What a $10,000 Investment in SpaceX Could Be Worth by the End of 2027 After Elon Musk's Shocking Revenue Guidance

With about $10,000, investors could buy 70 shares of SpaceX (NASDAQ: SPCX) now, and the stock could more than double over the next year.

CEO Elon Musk shocked many investors on SpaceX's third-quarter earnings call when he projected the company could end 2027 with annual recurring revenue (ARR) of between $500 billion and $1 trillion. Ahead of the quarterly report, analysts were projecting that the space company would generate revenue of $132.4 billion in 2027 and $249.4 billion in 2028. While ARR and revenue are quite different metrics -- ARR is more akin to a year-end revenue run rate -- the clear implication is that Musk thinks SpaceX can blow away Wall Street's revenue consensus.

After the Oct. 20 report, analysts naturally were scrambling to raise their revenue targets. This includes Brian Gesuale of Raymond James, who roughly doubles his revenue estimates for SpaceX through 2028, while keeping a market-high $800 price target on the stock. The consensus for SpaceX revenue is now up to $180.6 billion for 2027 and $330.9 billion for 2028. That's still a far cry from what Musk's forecast would imply, although that average is likely to drift higher as more analysts make upward revisions.

How SpaceX gets to more than $500 billion in ARR in 2027

There are a few ways for SpaceX to get over $500 billion in ARR by the end of 2027 as a stand-alone company. The biggest driver of revenue growth is going to be leasing out AI infrastructure. Because SpaceX is using short-term leases for data center capacity, it currently commands strong pricing power in a compute-starved world. From the point that capacity comes online and gets leased, SpaceX expects to recoup its upfront investments in that capacity in about a year. Given the rapid pace at which it expects to start turning a profit on those investments, we can expect the company to aggressively increase its capex to build out additional compute capacity.

In its second-quarter report, SpaceX forecast that it would end the year with 2 gigawatts of computing power; three months later, Musk said that it could end 2026 with up to 3 gigawatts. However, the biggest change in his forecast was for 2027. On the company's Q2 call, Musk said SpaceX would likely end 2027 with cumulative compute capacity closer to 10 gigawatts than 5 gigawatts. On the Q3 earnings call, though, he predicted SpaceX would end 2027 with around 13 gigawatts of compute capacity, with a long-shot goal of adding a massive 20 gigawatts of incremental computing power next year.

With SpaceX getting a one-year payback on its chips, servers, and networking, that would imply over $400 billion in additional ARR by year-end 2027 on an incremental 10 gigawatts of computing power and over $520 billion based on its cumulative 13 gigawatts of compute power. Nvidia gets around $40 billion in revenue per gigawatt of compute power with its Vera Rubin platform, which is what SpaceX is using in its data centers, so the math is pretty straightforward. Meanwhile, if the company were somehow able to pull off hitting its long-shot goal of 23 gigawatts, that would be over $920 billion in revenue.

On top of expanding its AI infrastructure capacity, SpaceX is also looking to drive revenue through its new reusable Starship rocket. Its goal is to launch Starships weekly in the first half of 2027, and then increase the frequency to twice a week in the second half. Given that 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 has to prove that it can reliably recapture and reuse both stages of the larger rocket.

SpaceX also appears set to go after the U.S. mobile market, having recently agreed to acquire spectrum. It's reportedly also in talks to gain access to 80,000 U.S. cell tower sites. If it can successfully compete in this market, that would be another nice revenue driver for the company.

Image source: The Motley Fool.

A $300-plus stock by the end of 2027

The possibility that SpaceX could generate $800 billion or more in revenue in 2028 is looking realistic. This would assume an over $500 billion year-end 2027 AI revenue run rate, and then adding another 10-plus gigawatts of compute power in 2028, plus Starship, Starlink, and its other businesses. Assume that the stock will at that point trade at a forward price-to-sales (P/S) multiple in the 5 to 10 range, and SpaceX would have a market cap of around $8 trillion.

However, we should assume that the company will conduct some equity raises to cover the costs of some of those capital expenditures, so let's also postulate that it will increase its share count by 1.4 billion shares to 15 billion to raise around $200 billion. That would leave the stock valued at between $300 and $530 per share, making a 70-share stake worth between $21,000 and $37,000 by the end of 2027. That makes the stock a buy.

Geoffrey Seiler 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.