Space Exploration Technologies (NASDAQ: SPCX) made its name by revolutionizing the space travel industry. The company's work on reusable rockets has enabled it to significantly reduce launch costs, making it the clear leader in the field. The company is working on a next-gen, fully reusable rocket, Starship, that could transform its grand space ambitions into reality.
But what if the company's space-related efforts become a minuscule part of its business as it taps into much more lucrative opportunities elsewhere? That may power exceptional stock market returns. And according to CEO Elon Musk, that's what could happen within four or five years.
Let's dig into what Musk said and what it means for investors. This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » SpaceX operates three business segments. In addition to its space business, the company owns Starlink, which provides internet connectivity through a large network of Low Earth Orbit satellites.
SpaceX is also the leader in this industry. Then there is the company's artificial intelligence (AI) unit, where it offers several services, including access to Grok, a family of large language models (LLMs). SpaceX also offers cloud and AI compute infrastructure services.
In the company's Form S-1 (a required filing in the U.S. before a domestic company can go public), SpaceX argued that the large majority of its total addressable market (TAM) was in the AI industry. The rocket company estimated that its AI TAM was $26.5 trillion of the $28.5 trillion total opportunity it has identified across its entire business. And Musk thinks that within four or five years, AI will be 99% of SpaceX's value.
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