Key Points

I own Baron Partners Fund, which held pre-IPO SpaceX for many years before its IPO.
Ron Baron thinks SpaceX might reach $30 trillion by 2040.
The chance he sees focuses on Elon Musk's ideas.
10 stocks we prefer over AST SpaceMobile

Ron Baron views Elon Musk as the most significant person he has met. Baron invests heavily in Musk's achievements, with Tesla and the upcoming public SpaceX together forming roughly 40 percent of Baron Partners Fund. As SpaceX prepares for its initial public offering, Ron Baron has said he believes the company could reach a $30 trillion valuation someday. I remain doubtful, and here is why.

Ron Baron places a massive wager

Ron Baron's view of SpaceX rests on his respect for Elon Musk, whom he calls the most important individual he has encountered. This respect began through meetings with the leader of Tesla and SpaceX and grew after Baron put money into Tesla. Baron sees Musk as a forward thinker. At the same time, Baron notes that Musk works with thousands of skilled and driven staff members who make the ideas real.

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Still, Baron's outlook on SpaceX reaching $30 trillion rests mainly on his trust in Musk. That does not mean Baron overlooks the operations. He points to Starlink for space broadband, Grok as an AI tool, and plans for space data centers as major drivers. He stays realistic about the IPO and notes that near-term stock moves after going public are hard to predict. Baron's focus stays on the long term, as it does with every holding.

Too much focus on one person?

I have gained from Ron Baron's Tesla and SpaceX holdings since I own shares in Baron Partners Fund. Yet I sold half my stake in the fund when Tesla reached about 50 percent of the holdings, even before SpaceX joined. That level of concentration in one stock felt too high for me. I have trimmed my position and do not plan further sales now. I am staying invested, though I do not share Baron's full confidence that SpaceX will grow that large.

Elon Musk is highly capable, yet many other sharp minds exist. His bold spending has created early leads, but rivals will close gaps over time. Tesla shows this pattern, as dedicated EV firms and large automakers now compete. Notably, BYD recently passed Tesla as the top EV seller worldwide.

On SpaceX, Jeff Bezos builds his own space efforts. AST SpaceMobile already runs a service like Starlink. Musk holds no permanent edge in technology, and competition will reduce SpaceX advantages.

SpaceX could still offer strong growth

Even so, SpaceX may expand into a major firm with leading roles in its fields. If it misses the $30 trillion mark, it can still become large and vital. That outcome would likely create lasting value. This is why I keep my Baron Partners Fund shares and why quick trades in SpaceX after the IPO may not suit most investors. Baron Capital calls SpaceX a lifetime holding. That view may seem strong, yet the stock works best as a long-term position.

While I see Ron Baron's outlook as quite optimistic, I hold Baron Partners Fund because Ron Baron invests in ways I cannot. As a dividend investor focused on value, I am essentially shifting my growth exposure to Ron Baron. I do not always share his level of optimism, yet it brings useful balance to my holdings. So far, Ron Baron's faith in Elon Musk has paid off for me. That result can continue even if SpaceX falls short of the high target. Reaching only part of the way toward $30 trillion would still deliver solid gains.

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Reuben Gregg Brewer has no position in any of the stocks mentioned. Reuben Gregg Brewer owns Baron Partners Fund. The Motley Fool has positions in and recommends AST SpaceMobile and Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.