Wolfe Research initiated coverage of SpaceX with an Outperform rating and placed a $175 price target on the stock as it begins trading on Nasdaq under the ticker SPCX. The IPO was priced at $135 per share, raising $75 billion and assigning the combined rocket, satellite and AI company a market value of $1.77 trillion.
Valuation and growth assumptions - Wolfe’s $175 target implies roughly 30% upside versus the IPO price, based on valuation multiples of 16 times projected 2028 sales and 54 times projected 2028 EBITDA. Analysts Myles Walton and Peter Supino build their case around substantial top-line expansion and margin improvement, forecasting 70% revenue growth and nearly doubling EBITDA margins by 2030.
In explaining the competitive thesis, the analysts argue that a move toward near-zero launch costs would give SpaceX a structural advantage few competitors can replicate. "SpaceX turned a competitive moat into an ocean of opportunity that we don’t see others crossing," they wrote.
Starship - the linchpin - A central assumption in Wolfe’s model is the successful deployment of Starship, SpaceX’s next-generation fully reusable launch system that remains in testing. The firm estimates that if Starship achieves reliable reusability, incremental launch costs could fall from about $14 million per Falcon 9 flight to under $5 million for Starship, with minimum costs approaching $1 million in fuel. Wolfe warns that without Starship, its 2030 and 2035 financial targets would be reduced by roughly 35% and 50%, respectively.
The analysts also tempered expectations around SpaceX’s role on the AI model front: "We don’t expect SpaceX to out-innovate Anthropic or OpenAI on the model side, but we expect SpaceX to build a cost advantage into the compute end game through verticalization and space access; but that will be moot if we are all in an AI bubble," they wrote.
Near-term earnings drivers - Starlink and AI compute - Wolfe models Starlink as the most immediate earnings engine. The Connectivity segment reached a notable milestone in 2024 when EBITDA-less-capex turned positive, according to Wolfe. The firm projects Connectivity EBITDA to exceed $90 billion by 2030, a forecast underpinned by next-generation satellites expanding both broadband and mobile subscriber counts and by a 12-fold increase in Starlink capacity over the period.
On the AI side, Wolfe views the segment as the fastest-growing part of SpaceX’s business. The analysts reference SpaceX’s acquisition of xAI and a pending transaction for the coding platform Cursor as structural moves that support AI ambitions. They also note compute contracts with Anthropic and Google that, in Wolfe’s view, amount to $26.4 billion in annualized revenue commitments.
Strategic positioning and competitive landscape - Wolfe frames SpaceX’s strategy as an attempt to own a full logistics stack - transport, communications and power. Given the company’s current advantages in launch cadence, satellite deployment and integrated infrastructure, the analysts see limited visibility on where credible catch-up competition would emerge.
Risks and caveats - Wolfe’s report delineates clear risks tied to execution. Starship has not yet achieved orbital flight, and the analysts emphasize that Elon Musk’s track record of aggressive timelines suggests investors should be cautious. "Investors should be eyes-wide-open as to the lack of realism in many of the targets," they wrote.
Beyond Starship execution, the analysis implicitly touches funding and operational risks tied to scaling next-generation satellite deployments and fulfilling large AI compute contracts. While Wolfe projects substantial upside, those outcomes depend on several high-certainty operational achievements that remain in progress.
Overall, Wolfe’s initiation provides a bullish baseline predicated on rapid growth in connectivity and AI compute revenue, but it is explicitly conditional on technical milestones and commercialization of Starship reusability.
Full picture - The initiation lays out a clear bullish scenario backed by specific valuation multiples and growth forecasts, while also documenting the material execution risks that could materially alter those projections.