Companies like Meta Platforms are placing huge bets on AI. Meta’s capital expenditure has climbed from $27bn in 2025 to $135bn – $145bn projected for 2026 and as much as $205bn projected for 2027. Returns on this huge spending will take time to come through, and some investors fear may never come through, which creates pressure on the share price.
On the positive side if they do come through and Meta’s track record entitles it to be given the benefit of the doubt there could be a surge in profits in future years. Zuckerburg, buoyed by the successful launch of Muse with its impressive agentic capabilities sees a golden future. He would but I, yeah, what do I know, am inclined to agree with him.
This makes Meta an excellent candidate for a $-cost averaging programme. Other mega caps spending on a gigantic scale are Microsoft, Alphabet and Amazon, which is presently the biggest spender of all with projected cap ex of $220bn plus. This compares with a total spend by the whole of British industry of around $422bn, so Amazon plus Meta Platforms are on course to spend as much as the entire UK private sector. Amazon was only founded 33 years ago and Meta Platforms has only existed for 23 years. This is what can happen in a dynamic economy.
There is another incredible US company which didn’t exist 23 years ago and is now reporting astounding achievements on a regular basis – SpaceX. If we had just one company. like this in the UK we would be thrilled and we did, plenty of them, in the Victorian era, when towering entrepreneurs and engineers were reinventing human civilisation. Now all the people of that ilk are in America where they operate in a culture which is supportive of such great human achievements. Americans are thrilled by their great business titans. In the UK we do our best to persuade them to emigrate.
Somebody said to me the other day that Elon Musk is by a distance the greatest entrepreneur and engineer the world has ever seen. I agree. There is a reason why he is the world’s richest man, not because he is so greedy for money, which on a personal level he hardly seems to need, but because it is an inevitable by-product of his staggering achievements. Every company that he builds seems to be the launch pad, to coin a phrase, for the next one.
This makes SpaceX a perfect candidate for $-cost averaging. Nobody has a clue how to value the business – $1 trillion, $2 trillion, $5 trillion. It all depends how investors feel and on extraneous factors like wars and long-dated bond yields. But one thing seems highly likely. As the years pass the value awarded to the company may range wildly but it will do so around a strong secular uptrend. One day investors will value Space X much more highly than they do today.
Here is a flavour of what Elon thinks could happen at Space X.
I think Grok bot may end up being what uses most of our Super Intelligence compute. So I mean in a nutshell, what this implies for SpaceX annual recurring revenue by the end of ’27 is somewhere between $500 billion and $1 trillion.
Then lets wind backwards to what is happening currently.
We delivered another strong quarter in Q3. Revenue grew an impressive 161% year-over-year to $14.6 billion, fueled by the continued momentum in the connectivity business and our clear inflection point in the Super Intelligence or SI business. Adjusted EBITDA once again grew faster than revenue to $8.8 billion, up 306% year-over-year. The combination of our launch leadership, recurring Starlink revenue and the significant expansion of our SI infrastructure business have combined to drive meaningful operating leverage in the business. Our balance sheet remains very strong, and our focus on capital allocation continues to keep us in a position to accelerate the pace of innovation that underpins the significant revenue opportunity across all of our businesses.
In 2025 SpaceX had revenue of $18.7bn so the implied growth through 2027 is almost unbelievable. Musk doesn’t always walk the talk but usually gets there in the end and with $1 trillion of revenue, cash flow at the company would go through the roof opening an exciting world of new possibilities. Unlike analysts I won’t try and figure out where a trillion dollars of revenue will come from; just the possibility is enough.
Share Recommendations
Space Exploration Technologies SPCX
Strategy – Aim For The Stars
SpaceX is perfect for a $-cost averaging programme because it is growing explosively, has cosmic ambitions, to again coin a phrase, has one of the world’s all-time great entrepreneurs at the helm and is impossible to value. From my point of view that is a dream scenario. Analysts put most of their energy into trying to value companies. I don’t. My energy goes towards finding the most exciting companies , which, are so often, the usual suspects. I then use $-cost averaging to make sure that my buying price, over time, settles at a reasonable level. If you buy only once it is hard to get it right although most often that too will work if your holding period is long enough. $-cost averaging makes a reasonable entry price a certainty.
