Wall Street’s Optimism for SpaceX Amid Fluctuating Stock Performance
On Tuesday, Wall Street displayed strong optimism for Elon Musk’s SpaceX, particularly after the initiation of stock research coverage. Interestingly, this enthusiasm appears to be driven more by excitement around AI than by tangible earnings.
Several major brokerage firms, including Morgan Stanley, JPMorgan, and Goldman Sachs, offered clear “buy” ratings for the stock. According to data from Bloomberg, the average expected increase in value is 47% from Monday’s closing price of $160.42.
Many of these prominent banks acquired SpaceX shares at $135 each during the historic IPO last month, and they now anticipate a rise to an average of $236.
This bullish sentiment contrasts sharply with the usual silence surrounding newly listed firms after they go public.
Notably, Raymond James has emerged as the most optimistic, setting a price target of $800—almost 500% higher than the IPO price.
In a note released Tuesday, analyst Brian Jeshuare from Raymond James expressed, “We believe SpaceX is building the foundational platform for the next generation of industrial capabilities, similar to how railroads, power grids, and the internet transformed past economic eras.”
Meanwhile, analysts at Deutsche Bank remarked that SpaceX embodies “the culmination of a civilizational ambition, often expressed in iron and fire, that bends the arc of history.”
Bank of America analysts likewise suggested that SpaceX, which owns satellite giant Starlink, is “paving a superhighway to the stars.”
However, despite the overall optimism, SpaceX stock saw a 6.8% decline on Tuesday, mirroring the downward trend in other tech and chip stocks. It’s about 25% lower than its June 16 closing price of $201.80, fueling concerns about a potential “AI bubble.”
Last year, the company faced a loss of nearly $5 billion, and it’s evident that its significant AI investments are affecting profits. Nonetheless, analysts generally believe SpaceX will emerge successfully in the long term due to these investments.
Looking back, Musk’s Tesla faced a lengthy path to profitability. While the market wasn’t very receptive back in 2010, analysts are hopeful that SpaceX’s swift ascent into the Nasdaq 100 on Tuesday will lead to greater stability.
Bloomberg reported that the average price target for the top 10 stocks on the Nasdaq 100 suggests an upside of 28%, with Nvidia significantly ahead at 55%.
Rob Du Bouff from Bloomberg Intelligence estimates that if SpaceX ranks on the Nasdaq 100 and FTSE Russell, it could attract over $5.4 billion in purchases from index-tracking funds.
Morgan Stanley also remains a strong advocate for SpaceX, forecasting the stock will climb to $300 per share as demand for its AI services expands.
As noted by Morgan Stanley analysts, “While neo-cloud transactions will constitute the bulk of the business in the short term, we see end-to-end AI services as the long-term business model.”
Interestingly, Bloomberg data reveals that 63% of analysts among the 3,000 largest U.S. companies rate SpaceX as a “buy,” whereas only 4.2% suggest it as a “sell.”
Yet, caution is advised, as some analysts warn that even if SpaceX ultimately yields significant returns on investment, much of that value may already be reflected in the stock price.
Before SpaceX’s IPO, which set the company’s valuation at $135 per share, Morningstar’s Nicholas Owens assessed the stock value at just $63, labeling it “overvalued.”
