Key Takeaways:
JPMorgan raised its SpaceX price target to $240 from $225, implying 87% upside from Friday's close of $128.50.
"SpaceX's first quarterly earnings as a public company were a strong debut," Doug Anmuth, analyst at JPMorgan, said in a note.
The bank cited SpaceX's updated guidance for $100 billion annual recurring revenue by December and $1 trillion in revenue by 2030, a year earlier than expected. JPMorgan also lifted its compute estimate to 5-10 GW in 2027, above its prior 4.2 GW forecast.
The target implies 87% upside from Friday's close. SpaceX shares have surged over 18% this week, defying the 911.5 million share unlock that more than doubled the public float to 11.8% of shares outstanding from 4.9%.
Anmuth argued the company benefits from extreme vertical integration and the rapid pace of AI innovation. He highlighted SpaceX's new expectations of increasing compute to 5-10 GW in 2027, "well above" JPMorgan's previous estimate of 4.2 GW, and pointed to existing deals with Anthropic, Google and Reflection AI plus a new unnamed customer representing an additional $6.7 billion in cloud services revenue over six months beginning in October.
"The step-up in compute capacity plus higher monetization suggests that SPCX could pull forward previously modeled AI revenue for 2028 of $100 billion-plus to 2027," Anmuth said. The higher target is based on a multiple of 34 times 2028 estimated earnings per share of $7.02.
The stock's weekly gain came despite a turbulent stretch. SpaceX fell 13.6% to $108.27 on Wednesday, a new all-time closing low, after second-quarter results showed AI capital expenditures ballooning to $15.8 billion from $7.7 billion in the prior quarter. The stock then rose 6.1% on Thursday as the first and largest of nine staggered lock-up tranches expired. Morningstar analyst Nicolas Owens said the market had already braced for the dilution, arguing "a good deal of the recent slump in SpaceX stock is precisely in anticipation of the lockup."
Wall Street remains broadly bullish. The 31 analysts surveyed by TipRanks set an average 12-month target of $229.54, implying 76% upside, with the highest at $800 and the lowest at $75. SpaceX's market capitalization stood at roughly $1.5 trillion at the time of publication.
The price target raise reinforces bullish sentiment on SpaceX as the company works through eight remaining lock-up tranches over the coming months. Investors will watch whether the stock can hold its gains as additional supply enters the market and whether the mystery cloud customer is confirmed.
This article is for informational purposes only and does not constitute investment advice.
