SpaceX The stock price rose to around $163 on October 21, following the release of record quarterly results by a company owned by Elon Musk, and JPMorgan Chase also doubled its target price for this aerospace and artificial intelligence giant.
SPCX traded around $162 to $163 during the Wednesday session, which is about 10% higher than the closing price of $147.79 on Tuesday. Although some early market comments suggested a gain of over 15%, the confirmed stock price of $163 indicates a rise of approximately 10.3%.
JPMorgan analyst Doug Anmuth has raised the 12-month target price for SpaceX from $240 to $500 and maintained a 'overweight' rating, citing financial reports that indicate the company's AI infrastructure business is growing rapidly.
JPMorgan raised its target price of SpaceX to $500 after earnings exceeded expectations
JPMorgan Chase's rating upgrade comes shortly after the release of SpaceX's third-quarter financial results. The financial report shows that the company's revenue increased by 161% year-on-year to $14.6 billion.
Net profit reached $4.4 billion, reversing the loss of $1.1 billion from the same period last year. After adjustment, EBITDA increased by 306% to $8.8 billion.
Anmuth Currently, it is estimated that SpaceX will have revenue of about $254 billion in 2027, and this forecast is based on a significant expansion in artificial intelligence computing power.
It is estimated that by the end of 2027, the annual revenue of SpaceX could approach $400 billion, but it would still be lower than the more aggressive target range of $500 billion to $1 trillion set by management.
SpaceX AI Revenue soars by 830%, with continuous expansion of computing power
The Super Intelligence department of SpaceX reported revenue of approximately $7.56 billion in the third quarter, representing a year-on-year increase of about 830%.
The revenue generated by this business has now exceeded Starlink, marking a significant shift for the company from rocket and satellite communication-related businesses to artificial intelligence services.
This change also confirms Morgan Stanley's previous view that investors have underestimated the continuously expanding artificial intelligence business of SpaceX.
As of the end of September, the company's computing power reached approximately 1.7 gigawatts. JPMorgan Chase estimates that this figure will increase to 2 to 3 gigawatts by the end of the year and will further expand significantly in 2027.
However, this kind of growth requires huge investments.
SpaceX Capital expenditure in the third quarter was approximately $19.6 billion, while management expects to spend another $35 to $40 billion in the fourth quarter.
This also raises the issues previously mentioned in the Coinpaper reports on the financing of AI, including borrowing costs, as well as the risks of expanding infrastructure before future revenues have been realized.
SpaceX Can the stock price reach JPMorgan Chase's target of $500?
Rising from $163 to $500 represents approximately 207% upside potential, however, JPMorgan's forecast does not equate to a guaranteed realization.
The estimation for this line requires the company to successfully build more computing infrastructure, maintain customer needs, and be able to finance expansion without excessively increasing financial risks.
The company also faces the uncertainty of a potential merger with Tesla. Musk confirmed that an independent committee has been established by both companies to study the possibility of a merger, but no agreement has been reached yet.
Previous merger discussions highlighted potential synergies, but they also brought about complex issues in terms of regulation and corporate governance.
