Wall Street had a simple question heading into SpaceX‘s first earnings report as a public company. Was the spending worth it?
The answer came in the form of a single number that landed on Aug. 4 and immediately changed the tone of every conversation about the stock.
The stock had been trading near $125 before the report dropped. By the time analysts finished reading through the capital expenditure line, it was heading toward $110.
JPMorgan’s Doug Anmuth published his response the next morning.
JPMorgan raises SpaceX price target to $240, despite capex shock
Capital expenditures for Q2 came in at $18.4 billion, with $15.83 billion going specifically to AI infrastructure.
Analysts had modeled roughly $13 billion in total capex. Management said Q3 and Q4 could each run at similar levels, implying full-year spending of around $65 billion against a Wall Street consensus of $50 billion.
That’s what sent the stock down. Anmuth raised his target anyway.
Anmuth lifted his price target to $240 from $225 and kept an Overweight rating, according to 24/7 Wall St. With SpaceX trading near $117 after the sell-off, the new target implies more than 100% upside.
His thesis rests on these words: extreme vertical integration. Anmuth’s note cited SpaceX’s (SPCX) ability to own the launch, satellite, and computing layers of its business as the key competitive advantage that justifies staying constructive even as spending runs far above expectations.
He also flagged that SpaceX’s AI revenue could reach $100 billion by 2027 if infrastructure monetization keeps pace, arriving earlier than the bank had previously modeled.
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The broader Q2 numbers were better than the stock reaction suggested. Revenue came in at $7.81 billion, up 92% year over year, beating the $6.93 billion consensus. Net losses narrowed to $541 million from $1.01 billion a year ago.
SpaceX signed $14.1 billion in new cloud services contracts during the quarter. The company holds roughly $100 billion in cash and marketable securities. Starlink was the only segment to post an operating profit at $1.66 billion, while the AI segment posted an operating loss of $1.26 billion, despite the revenue surge, according to CNBC.
The AI segment already reached adjusted EBITDA profitability ahead of schedule in Q2. AI revenue jumped 247% year over year to $2.56 billion. CFO Bret Johnsen said SpaceX is seeing “less than a one-year payback” on some AI compute investments, a figure that helps justify the continued spending, even as it creates near-term pressure on free cash flow.
Wells Fargo, Piper Sandler, BofA weigh in on SpaceX stock after Q2
JPMorgan wasn’t the only firm moving its target. Bank of America analyst Ronald Epstein reiterated a Buy rating and a $235 price target, saying the firm is “more positive” on SpaceX’s positioning across its key markets after Q2.
Epstein acknowledged elevated capex expectations and lingering questions about AI and Starlink Mobile monetization, but kept the Buy rating in place.
William Blair analyst Louis DiPalma reiterated an Outperform rating. Mizuho reiterated its Buy rating and $200 price target. UBS initiated coverage with a Buy rating.
Not all firms moved in the same direction. Wells Fargo cut its target to $215 from $230 over concerns about the pace of AI spending. Piper Sandler went further, lowering its target to $140 from $156 while maintaining a Neutral rating, citing valuation concerns, the massive lockup expiration, higher projected 2027 capex, and uncertainty around long-term AI cloud demand, according to Finbold.
Across 31 analysts covering the stock, the average 12-month price target is $233.71, about 86% above where SpaceX was trading after the sell-off. Twenty-three of those analysts say buy. Six say hold. Two say sell.
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The SpaceX lockup expiration that’s adding pressure to the stock
The earnings sell-off wasn’t the only pressure point. On Aug. 6, SpaceX’s post-IPO lockup ended, freeing 911.5 million shares held by employees and early investors. That’s about 43% more shares than were issued at the IPO and effectively more than doubles the public float, from 4.9% to 11.8% of shares outstanding. The freed shares were worth roughly $101 billion at recent prices.
This is the first stage of a nine-stage lockup schedule. Analysts warn that selling pressure could persist through December as subsequent tranches become available. A second earnings-linked unlock could free up to 1.3 billion additional shares, depending on how the stock performs, according to Yahoo Finance.
SpaceX priced its IPO at $135 on June 12, raised $85.7 billion, and watched the stock run to $225 in its first week of trading before it pulled back, as TheStreet reported. The lockup expiration adds a structural headwind on top of the capex concern that already drove the post-earnings slide.
What SpaceX needs to prove to justify JPMorgan’s $240 target
Starlink now serves 12 million subscribers across more than 160 markets. Launch operations have recorded more than 670 orbital launches with a 99%+ success rate and handle more than 80% of all mass to orbit since 2023. Those are real businesses generating real revenue.
JPMorgan’s bull case is that the AI layer gets added on top of them, creating a company that is simultaneously a launch provider, satellite internet operator, and alternative cloud player renting Nvidia-powered compute capacity to companies like Google and Anthropic.
XTB analyst Kathleen Brooks said the core worry on the street is spending growth outrunning revenue growth. JPMorgan is projecting capex of nearly $200 billion in both 2027 and 2028, which further pressures free cash flow and extends the timeline to meaningful profitability.
Musk moved his $1 trillion annual revenue target up to 2030 from 2031, but targets and execution are two different things.
Anmuth’s $240 target is a bet that the vertical integration thesis holds, that AI revenue keeps scaling faster than expected, and that the lockup pressure resolves without permanent damage to the stock.
All three of those things have to happen for the target to make sense. The Q2 report said the spending will definitely continue. Whether the returns follow is what the next several quarters will answer.
Related: SpaceX stock sends investors a signal they need to see
