Ron Baron has made SpaceX the largest holding in his $66.6 billion portfolio, even as the stock trades below his average cost. His conviction echoes his earlier Tesla strategy, but the risks and scale are even greater this time
When Ron Baron commits to a company, he does so with conviction and patience. The billionaire investor, known for holding Tesla through years of volatility and skepticism, has now made an even bigger wager on SpaceX, turning it into the single largest position in his $66.6 billion Baron Capital portfolio. As of June 30, 2026, Baron Capital reported owning 145,775,000 shares of SpaceX, valued at $24.9 billion, according to SEC filings. This stake represents 37.4% of the firm's total assets, with an average cost basis of $170.86 per share-well above SpaceX's recent closing price of $136.97.
Baron's approach is not about chasing short-term gains. He is known for buying growth companies with strong competitive advantages and holding them for years, often through periods of steep drawdowns. His Tesla investment, which began with a cautious entry at the IPO and ramped up as the company proved its production capabilities, ultimately delivered billions in realized and unrealized gains for his investors. That experience has shaped his willingness to endure volatility in pursuit of long-term growth, even when the market turns against him.
SpaceX: A High-Stakes Growth Play
SpaceX's business fundamentals have shown rapid expansion, but also significant risk. In its second quarter 2026 earnings report, the company posted $7.8 billion in revenue-a 92% increase year over year. The net loss narrowed to $541 million from $1 billion a year earlier, while adjusted EBITDA surged 191% to $3.5 billion. The connectivity segment, anchored by Starlink, saw revenue climb 66% and operating income jump 79%, fueled by a doubling of Starlink subscribers. SpaceX also closed $14.1 billion in contracted cloud services and secured over $6 billion in multi-year U.S. government contracts for its Starshield program. The company ended the quarter with $100 billion in cash, cash equivalents, and marketable securities, and reported a $47.5 billion backlog.
SpaceX's $60 billion acquisition of Cursor, an AI coding platform with 2.5 million developers, signals a strategic push into artificial intelligence infrastructure. The company invested $18.4 billion in capital expenditures during the quarter, with $15.8 billion directed toward AI. For Baron, the appeal is not just in rockets or satellite launches, but in SpaceX's potential to become a dominant player in AI infrastructure, with a profitable and fast-growing satellite internet business as a foundation.
Valuation Risks and Market Skepticism
Despite these growth metrics, Baron's SpaceX position is currently underwater by roughly $34 per share. The stock's valuation has drawn criticism from some analysts and short sellers, who point to a price-to-sales ratio near 50-well above typical levels for even high-growth tech companies. Morningstar, for example, estimates SpaceX's fair value at $63 per share, less than half its recent trading price. The stock debuted at $135, soared to $225.64, then fell more than 50% before stabilizing near current levels. With $18.4 billion in quarterly capital expenditures, multiple rounds of insider share unlocks scheduled through January 2027, and a massive acquisition yet to prove its worth, the risks are substantial.
Baron's investment philosophy is to look beyond near-term volatility and focus on what a company could become over a five- to ten-year horizon. He is betting that SpaceX's Starlink and AI businesses will justify today's lofty valuation by 2030 or later. This approach requires patience and a willingness to accept significant short-term losses-traits that have defined Baron's career, but that may not suit every investor.
Portfolio Context and Historical Parallels
SpaceX now accounts for nearly five times the weight of Baron's second-largest holding, Tesla, which makes up 7.9% of his portfolio. Other top positions include MSCI, Arch Capital, and Hyatt Hotels, each representing less than 3%. The scale of the SpaceX bet is unprecedented for Baron Capital, underscoring his conviction in the company's long-term prospects. This kind of concentrated, high-conviction investing is not unique to Baron. Other prominent investors, such as Bill Ackman, have also made bold moves after enduring major losses, as seen when Ackman rebuilt his Netflix stake after a $400 million setback-a move chronicled in this analysis of Ackman's Netflix strategy.
Baron projects that SpaceX could reach a $40 trillion valuation within 10 to 15 years, starting from its $2 trillion IPO market cap. While such forecasts are speculative, they reflect the kind of long-term thinking that has defined his investment style. For investors considering similar bets, it's crucial to weigh the potential for transformative growth against the reality of steep volatility and the risk that even visionary companies may not deliver on their most ambitious promises.
For the second quarter of 2026, SpaceX reported $7.8 billion in revenue, a 92% year-over-year increase, and an adjusted EBITDA of $3.5 billion, up 191% from the prior year. The company's net loss narrowed to $541 million, and it ended the quarter with $100 billion in cash and marketable securities, according to its official earnings release.
Investing in high-growth companies like SpaceX involves a unique set of risks and rewards. Unlike diversified index funds or established blue-chip stocks, concentrated bets on emerging technology firms can lead to outsized gains-or steep losses-depending on how the underlying business evolves. Investors should consider their own risk tolerance, time horizon, and need for liquidity before allocating significant capital to such positions. While patience and conviction have paid off for some, they are no substitute for a clear-eyed assessment of valuation, competition, and execution risk in a rapidly changing market.
