By Al Root
A dozen analysts cover SpaceX stock. That will be closer to 50 in a few weeks.
With shares of Elon Musk's rocket and AI company volatile in post-IPO trading, investors will be paying close attention to what Wall Street has to say about valuation.
The latest rating is a bullish call, valuing SpaceX at a cool $2.5 trillion.
Wedbush analyst Dan Ives launched coverage of SpaceX with a Buy rating and a $190 price target on Tuesday evening.
"We view SpaceX as one of the most differentiated assets within the tech market with a strong footprint across its three core markets, with Starlink driving success with connectivity, Starship launches leading to a demand flywheel, and increasing deal flow for its Colossus [AI data centers," he wrote.
Starship is important for reducing the cost of reaching space by 90% compared with the Falcon 9. Lower costs will enable more space applications, such as AI data centers in orbit.
"All of SpaceX's future business runs through Starship, whether it's Starlink's next-generation [satellites], the orbital AI-compute constellation, the Artemis lunar lander, or the cost-and-capacity step the whole forward [valuation] case assumes," added Ives. "The vehicle is the single largest source of value in the franchise as much as its largest risk."
SpaceX isn't fully operational yet. The company has tested Starship 12 times. The 13th test is expected in a few weeks.
Ives' price target is based on a sum-of-the-parts (SOTP) valuation, which values launch, Starlink, and AI separately. He sees space launch worth roughly $66 billion. Starlink, which has more than 10 million subscribers and generates billions in annual profits, is worth about $600 billion. The AI business is the biggest part of his valuation, worth about $1.8 trillion. He expects AI to generate more than $80 billion in sales in 2028. That's before SpaceX will have AI data centers in orbit.
Ives is notable for being a Tesla bull, too. He rates shares Buy and has a Street-high $600 price target. That values Tesla at about $2.7 trillion, based on fully diluted shares outstanding.
Fifty analysts cover Tesla stock, according to FactSet. So far, 12 analysts cover SpaceX, and seven rate the shares Buy. The average analyst price target is about $240.
SpaceX stock was up 1.8% in premarket trading Wednesday at $173.95, while S&P 500 and Dow Jones Industrial Average futures were falling 0.3% and 0.2%, respectively.
Write to Al Root at allen.root@dowjones.com
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