Could Investing $10,000 in SpaceX Make You a Millionaire?

Long-term investing can be an incredible path to wealth creation. For example, a $10,000 investment in Nvidia made just 10 years ago would now be worth roughly $1.84 million.

With Space Exploration Technologies (NASDAQ: SPCX) coming hot off a very successful initial public offering (IPO), investors may be wondering whether the stock could mint millionaires off a similar level of principal investment. Read on for a look at whether it's a realistic possibility that a $10,000 investment in SpaceX stock could be worth $1 million someday.

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Putting SpaceX's path to $1 million in perspective

For a $10,000 investment in SpaceX to turn into $1 million, the company's share price would have to increase by 100 times. Based on the company's current share count and market capitalization of $2.42 trillion, that would mean SpaceX would need a market capitalization of roughly $242 trillion.

For a point of reference, Nvidia is currently the world's most valuable company and commands a market capitalization of roughly $5.1 trillion. For a bit of additional perspective, global gross domestic product totaled roughly $117 trillion last year. At a market cap of $242 trillion, SpaceX would be valued at more than two times 2025's global GDP.

SpaceX already carries a massive price-to-sales ratio

SpaceX CEO Elon Musk has said the company could hit $1 trillion in revenue in 2030. If the business were to hit that milestone, the stock would almost certainly see massive gains above current levels.

SpaceX's revenue increased 33% to reach $18.7 billion last year, and the company is currently valued at approximately 129 times that sales figure. Hitting $1 trillion in revenue would mean growing revenue 5,248% over last year's level -- or a compound annual growth rate of 121.6% over five years. If SpaceX were able to hit $1 trillion in revenue in 2030, it would almost certainly continue to grow rapidly from there.

If SpaceX were to reach $2 trillion in revenue and carry a market capitalization of roughly $242 trillion, it would be valued at approximately 121 times revenue. Again, the company currently carries a trailing price-to-sales ratio of 129, based on $18.7 billion in sales last year. Of course, both of those valuation profiles are enormously growth-dependent -- and it's worth mentioning that SpaceX currently looks like one of the most expensive stocks on the market.

SpaceX could turn $10,000 into $1 million, but there's a big catch

Over a 50-year timeline, it's actually feasible that SpaceX could hit a $242 trillion market cap based on its current share count. The stock price would need to deliver a CAGR of roughly 9.7% over half a century for the company to achieve that target. Meanwhile, the S&P 500 index has actually seen an annualized, dividend-adjusted total return of 11.7% over the last 50 years. Of course, inflation will likely mean that $1 million will have far less real purchasing power 50 years from now.

If SpaceX capitalizes on the massive growth in the artificial intelligence market and the space industry continues to expand rapidly, the company could post explosive sales and earnings momentum. On the other hand, investors shouldn't expect a $10,000 position in the company to turn into a $1 million holding anytime soon.

Nvidia was able to mint millionaires off a $10,000 investment within a decade, in part because the company started at a much lower valuation. By comparison, SpaceX hit the market as one of the world's most valuable publicly traded companies and currently ranks sixth on the list by market cap.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.