outperformance compared to the S&P 500’s 211%. Don’t miss the latest top 10, available with Equity Advisorand join an investor community built by individual investors for individual investors.
See the 10 values »
*Stock Advisor returns October 27, 2026.
Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool Ranks and Recommends Nvidia. The Mad Motley has a disclosure policy.
What a $10,000 investment in SpaceX could be worth by the end of 2027 after Elon Musk’s shocking revenue forecast was originally published by The Motley Fool
