JPMorgan Doubling SpaceX Price Target to $500
SpaceX shares surged 10% on Wednesday following the company’s second earnings report as a public company, prompting JPMorgan to double its price target to $500 from $240. Analyst Doug Anmuth cited a massive $28T+ total addressable market as the driving force behind the bullish valuation. The company posted adjusted earnings of 45 cents per share on $14.6 billion in revenue for the quarter ending September 30, according to LSEG data. CEO Elon Musk projected annual recurring revenue to reach between $500 billion and $1 trillion by the end of 2027.
AI Integration Outpacing Legacy Rocket Operations
Artificial intelligence has quickly transformed SpaceX into its largest business segment by revenue. The vertical integration spans from chips to data centers and the Grok generative AI tool. SpaceX plans to finish the year with two to three gigawatts of computing power, scaling up to roughly 13 gigawatts by 2027. JPMorgan estimates that nearly all of the 10 gigawatts of incremental compute added in 2027 will rely on Nvidia Vera Rubin chips, commanding significantly higher monetization.
Evaluating the Multi-Trillion-Dollar Addressable Market
JPMorgan’s bull thesis rests on SpaceX expanding far beyond rockets and satellites into telecommunications, artificial intelligence, and potential robotics markets. Doug Anmuth wrote in a post-earnings note that no other company sits in a better position to capture the combined addressable market. The aggressive expansion puts SpaceX in direct competition with legacy telecom carriers such as AT&T, Verizon, and T-Mobile. Special committees on the boards of SpaceX and Tesla are exploring a potential tie-up between the two companies.
What Are the Latest SpaceX Financial Results?
What were SpaceX’s financial results for the third quarter?
SpaceX posted adjusted earnings of 45 cents per share on $14.6 billion in revenue for the quarter ending September 30, outperforming consensus estimates compiled by LSEG.
How much compute power does SpaceX expect to deploy by 2027?
JPMorgan notes that SpaceX expects to increase its computing capacity to roughly 13 gigawatts by 2027, up from two to three gigawatts at the close of the current year.
What is the timeline for Elon Musk’s revenue projections?
Elon Musk stated during the company’s earnings call that he projects annual recurring revenue to land between $500 billion and $1 trillion by the end of 2027.
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