Key Takeaways:
Deutsche Bank maintained its Buy rating and $255 price target on SpaceX, saying the market assigns near-zero value to the company's AI business ahead of its first post-IPO earnings.
"The market is effectively pricing SpaceX's AI business at zero, which we view as overly punitive," the bank's analysts wrote in a note released before the Aug. 4 report. A sum-of-the-parts stress test values the space and connectivity businesses at roughly $1.35 trillion, nearly matching the company's current market capitalization of about $1.4 trillion.
Deutsche Bank expects second-quarter revenue of $6.67 billion, up 64 percent from a year earlier, with gross margin near 58 percent and adjusted EBITDA above $2.1 billion. AI revenue is forecast to more than double sequentially to $1.88 billion, helped by a new cloud-services agreement with Anthropic, while broadband subscribers are seen reaching 12.5 million at quarter-end with average revenue per user of $63. Capital expenditure is projected at about $17 billion, driving a free-cash-flow burn above $10 billion.
Shares closed at $115 on Aug. 3, roughly 50 percent below the 52-week high of $201.80 set after the June listing at $135. The stock faces its first lock-up expiration on Aug. 6, when as many as 912 million shares become eligible for sale, followed by about 300 million more every 15 to 20 days through the third-quarter report. Short interest stood at 219 million shares as of July 29, according to S3 Partners.
The bank said the lock-up is the main tactical drag on the stock, and that prices could stabilize once the overhang clears. A large government or sovereign AI partnership announced after the unlock would provide a positive catalyst, it added.
JPMorgan initiated coverage with an Overweight rating and $225 target, projecting revenue to grow at a 91 percent compound annual rate from $19 billion in 2025 to $470 billion by 2030. Morgan Stanley holds a $300 target, with enterprise AI contributing more than half of its valuation.
The earnings call on Aug. 4 will test whether Starlink's cash flow can keep pace with the funding demands of the space and AI units. Management's guidance on capital spending, subscriber growth, and Starship's launch cadence will determine whether the stock can reclaim its IPO price of $135.
This article is for informational purposes only and does not constitute investment advice.
