SpaceX Is a Secret Autonomous Driving Stock. Here's Why.

Now that the Space Exploration Technologies (NASDAQ: SPCX) initial public offering (IPO) is complete, expect the company to start deploying its newfound capital. Originally, the company doing business as SpaceX targeted a capital raise that would provide it with $75 billion in fresh cash. The IPO was so successful, however, that the company ended up raising closer to $86 billion.

If you're a fan of SpaceX, it's critical that you track the company's ongoing spending spree. SpaceX has a huge amount of growth potential ahead of it. Nearly all of its growth initiatives, however, are capital-intensive. Therefore, investors should expect the company to deploy its new capital hoard quickly and aggressively. With a market cap now north of $2 trillion, expect the company to raise even more capital in the future -- all of which should eventually end up in the hands of SpaceX's suppliers.

Which company will benefit most from SpaceX's spending? Tesla (NASDAQ: TSLA) should be at the top of the list.

SpaceX CEO Elon Musk has a long history of sharing resources across his portfolio of companies. That practice should continue, with much of SpaceX's spending directly and indirectly benefiting Tesla. SpaceX's spending will be so critical to Tesla's long-term success that it wouldn't be too far of a stretch to consider SpaceX an autonomous driving stock. Take a look at the numbers discussed below, and you'll likely reach the same conclusion.

Here's why SpaceX is critical to Tesla's autonomous driving ambitions

Take a close look at SpaceX's IPO prospectus, and one thing becomes clear: artificial intelligence (AI) will be absolutely crucial to the company's long-term growth. SpaceX claims that it has a total addressable market of $28.5 trillion -- a figure the company calls "the largest actionable total addressable market in human history." Rockets and satellites, however -- two things the company is arguably known most for -- only account for a small minority of that sum. More than 90% of SpaceX's claimed total addressable market is exclusively related to one opportunity: AI.

As such, expect a disproportionate amount of SpaceX's upcoming spending spree to be dedicated toward scaling its AI business. To be sure, the company's AI business spans a wide array of verticals and end markets. But there's no doubt that a lot of this new compute power will be used to advance models related to autonomous driving.

Earlier this year, Tesla took a $2 billion stake in xAI, Musk's AI start-up. The following month, xAI merged completely with SpaceX. Due to this financial maneuvering, Tesla has a direct stake in xAI's future. And given experts increasingly agree that AI is critical to developing self-driving capabilities, expect Tesla to lean heavily on xAI -- and thus SpaceX -- to deliver on its self-driving ambitions.

Image source: Tesla.

Attaining full autonomy isn't just about selling cars. It's also about targeting huge emerging growth opportunities like robotaxis. "We think $8 trillion to $10 trillion for the entire autonomous taxi opportunity throughout the world, from almost nothing," is possible, predicts Cathie Wood, the CEO of Ark Invest. "That's how quickly AI is going to cause these things to happen." If Tesla wants to ensure its slice of that multitrillion-dollar pie, it will need SpaceX to deliver on its own AI investments.

In a nutshell, because AI is so critical to autonomous driving, SpaceX actually may hold the keys to Tesla's self-driving future. That's likely the main driver behind Tesla's $2 billion investment in xAI earlier this year. Clearly, Musk wanted to make sure Tesla would benefit from the SpaceX IPO, with direct access to the results of xAI's increased investment. So while SpaceX has exposure to many other industries, including rockets, satellites, and AI in general, investors can throw autonomous driving into the basket of growth catalysts that SpaceX is pursuing long-term. SpaceX's Starlink internet service has already been cleared as a data backbone for autonomous vehicles.

To be sure, SpaceX is far too diversified to be considered a pure-play autonomous driving stock. But its growth potential in this area has been made clear through previous investments and Tesla's direct financial involvement.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.