HSBC has started coverage of SpaceX with a Hold rating and a $115 price target, saying the private company’s dominant role in commercial launch services and the growing Starlink satellite network form a credible base for long-term growth. Yet the bank cautioned that SpaceX’s broader ambitions - notably in artificial intelligence and plans for deeper vertical integration - face considerable technological and execution risks.
In its note, HSBC described SpaceX’s integrated approach - linking launch capabilities, Starlink connectivity and AI development - as potentially creating a reinforcing commercial cycle over time. The brokerage added, however, that market participants appear to be assigning value today to several technologies that remain unproven. Those technologies include orbital data centres, on-orbit AI compute infrastructure and semiconductor manufacturing via the company’s Terafab initiative.
HSBC acknowledged SpaceX’s strength in two core areas. The bank said the company effectively dominates commercial launch services and that Starlink has established a leading position in satellite internet. But it drew a distinction between those edges and SpaceX’s AI-related goals, arguing the latter confront much tougher competition.
The brokerage judged that xAI - SpaceX’s AI venture - lags leading AI developers when it comes to enterprise adoption and available compute scale. HSBC said competing with established hyperscalers would require substantial capital expenditure. The note also raised doubts about whether orbital data centres will become economically viable within the next decade and suggested Starlink’s addressable market is likely considerably smaller than SpaceX’s own estimates.
On the financial outlook, HSBC projected revenue would more than double to $38.2 billion in 2026 from $18.7 billion in 2025, a jump the bank attributed principally to AI-related businesses and expansion of Starlink operations. Despite that projected top-line growth, HSBC expects SpaceX to remain loss-making on a GAAP basis through 2027 as heavy investment suppresses earnings. The brokerage further estimated that free cash flow will not turn positive until 2030 after roughly $106 billion of cumulative cash usage.
Valuation analysis in the report employed a sum-of-the-parts framework and included a 2x "innovation premium," reflecting HSBC’s view that markets have historically valued Elon Musk-led enterprises above traditional fundamentals. Using that approach, the bank estimated a "blue-sky" valuation of $293 per share under a scenario that assumes successful Starship commercialization, faster Starlink adoption and more rapid AI monetization.
HSBC also highlighted governance and reporting considerations. The bank noted Elon Musk would retain effective control through his voting rights and advised investors to watch upcoming share lock-up expirations, which could materially increase the public float after forthcoming earnings releases. The brokerage concluded that while SpaceX has firm foundations in launch and satellite connectivity, its broader ambitions are exposed to technological uncertainty, heavy spending requirements and execution risk.
Summary
HSBC initiated coverage of SpaceX with a Hold rating and a $115 price target, noting strong positions in commercial launch and Starlink but warning that AI ambitions and projects like orbital data centres and Terafab face major execution and viability questions. The bank forecasts accelerating revenue through 2026 but expects GAAP losses through 2027 and negative free cash flow until 2030 after substantial cumulative cash use.