Analysts begin coverage before major index inclusion
Shares of Space Exploration Technologies (NASDAQ:SPCX) slipped ahead of the company’s scheduled inclusion in the Nasdaq 100 on Tuesday, as several major Wall Street firms initiated research coverage with price targets ranging from US$190 to US$300.
The wide range of valuations reflects differing opinions over the long-term potential of SpaceX’s artificial intelligence and satellite operations.
The company’s addition to the Nasdaq 100 is expected to drive substantial passive investment flows. Last month, JPMorgan estimated that index-tracking funds could purchase approximately US$4.3 billion worth of SpaceX shares following the inclusion.
Rapid index entry follows blockbuster IPO
SpaceX’s inclusion comes less than a month after its stock market debut on 12 June, making it one of the quickest companies to enter the Nasdaq 100 after listing. The accelerated timeline was made possible by revised Nasdaq eligibility rules for newly listed companies.
Despite the positive catalyst, SpaceX shares were down 2.3% in premarket trading by 04:27 ET (08:27 GMT).
Morgan Stanley sees the greatest upside
Morgan Stanley began coverage with an Overweight rating and the highest target price among the major brokerages at US$300 per share. The bank also outlined an “intentionally wide $75 bear case and $600 bull case.”
Analysts led by Adam Jonas described SpaceX as holding “an ’X of 1’ position in space infrastructure,” arguing that investors are undervaluing the economics of the company’s terrestrial AI data centre operations, where costs are estimated to be roughly half the industry average.
The analysts also highlighted the significant capital requirements needed to support future expansion, estimating that SpaceX may require around US$84 billion of external funding annually between 2027 and 2034 before generating positive free cash flow.
Other brokerages remain constructive
RBC Capital Markets initiated coverage with an Outperform rating and a US$225 target price, valuing the company at roughly 15 times its projected 2029 EBITDA.
The brokerage argued that computing infrastructure represents a lasting competitive advantage, stating that “AI models and applications may come and go, but compute lasts forever.”
RBC identified Starship flight testing, the proposed acquisition of Cursor and deployment of next-generation Starlink V3 satellites as key near-term catalysts.
Stifel also initiated coverage with a Buy rating and a US$190 target, the most conservative among the major firms.
Its investment thesis centres on launch economics, arguing that “lowest cost to orbit wins everything above it.”
The broker highlighted Falcon 9’s reusable launch system for dramatically lowering launch costs, while taking a more cautious stance on SpaceX’s AI ambitions because of the commercial uncertainty surrounding orbital data centres.
UBS highlights long-term growth opportunity
UBS started coverage with a Buy recommendation and a US$210 price target.
The bank estimates that SpaceX’s combined opportunities across launch services, satellite connectivity and artificial intelligence could eventually address a market worth nearly US$30 trillion if Starship achieves its expected performance.
UBS forecasts revenue and EBITDA growth averaging approximately 70% and 90% annually through 2031, while expecting launch costs to decline to around US$200 per kilogram from roughly US$1,000 today.
The bank added that the shares effectively offer investors “a call option” on Elon Musk’s long-term vision of making humanity multiplanetary, although it does not include that outcome within its base-case valuation.
Investors continue to assess post-IPO performance
The new analyst coverage arrives less than a month after SpaceX completed its record-breaking initial public offering.
The company raised approximately US$86 billion after pricing its IPO at US$135 per share on 12 June. Shares closed Monday at US$160.42, remaining comfortably above the IPO price but below the roughly US$225 peak reached shortly after listing.