Prediction: Here's What $300 Invested in SpaceX Could Be Worth in 2030

Space Exploration Technologies (NASDAQ: SPCX) may have hit the public markets less than four months ago. But with a market cap of $1.9 trillion, it is already one of the largest companies in the world -- mainly due to the value it accumulated during the two decades it spent as a private company.

Now, investors will be keen to know if SpaceX can continue creating value during the coming years as it pours capital into its space business while expanding to new opportunities like generative artificial intelligence (AI). Let's dig deeper to decide what a $300 position might be worth by 2030.

This is a very expensive stock

Before considering a position in SpaceX stock, investors must come to grips with how expensive the company already is. With a forward price-to-earnings (P/E) multiple of 200, the shares are roughly 10 times pricier than the average S&P 500 company. This makes SpaceX even more expensive than other notoriously expensive companies, like electric-vehicle (EV) maker Tesla, which trades at 159 times forward earnings.

Tesla's example shows that Elon Musk-affiliated companies can maintain unusually high valuations for a long time without crashing. And this may have something to do with Wall Street's confidence in Musk's willingness and ability to pioneer new opportunities that would scare off other executives. Still, investors shouldn't expect SpaceX's Musk premium to last forever. Over the long term, the company will need to grow into its current valuation before it offers a realistic chance of generating good returns for new investors. So far, the results are encouraging.

Second-quarter results were a slam dunk

SpaceX's second-quarter results represented its first earnings report as a public company, and the numbers were very encouraging. Revenue soared 92% year over year to $7.81 billion because of strength in all the company's segments, but especially connectivity (mainly because of the fast-growing Starlink) and AIa.

Starlink is a satellite-based broadband internet service that lets clients access the internet in remote and difficult locations like airplanes, ships, and rural areas where there is less traditional infrastructure. The platform has also taken off among military users and has been key to the Ukrainian armed forces' fight against the Russian invasion. It also won a $2.29 billion contract with the U.S. Space Force to build a secure communications network for military sensors and weapons platforms.

For investors, SpaceX's Starlink business is particularly appealing because of its deep economic moat. As the world's largest and most advanced rocket company, it sends its own satellite constellations into space instead of relying on third parties. This can allow for higher volumes of satellites to be transported to space and at lower costs compared to potential rivals.

Image source: Getty Images.

But although SpaceX's connectivity business is impressive, it isn't enough to justify the company's sky-high valuation. The company's price tag suggests many on Wall Street believe its burgeoning AI infrastructure business could eventually outcompete rivals with space-based data centers -- a concept that involves using satellites equipped with computing hardware to process AI workloads in space.

This strategy could lower costs by taking advantage of abundant solar energy, but it remains highly speculative because of uncertainties surrounding maintenance, radiation, and space debris.

SpaceX might be too expensive to beat the market

Although SpaceX could enjoy explosive growth during the next four years, much of this is already priced into the company's current valuation -- tempering how much stock price appreciation investors should expect.

A $300 investment made right now will probably perform in line with the S&P 500's average annual return of 10%. And that would make the position worth $439.23 by this time in 2030. Investors who want better returns should consider waiting for a cheaper entry point.

Will Ebiefung 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.