SpaceX dropped to an all-time low of $132.75 on Wednesday, briefly falling below its IPO price of $135 before closing at $135.27.
The company’s stock is down more than 30% from its all-time high of $225.64 and is about 12% lower year to date.
Somehow though Wall Street still has high hopes for SpaceX, 27 of 31 analysts rate SpaceX as a Buy or Strong Buy, with an average price target of $242. Needham actually ended up raising its price target from $200 to $250.
Analysts are deriving their value of SpaceX from its rocket launches, starlink satellite broadband, satellite-to-phone communications, future data centers, and AI-related products. SpaceX plans to conduct its 13th Starship test flight on Thursday night, which has investors excited as well.
It’s absolutely absurd that a company like SpaceX has extremely bullish sentiments when it hasn’t proven anything. The company’s main customer for the future will be the government while it tried its best to buildout starlink. The excitement about data centers in space seems ridiculous as it’s an untested idea as of now and still has a lot of journey ahead.
SpaceX’s AI products seem to give the company some hope, however. Grok is the company’s AI assistant and currently competes with Claude, ChatGPT, and Gemini. No matter if it’s the best product on the market or not, Elon Musk will be able to sell Grok to other companies either through an enterprise license or a software integration. But, this alone cannot save SpaceX from the expectations it placed upon itself.
Wall Street seems to expect SpaceX to perform backflips and doesn’t seem too worried about the state of the company right now. Currently, SpaceX looks like it’ll be a taxpayer leach in the near future, gaining most of its revenues from government contracts, rather than broad-based commercial demand. This might be the key reason Wall Street is so bullish on SpaceX, they have the utmost confidence that Elon will be a government beneficiary.
