SpaceX remains one of Wall Street’s most contested stocks four months after what the article describes as the largest IPO on record. The company is valued at about $2.2 trillion, and its shares are still 26% below the all-time high of $225 set in June 2026, though they have rebounded sharply from the early-August low of $105.
The valuation split is wide. On traditional fundamentals, some analysts argue the stock is overvalued by 40% to 64%. Bullish analysts, by contrast, are assigning substantial value to SpaceX’s AI business, pushing price targets far above current levels.
Second-quarter results deepened the debate
Peter Cohan wrote that since he discussed SpaceX before its June IPO, the company has reported a mixed second quarter. According to Yahoo Finance, revenue beat expectations and nearly doubled to $7.81 billion, while Starlink users climbed to 12 million.
At the same time, Starlink was described as the company’s only profitable segment, and capital expenditures in the AI division reached $15.8 billion. That combination has left investors split over how to value future returns from the company’s AI push.
Raymond James said the stock could either fall or rise by nearly 3.8x to $800.
Why the bear case says SpaceX is too expensive
Morningstar said SpaceX trades at 79 times sales, putting it among the most expensive publicly listed mega-cap stocks on record. Analyst Nicolas Owens estimated fair value at $62 a share, implying the stock trades at nearly three times intrinsic value.
In his full report, Owens assigned just a 7% probability to what he called a “moonshot” scenario in which SpaceX’s AI business captures 20% of the 2024 AI compute market.
Aswath Damodaran, the New York University professor often referred to as a leading authority on valuation, estimated SpaceX’s equity value at about $1.3 trillion, roughly 44% below its current market capitalization, or around $100 per share.
Damodaran rejected the $26 trillion total addressable market for AI presented in the prospectus, saying it was beyond a reasonable range. He also cautioned that because the stock is largely driven by momentum traders, being right on valuation does not automatically mean the share price will fall.
Why the bull case still runs much higher
According to TipRanks, the average price target on SpaceX is $235, implying the stock is undervalued by about 40%.
Morgan Stanley analyst Adam Jonas projected that SpaceX revenue will reach $319 billion by 2030. He set a $300 base-case target and a $600 bull-case target. Jonas called SpaceX “a potential generational compounder” and attributed more than half of his target to a merger between SpaceX and xAI, with the rest split between launch services and the Starlink connectivity business.
The bull thesis leans heavily on contracted AI revenue. CNBC reported that Anthropic is expected to pay $1.25 billion per month through May 2029, while Google agreed to pay $920 million per month beginning in October 2026.
Reuters also reported that SpaceX secured a $4.16 billion U.S. Space Force contract for Golden Dome tracking satellites, as well as a $2.29 billion network contract.
The article noted that Goldman Sachs, Morgan Stanley, and Bank of America all issued bullish guidance, and that all three banks participated in the SpaceX IPO underwriting.
Why skeptics question the AI story
The short case centers on whether those AI contracts are as solid as they appear. Yahoo Finance reported that if SpaceX fails to deliver the promised computing capacity by the end of September 2026, Google can terminate the contract immediately after a one-month grace period or accept reduced, prorated payments.
As of Oct. 7, the article said there had been no official confirmation that SpaceX had delivered that capacity.
It also listed a set of other concerns. Prospectus disclosures show that Elon Musk controls 85.1% of the voting power, enough to determine shareholder votes. NASA’s inspector general has raised concerns about the progress and safety of the Starship lunar lander. Amazon is building a Starlink rival after receiving a waiver from the Federal Communications Commission. SpaceX also cannot join the S&P 500 before June 2027, and its losses under U.S. GAAP could delay inclusion even longer.
What traders are watching next
The article highlighted several near-term triggers. One is Starship’s 15th test flight, currently scheduled for no earlier than Oct. 19. A successful test would be positive for the stock, while a failure or long delay could weigh on it.
Another is third-quarter earnings, with the release date not yet set. Investors are watching AI revenue, Starlink pricing, and capital spending.
The clearest near-term supply issue is the lockup expiration. CNBC said the first unlock pressured the stock. Two trading days after the next earnings report, as many as 1.3 billion shares could be released, equal to 28% of total locked shares. Because a separate 455.8 million-share conditional unlock was never triggered and rolled forward, another as many as 797.6 million shares may unlock around Dec. 8.
The piece also pointed to short interest and very high beta, saying shifts in AI sentiment and interest rates could move the stock.
The gap between the two valuation anchors
The article argues that the current share price reflects optimism around AI compute revenue. If the Anthropic and Google contracts become durable, high-margin earnings streams, the more aggressive Wall Street targets could be justified, and Morgan Stanley’s $300 target would look reasonable.
If that does not happen, the fundamental valuation range of $62 to $100 a share suggests meaningful downside. That gap, rather than certainty in either direction, is the central point in the debate laid out in the article.
