Vy Capital, a secretive company with just four employees in its investment committee, has become a big investor in SpaceX (NASDAQ:SPCX), the $2 trillion space and artificial intelligence company.
Vy Capital is the Fourth-Largest SpaceX Investor
The most recent disclosures show that the company has accumulated a stake worth over $41.1 billion. This figure makes it the fourth-largest holder of the shares after Alphabet (NASDAQ:GOOG), Valor Management, and FMR.
Other top holders of SpaceX shares are companies like Gigafund Management, Saudi Arabia’s Public Investment Fund, BAMCO, D1 Capital, and Nvidia (NASDAQ:NVDA). Nvidia holds shares worth over $18.5 billion. BAMCO is a subsidiary of Baron Capital, which is owned by Ron Baron, a top Elon Musk backer.
According to the FT, Vy Capital has become one of the top beneficiaries of the recent SpaceX IPO that has pushed its market capitalization to over $2 trillion. It invested in SpaceX in 2016 at a $15 billion valuation and eventually built a 3.4% stake in the company.
In addition to its stake in SpaceX, the company has become the biggest outside investor in BoringCo and Neuralink. Neuralink, the brain implant company, has attracted a $42 billion valuation, while Boring Company recently raised funds from the UAE at a $23 billion valuation.
SpaceX Growth is Accelerating, But Costs Remain a Challenge
The most recent results showed that SpaceX’s business continues its strong growth, helped by its Starlink segment. Starlink’s revenue accounts for 53% of its total figure, and the company is seeking to boost its growth.
Its second-quarter revenue jumped to $7.8 billion, with its adjusted EBITDA rising to $3.53 billion. Benzinga data shows that analysts predict that its annual revenue will jump to over $44 billion, followed by over $100 billion next year. Morgan Stanley predicts that its revenue will hit $3.5 trillion by 2033.
Part of this growth is coming from its AI data center business, which landed a mystery client who will start paying it $1.1 billion a month starting in December. Other companies using its AI data centers are Google, Reflection AI, and Anthropic.
The challenge, however, is that the company is still burning substantial sums of money. Its AI business had a capital expenditure of $15.8 billion in the second quarter, while its space and connectivity spent $1.17 billion and $1.3 billion.
Analysts are largely bullish of the SpaceX stock, which will benefit Vy Capital and other portfolio companies. William Blair recently reiterated its outperform rating, while Pivotal Research initiated coverage of the company with a buy rating and a target of $220.
Oppenheimer’s Timothy Horan hiked his target from $250 to $280, while Bernstein, Morgan Stanley, and Wolfe Research having an outperform rating. The average target among analysts is $221, up by 46% from the current level.
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