Could Investing $25,000 in SpaceX Stock Help You Retire a Millionaire by 2045?

Wondering whether a modest investment in Space Exploration Technologies (NASDAQ: SPCX) can turn you into a millionaire feels like the kind of story finance websites were built to traffic. It's also the kind of analysis that gets sloppy once you stop cheering every hype narrative from Elon Musk and start taking a cold, hard look at the underlying fundamentals.

SpaceX is already priced like a mature empire. As of this writing (Sept. 25), the company boasts a market cap of $1.9 trillion. Turning a $25,000 initial sum into $1 million is a 40-times move. Simple math shows that this increases SpaceX's implied market cap toward $80 trillion. For reference, the value of the entire U.S. stock market as measured by the Wilshire 5000 lives in the mid-$70 trillions.

So before investors become enamored with Grok, Starlink, or Starship, sit with the joke hiding in plain sight: you are not asking whether SpaceX can get bigger. You're asking whether one company can effectively become the whole market.

Image source: Getty Images.

Will launching data centers into space actually work?

SpaceX is no longer marketing itself as a rocket launch company that dabbles in software development. Musk is trying to position SpaceX as an artificial intelligence (AI) business with a unique angle.

After acquiring xAI earlier this year, the firm's large language model, Grok, became the consumer and enterprise face of the AI bet. The industrial side of this playbook is launching orbital data centers --satellites that are basically server racks with solar wings that can talk to each other with lasers and cool themselves in an environment that does not send a hefty water bill.

This idea looks genius when sketched out on a whiteboard. After all, hyperscalers are running into bottlenecks here on Earth as it pertains to securing enough power and regulatory permits to build their data centers. The idea behind orbital data centers is that the hardware has access to sunlight almost around the clock and there's no city council up in space. If SpaceX can build this hardware cheaply, it will be in a position to do far more than just sell access to the internet through Starlink subscriptions.

Renting intelligence does not mean that Grok will win the chatbot war over ChatGPT, Claude, or Gemini. It really means that SpaceX has a vertically integrated platform across launch cadence, satellite manufacturing, and an in-house model stack. If Musk can pull this off, he's brought SpaceX a closed loop system that no other company would be able to copy quickly or at scale.

The bear case here is pretty simple: no one really knows how latency, radiation, thermal design, and replacement cycles are going to pan out in space. Even if the racks work, the more lucrative profits may still accrue to chip designers, frontier model developers, and the companies already collecting rent on accelerated computing. In other words, being the landlord of the sky is not the same thing as owning the tenant's business.

Investing in SpaceX can still make you a millionaire

Figuring out whether a $25,000 investment in SpaceX can make you a millionaire doesn't require an intense valuation analysis you'd see inside a spreadsheet on Wall Street. Let's just assume the market still awards SpaceX a rich price-to-sales (P/S) ratio two decades from now, say 20 times revenue. This means that an $80 trillion market value on 20 times sales is a business generating about $4 trillion a year in revenue.

Spoiler alert: That type of money won't come from a satellite business and occasional rocket launches. This level of growth implies that SpaceX evolves into a tollbooth on compute, bandwidth, and a large piece of the space economy at the same time and on global scale.

The takeaway here is to understand that markets can pay a premium for a long time. But even so, they won't make one ticker larger than the entire public U.S. economy. While investing in SpaceX stock could eventually lead to game-changing gains, turning a single sum of $25,000 into a seven-figure multibagger is not feasible.

If you are bought into Musk's vision and have high conviction in SpaceX's multi-decade trajectory, a better strategy is to use dollar-cost averaging over a long-term time horizon. Buying fixed amounts of SpaceX stock at different price points over time is a more prudent and practical way of turning a buy-and-hold position into a long-term winner.

Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.