Key facts
- SpaceX reported first earnings as a listed company, with revenue of $7.8 billion exceeding estimates.
- The company's AI-related capital spending reached $15.8 billion in the quarter.
- Piper Sandler cut its price target for SpaceX stock to $140 from $156, maintaining a 'Neutral' rating.
- SpaceX stock fell over 11% in pre-market trading, trading below its IPO price.
- Other analysts, including BoFA and JPMorgan, maintain bullish ratings and higher price targets.
SpaceX's stock experienced a significant decline of over 11% in pre-market trading, despite the company reporting its first-ever earnings results that surpassed Wall Street's revenue expectations. The company announced quarterly revenue of $7.8 billion, a 92% increase year-over-year, exceeding the estimated $6.82 billion.
However, investor sentiment shifted from the strong top-line growth to concerns over SpaceX's aggressive investment strategy, particularly its substantial spending on Artificial Intelligence (AI). Total expenditures surged to $18.3 billion, with $15.8 billion specifically allocated to AI-related investments, including data center expansion and the purchase of advanced Nvidia chips.
Piper Sandler, a renowned analyst firm, reduced its price target for SpaceX stock to $140 from $156, while maintaining a 'Neutral' rating. The firm cited potential selling pressure from a projected 140% increase in tradable shares and higher-than-anticipated fiscal 2027 capital expenditures of around $65 billion as near-term challenges.
Despite these concerns, not all analysts share a bearish outlook. Bank of America (BoFA) reaffirmed its 'buy' rating with a price target of $235, and JPMorgan raised its price target to $240 from $225. Mizuho also reiterated a 'buy' rating and a $200 price target, suggesting a generally bullish long-term view among many analysts.