Following its record IPO in June, SpaceX (NASDAQ:SPCX) has been getting far more attention than S&P 500 blue-chips like Alphabet and Tesla. Call it ‘shiny-new-thing syndrome’.

SpaceX isn’t in the S&P 500 yet due to sizeable AI-driven losses. But Alphabet — formerly Google — has been printing cash for 25 years. And in this time, it has put some of it to work by taking stakes in promising start-ups.

In 2015, Google invested $900m in a high-risk rocket venture called Space Exploration Technologies (aka SpaceX). Here’s how large that stake has become today.

A massive winner

Looking at the search and cloud computing giant’s latest 13F portfolio filing, the SpaceX position had ballooned to $94.18bn in value by the end of June. So this was a 105-bagger!

This was reflected in Q2, when Alphabet’s marketable securities line on the balance sheet almost doubled year on year to $186.5bn. And SpaceX made up roughly 95% of the firm’s stock portfolio.

For me, this monstrous return highlights how powerful buy-and-hold investing can be. It’s amazing what a massive winner can do — just ask Rolls-Royce shareholders since 2023.

Can SpaceX 100x again?

SpaceX has fallen 17% since 30 June. Even so, the firm commands a massive $1.85trn market cap. If it went up another 100 times in value, it would be worth more than every publicly traded company on Earth combined.

So not likely then!

But wait. CEO Elon Musk reckons that if the stars align, this is possible. Last month, he responded on X to a user questioning SpaceX’s massive AI spending: “You don’t seem to understand that SpaceX will be worth more than the rest of Earth if we accomplish our goals.”

For context, the IMF puts gross world product at approximately $120trn. In its IPO prospectus, SpaceX was more modest than Musk, putting its total addressable market at a mere $28.5trn.

Of course, it’s always wise to take such projections with an asteroid-sized pinch of salt. Musk said in 2022 that Tesla would eventually be worth more than Apple and Saudi Aramco combined. That currently doesn’t look likely.

The world’s largest moat?

Having said all that, I do think the market opportunity here is extraordinarily large. Because SpaceX already dominates the space launch and internet satellite markets, it has a massive head start on putting AI infrastructure into orbit.

If SpaceX can get its reusable Starship rocket working, which it’s getting closer to doing, then it will have the largest competitive advantage of any company on this planet, in my opinion.

It already delivers 80% to 90% of total earth mass to orbit per year with its Falcon rocket. Starship would put that close to 99% while collapsing the cost of doing so!

So while I don’t envisage it going up 50 times in value or anything daft, I do think SpaceX has the potential to become the world’s largest company by some distance.

But is the risk worth it?

In reality, its high valuation and lack of profits today makes it a high-risk stock. A major Starship setback would likely dent investor confidence in the timeline to sustainable profitability.

Nevertheless, given the unusually large growth potential, I’m going to embrace the risks and buy some shares for my portfolio. Then leave them for a decade, like Alphabet did.

Should you invest £5,000 in SpaceX right now?

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And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if SpaceX made the list?

Ben McPoland owns shares in Rolls-Royce.