Here Is What a $5,000 Investment in SpaceX Could Be Worth by 2028

I'll admit it; I was a Space Exploration Technologies (NASDAQ: SPCX) skeptic when it first debuted on the public markets in June. While I wasn't skeptical of the business, I was skeptical of the $2 trillion valuation it went public at. However, my opinion has shifted a bit, especially after seeing its latest results.

The third-quarter report was incredible, and included several exciting developments for investors. All of this has me considering investing in SpaceX's stock, so I wanted to run some hypothetical calculations to see what kind of returns the stock could conceivably deliver through 2028.

I think there is a good chance SpaceX will be a far bigger company than it is right now in a couple of years, and that it could turn a $5,000 investment made today into a position worth $12,500 by the end of 2028.

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SpaceX is doing great in every area except the one you'd expect

SpaceX splits its business into three parts: space, connectivity, and "super intelligence" (its new name for what it previously called artificial intelligence). Space is the division you likely think of first when SpaceX comes to mind. It includes the impressive technology that launches rockets into space and lands them safely back on Earth for reuse on future missions. The reality is that this division doesn't hold a candle to the other two despite being the company's primary segment. The space division grew from $962 million in Q2 to $1.77 billion in Q3 -- strong, but still far less than what its other divisions delivered. However, its year-over-year growth was from $1.67 billion to $1.77 billion -- not much of an increase.

Its connectivity division delivered another impressive quarter. This division is essentially the Starlink broadband service, which can provide satellite-based internet connectivity to customers in almost every part of the world. Its revenue increased from $3.1 billion last year to $5.3 billion this year. However, what's more notable about connectivity is that its operating income totaled $2.37 billion, which was a major factor in SpaceX delivering its first profitable quarter.

But the super intelligence segment stole the show in Q3, as it delivered 830% growth. With revenue totaling $7.56 billion (up from $813 million a year ago), it is now SpaceX's largest division. This rapid growth rate could persist for some time, as demand for AI products (like its Grok AI model or Grok Bots) is rapidly increasing.

SpaceX has a pretty broad range of businesses, but where will that lead the stock in a few years?

Projecting SpaceX's stock price is no easy task

SpaceX's wide-ranging businesses make it harder to estimate than most other businesses. Additionally, we don't have a full year's worth of public results to give us a clearer picture of the space segment's seasonality. However, CEO Elon Musk has asserted that the company's annual recurring revenue could reach $500 billion to $1 trillion by the end of 2027. Musk is known to make ambitious predictions for his companies and then miss those targets, but even then, they do sometimes come close. And SpaceX could undershoot Musk's forecast and still deliver impressive results.

But let's consider what SpaceX stock might look like if it ends up generating $500 billion in revenue by the end of 2028.

Depending on how it is valued and where its profit margin lands, there are a wide range of outcomes. Most big tech companies tend to trade for about 10 times sales, with some being higher or lower based on market sentiment. Should SpaceX trade at 10 times sales and reach $500 billion in revenue, that would value the stock at $5 trillion, or about 150% higher than it's priced today.

That would turn a $5,000 investment into about $12,500 in just a few years, making SpaceX a stock that investors should consider buying now.

Keithen Drury 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.