Key Takeaways:
SpaceX (NASDAQ:SPCX) rose 11% to $127.49 in midday trading Friday after Argus upgraded the stock to Buy from Hold with a $160 price target, leading a sector-wide rally in space stocks. The upgrade cited "encouraging early payback" on SpaceX's heavy AI-infrastructure spending, pointing to rapid growth in computing capacity as justification for the more constructive stance.
The note gives fundamental cover to buyers who had been sidelined by dilution fears after Thursday's post-IPO share-lockup expiration, which unlocked 911.5 million shares and more than doubled the public float. SpaceX stock had traded as low as $114.56 earlier in the session before turning higher, with intraday volume topping 107 million shares.
Intuitive Machines (NASDAQ:LUNR) gained 9% to $16.25, Rocket Lab (NASDAQ:RKLB) jumped 8% to $81.56, and AST SpaceMobile (NASDAQ:ASTS) rose 5% to $70.68. Virgin Galactic (NYSE:SPCE) gained 6% to $3.12, while Planet Labs (NYSE:PL) advanced 5% to $23.86.
The sector's advance also rode a supportive macro tape after the July jobs report showed the U.S. economy lost 23,000 jobs versus expectations of roughly an 80,000 gain, with unemployment at 4.1%. The soft print reduced expectations for a September Federal Reserve interest-rate hike, boosting appetite for capital-intensive growth names. The S&P 500 rose 0.31% to 7,633.20, while the Nasdaq 100 gained 0.99% to 29,106.20. The Invesco QQQ Trust (NASDAQ:QQQ) was up 1.12%.
Rocket Lab was the only space peer with its own company-specific event beyond SpaceX. The company completed its 92nd Electron mission, its eighth launch for the iQPS Earth-imaging constellation, and the stock is up 72% over the past year. Intuitive Machines, AST SpaceMobile, Virgin Galactic, and Planet Labs had no major fresh company-specific news, with their gains reflecting sector momentum rather than individual events.
Bull case rests on AI compute monetization
The bull case for SpaceX rests on the Argus thesis: monetization of AI compute capacity is scaling faster than the market feared. SpaceX reported second-quarter revenue of $7.8 billion and EBITDA of $3.5 billion, beating consensus estimates of $6.8 billion and $2.1 billion. Following the earnings release, consensus estimates for 2027 revenue rose to about $102 billion from roughly $72 billion at the end of July, according to FactSet. Bernstein SocGen Group raised its price target to $248 from $239, citing improved pricing expectations for the company's AI computing business.
The bear case is straightforward: capital intensity is enormous, with founder Elon Musk outlining plans to build toward roughly 15 to 20 gigawatts of AI power and computing capacity and to begin launching orbital data centers next year. The stock is down 15% over the past month, and the newly unlocked float could still be distributed into strength.
For diversified exposure, the Procure Space ETF (NASDAQ:UFO) rose 2% to $47.65. The fund is concentrated and volatile, with Planet Labs at 6.16% of net assets and Rocket Lab, Intuitive Machines, and AST SpaceMobile together accounting for another meaningful slice.
Investors should watch whether SpaceX stock holds above $125 into the close. Follow-on analyst notes and any update on the orbital data center rollout could shape the next share-price moves for the sector. If additional analysts validate the AI-infrastructure payback thesis, SpaceX could sustain today's breakout and pull peers along with it.
This article is for informational purposes only and does not constitute investment advice.
