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How SpaceX IPO Illuminates Equity Investment Challenges – Baron Capital
Tom Burroughes
11 September 2026
It’s understandable when a blockbuster firm such as SpaceX floats on the stock market and thousands of its staff become millionaires. iIt shows how certain investors appear to focus on the immediate drama. The Baron Capital approach is an example of active management, an approach that industry commentators say is back in favour as markets have turned volatile, weakening the appeal of tracker funds, even if the latter can charge lower fees. To see an opportunity requires an element of patience.
The IPO of Elon Musk’s spacefaring business has undoubtedly been one of the stock market stories of 2026 and it may even have weakened the narrative of companies forsaking public markets for private ones instead. (See related commentary here.)
Beyond the headlines, there’s a long-term investment story at work.
Back in late June, Ron Baron, founder and CEO of his eponymous US-based firm, , said he thought that SpaceX could become the largest and most profitable company on the planet. “Over the following 10 or 15 years, we think SpaceX could achieve a valuation of $10 trillion-plus,” he said.
Stephen Millar, head of Europe business development at Baron Capital, said SpaceX has “definitely highlighted characteristics that we look for in successful investments: competitive advantages in a growth industry and exceptional management.”
A problem is that concentrating on large IPOs can “take a lot of attention away from other exceptional growth stories and investments,” he told WealthBriefing at a recent meeting in London. “There are a number of smaller companies that continue to grow very aggressively and are producing robust profits that are coming through but are being overlooked.”
Analysts at Baron Capital, founded in 1982, typically look for stocks they believe can generate an annualised return of about 15 per cent, which produces approximately a double in value over five years. The firm’s team employs fundamental research to identify and invest in companies with significant growth opportunities, durable competitive advantages, and strong management, at attractive valuations. Baron Capital is a long-only investor in equities.
The firm takes an entirely bottom-up approach to investing.
Millar said macro-economic concerns, which the Baron Capital regards as unpredictable, are in the background, rather than front and centre.
“We estimate that US inflation averages 4 per cent to 5 per cent over the long term,” he said. “To preserve and grow purchasing power in that environment, investors need to own assets that appreciate at a faster rate. That is why we focus on businesses we believe can double in value over five to seven years. This long-term horizon allows us to look beyond short-term macroeconomic factors.”
Different perspectives
Clients fall into three types: pension funds; endowments and sovereign wealth funds; private banks, advisors and family offices; and in the US, retail investors. Millar's focus is on institutional investors and professional intermediaries.
“We have noticed in the last five to six years that the investment focus of short-term retail investors is getting shorter,” Millar said. “By contrast, outside the US, we seek to work with institutional and professional clients who share our long-term investment perspective.”
Time horizons for investors are lengthening because of ageing populations, he said.
Baron Capital aims to give investors that “Alpha kicker” alongside its more Beta-like core portfolios, Millar said. “We want to be in that strategic bucket.”
AI impact
The topic of AI came up in the conversation. Millar said that some share price falls in companies, seen as being hit by AI-induced disruption, create opportunities to invest in resilient companies whose fundamental and long-term competitive advantages remain intact.
A 20-page research note from the firm, The AI Disruption: A Long-Term Opportunity, elaborates on the theme. “We believe the combination of geopolitical uncertainty and early-stage AI apprehension has created an attractive buying opportunity for many companies. In addition, we believe the long-term potential of AI to increase productivity, strengthen businesses, and generate growth has been largely underestimated by investors.”
Baron Capital’s various investment strategies hold firms that include those likely to be boosted by AI themes, or which have clear competitive advantages, including: Airbnb; Amazon; CBRE; Broadcom; CME Group; Cloudflare; Datadog; Digital Realty Trust; Eli Lilly; Equinix; FactSet; FIGS; Guardant; Heico; Interactive Brokers; JLL; Mastercard; Meta; Microsoft; Nvidia; RBC Bearings; Samsung; SpaceX; Spotify; TSMC; Tesla; Charles Schwab; Visa; and Waystar.
Beyond AI, Baron Capital’s investment team also sees opportunities in insurance, healthcare and entertainment, Millar said. He mentioned Vail Resorts, a group operating ski resorts across North America, Europe and Australia.
Share price performance hasn’t yet reflected Vail’s underlying fundamentals, he said.
“The company has continued to deliver and grow its business, but its share price has fallen substantially; it is a company we have invested in for over 25 years,” Millar said.
Millar, who has been at the firm since October 2019, is responsible for developing and carrying out the firm’s growth strategy in the UK and Europe. That audience includes wealth managers and private banking professionals.
Baron Capital is expanding. In July last year, a new office opened in Dubai. In the UK, Baron Capital has partnered with FundRock Distribution to distribute Baron Capital’s products and services in the European Economic Area.