SpaceX(SPCX) stock is back trading near $140, up nearly 5% over the past week, as investors find new reasons to bet on Tesla (TSLA) CEO Elon Musk‘s newest public-market heavyweight.
Also, the latest 13F filings are only adding to the fuel.
AI behemoth Nvidia(NVDA) disclosed 122.76 million SpaceX shares worth nearly $21 billion on June 30, according to 13f.info.
At the same time, Alphabet (GOOG) reported 551.2 million shares valued at nearly $94.2 billion, according to 13f.info. That’s some insane institutional firepower behind a stock that hasn’t left the spotlight since its earth-shattering June debut.
As we look ahead, nearly 320 million restricted shares will become eligible for transfer on August 20.
For context, the last lock-up release on August 6 was much bigger, at 911.5 million shares, yet the feared selling wave never came, as reported by CNN. Instead, SpaceX jumped back above its $135 IPO price.
Nevertheless, Wall Street remains bullish, slapping an average price target of around $227, implying 62% upside according to Seeking Alpha.
Phillip Securities analyst Glenn Thum just took Wall Street’s most bearish stance on SpaceX stock.
Thum kept a Sell rating and a $75 price target, implying 46% downside from the stock’s current price near $140. That’s also near the lower end of Wall Street’s consensus range.
Thum’s call carries a ton of extra weight, as he’s rated a five-star TipRanks analyst, with a tremendous 89% success rate across his ratings.
That’s higher than veteran analysts such as Dan Ives, who has a 58% success rate.
Moreover, of his 106 tracked calls, 94 were profitable, generating an impressive average return of 20.8% per rating.
More SpaceX:
Interestingly, his concerns start with AI.
Musk had suggested AI could potentially become SpaceX’s biggest revenue engine, not merely a side business. I covered that shift in my Aug. 12 story, “Elon Musk just redefined what SpaceX could become.”
Musk told employees: “Probably our AI revenue — not probably, definitely — our AI revenue will exceed all other SpaceX revenue probably in September, like next month.”
SpaceX’s AI revenue skyrocketed 247% year over year in Q2, with nearly $1.6 billion stemming from the initial ramp of cloud-service agreements.
On the surface, that’s the sort of growth investors typically reward with a premium multiple.
However, Thum makes the case that those contracts aren’t strong enough to justify one.
The cloud agreements charge monthly fees and can be exited with just a 90-day notice following the initial ramp.
What’s more important is that a single AI customer generated 19.5% of SpaceX’s Q2 sales, up from less than 10% a year earlier. That has SpaceX carrying an unusually high concentration risk if one major customer slows down spending or walks away.
On top of that, there’s also the cost of chasing that growth.
Reuters reported that SpaceX spent a whopping $18.4 billion on CapEx in Q2, nearly 2.4 times its quarterly sales, and Thum expects that elevated spending to remain near that level over the next two quarters.
Additionally, compute capacity is expected to exceed 2 gigawatts by December, up from 1.4 gigawatts in June.
Put simply, his argument is that SpaceX is spending as if AI demand is permanent before its contracts prove it is.
For the stock to re-rate higher, he argues that those compute deals must be converted into multi-year commitments.
SpaceX stock faces a $75 target despite its recent market rebound.Anna Moneymaker/Getty Images
AI is already reshaping SpaceX’s sales mix
SpaceX’s relatively complex valuation becomes easier to understand when its business segments are pulled apart.
For perspective in Q2, SpaceX generated $7.81 billion in revenue. Connectivity products, spearheaded by Starlink, contributed $4.29 billion, or roughly 55% of sales. On top of that, AI generated $2.56 billion, about 33%, while space products contributed another $962 million.
So clearly, on paper, AI is far more than just an experimental side project for SpaceX.
It is currently the company’s second-largest sales engine, and that gap with connectivity is likely to close out pretty quickly.
Thum feels that even though demand is strong, he feels investors are assigning too much value to sales backed by contracts that can be exited with hardly much notice.
Nevertheless, the scale matters.
SpaceX is targeting over 2 gigawatts of compute capacity by December, up from 1.4 gigawatts in June, while dropping billions to build it.
SpaceX investors are paying years ahead
For SpaceX investors, the debate is pretty much about how much future growth is embedded into the stock.
At $140 per share, SpaceX trades at 373 times forward non-GAAP earnings, compared to just 13.4 times for the sector, according to Seeking Alpha. On a forward GAAP basis, the multiple balloons to roughly 1,891 times.
Those numbers look pretty extreme, as Wall Street is expecting earnings to rise from a remarkably low base.
GuruFocus estimates put GAAP EPS at just $0.008 in 2026, before jumping to $1.66 in 2027, $4.95 in 2028, $7.29 in 2029, and $11.19 by 2030.
If we take today’s $140 share price, it means investors are paying roughly 84 times 2027 earnings, 28 times 2028 earnings, 19 times 2029 earnings, and only around 12.5 times projected 2030 EPS.
That’s a pretty telling piece of information.
SpaceX looks remarkably pricey when compared to near-term profits, but a lot less so if Wall Street’s long-term earnings ramp materializes.
Revenue expectations point to the same story.
According to GuruFocus data, sales are expected to rise from nearly $44.7 billion in 2026 to $103.8 billion in 2027 before surging to about $451.6 billion by 2030.
Essentially, it then becomes more of a duration trade.
Investors are loading on SpaceX today, betting that AI, Starlink, and its space businesses could convert sales growth into bottom-line strength quickly enough to compress that multiple. On the flip side, if AI contracts weaken and CapEx is elevated with meager margins, Thum’s bearish arguments become tougher to miss.
