It Took Warren Buffett Nearly 6 Decades to Build Berkshire Hathaway Into a $1 Trillion Stock. This Company Is About to Do It in One Fell Swoop | The Motley Fool

These days, companies have seen their market caps explode on incredible hype. Warren Buffett is arguably known as the greatest investor of all time. Berkshire Hathaway is one of the largest conglomerates in the world. But it didn't happen overnight. It took Buffett and his team roughly six decades for Berkshire to hit a $1 trillion market cap, placing it among an elite and small group of companies that can boast such an accomplishment. These days, the biggest companies seem to compound value much more quickly. In fact, there is one company poised to surpass a $1 trillion market cap shortly after its IPO. Berkshire is unique because it's the only non-technology, non-artificial intelligence company to reach a $1 trillion market cap thus far. Berkshire more or less did it the old-fashioned way. Buffett bought and constructed wonderful businesses at fair prices that generate strong cash flows and earnings. Berkshire also used the float it generated from insurance premiums to build a $300 billion-plus stock portfolio, but it was all truly done with the power of time and compounding. Berkshire also earned its $1 trillion market cap on pure fundamentals, and the valuation is quite easy to understand. Wall Street analysts expect Berkshire to earn $20.63 in earnings per class B share this year. Berkshire class B shares trade at about $481.50, valuing the stock at about 23 times forward earnings. The valuation is fairly reasonable, considering the company's earnings power and track record. But these days, high-growth stocks with immense potential in game-changing new sectors can quickly reach meteoric multiples, helping them quickly eclipse the $1 trillion market cap. One company projected to do this is SpaceX, which is expected to conduct an initial public offering within the next few months. SpaceX is widely expected to be the largest IPO of all time. Various reports have suggested the company could raise $50 billion to $75 billion at a valuation of $1.75 trillion to $2 trillion. The company is quite unique in that it uses reusable rockets to help launch astronauts into space, and it has also set up a low-orbit satellite network called Starlink that can provide high-speed internet anywhere on the planet, even in areas without traditional cable infrastructure. Reuters reported earlier this year that SpaceX generated about $8 billion in profit on about $16 billion in revenue in 2025. At a $1.75 trillion market cap, that would value SpaceX at close to 219 times trailing earnings and over 109 times trailing revenue. What investors are saying here is that they see so much potential runway for SpaceX, they are going to shoot now and ask questions later. SpaceX is clearly one of the most innovative companies in the world. Aside from its participation in commercial launches and Starlink, which reportedly has over 9 million users already, SpaceX has the potential to be something much more, which investors might be missing, according to Gene Munster, a managing partner at the hedge fund Deepwater Asset Management. In a recent article posted on X, Munster said SpaceX has the potential to be the world's first sovereign artificial intelligence, which he described as a company that owns the entire AI stack from the chips to data centers to the actual models that provide the intelligence. SpaceX's stack includes not only its ability to reuse rockets, which provides a cost advantage and the potential to build data centers in space one day, but also the Starlink network and intelligence provider Grok, which is now part of the company. Munster argues that this means SpaceX will one day no longer need to rely on third-party cloud providers, rented silicon for chips, or borrowed infrastructure. Being able to own and operate the whole AI stack would be quite a compelling proposition. I also suspect that investors look at SpaceX similarly to Tesla, the electric vehicle company Musk became chairman of two decades ago. While Tesla focused on electric vehicles for many years, the company is now focused on robotaxis and humanoid robots. All that said, retail investors will pay a heavy premium to acquire SpaceX stock. That's why I see no need to rush into the IPO. In my opinion, there will be plenty of time to buy the stock at more affordable prices. Investors should wait until after the IPO, when lock-up provisions expire, and more information about the company becomes public, before deciding whether to purchase the stock.