Billionaire investor Ron Baron says Tesla's valuation could reach $4 trillion – but SpaceX “has a chance to go even bigger”

by alex

Baron made billions by investing $570 million in Tesla between 2014 and 2016—about 2% of his assets at the time. In an interview with MarketWatch, he said he expects to earn 5 times more from the automaker over the next 7-8 years.

Ron Baron epitomizes the bullish buy-and-hold investing strategy that has performed well in the current environment. The billionaire manages a concentrated portfolio and has received handsome rewards from Tesla's development. He is currently listed on MarketWatch's list of the 50 most influential people in the markets.

Musk himself somewhat worriedly stated that Tesla “dug its own grave with the Cybertruck” and was worried about the ability of consumers to buy expensive cars in an environment of high interest rates. However, Baron appears more confident and says the automaker's shares will rise over time, with its market capitalization rising from the current $630 billion to $4 trillion within 10 years.

“At the end of the day, it won’t just be a car company or a battery company. We will become what Intel once was in computers. All cars will use Tesla's autonomous driving. Nobody else can compete,” Baron said.

At the same time, Ron is even more optimistic about SpaceX. The company, now the most active in rocket launches, and its large satellite Internet subsidiary are still private – but Baron expects to go public within the next three years.

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The billionaire invested about $700 million in SpaceX several years ago, and a recent secondary sale of shares on the private market valued the company at almost $150 billion.

“We think that by 2030 it will probably be worth about $500-600 billion. And then I hope to earn 10 times more money. I think SpaceX has a chance to become even bigger than Tesla,” Baron says.

Ron calls SpaceX satellite Internet “Internet for the planet,” which in some regions can be provided at a much lower price than competitors.


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But isn't it risky to bet on one person? Baron believes the risk was greater when Tesla and SpaceX were smaller companies with fewer people, but are now “overflowing” with great engineers and talented professionals. He added that 3.5 million people applied for jobs at Tesla and SpaceX last year.

“Getting a job at Tesla and SpaceX is harder than getting into Harvard,” Baron said. “He has the most brilliant people working there, and that won’t change.”

At the same time, Baron said, Musk himself is a “unique and irreplaceable force” at the companies.

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