SpaceX shares surge as analysts double price targets on explosive Q3 results
A record-breaking quarter and aggressive AI expansion plans have led Wall Street to significantly raise its valuation for the aerospace giant.
By Anna Nowak ·
SpaceX shares surged in premarket trading on October 21, rising approximately 8 percent following a significant wave of price target upgrades from Wall Street analysts. The stock, which closed at $147.79 on the previous trading day, reacted strongly to the company’s third-quarter financial results and forward-looking guidance released after the market close on October 20.
The company reported total revenue of $14.6 billion for the quarter, marking a 161 percent year-over-year increase. This figure substantially exceeded the consensus estimate of approximately $12.7 billion. Profitability also saw a dramatic shift, with SpaceX posting a net profit of $4.4 billion compared to a loss in the same period the prior year. Adjusted EBITDA reached $8.8 billion, underscoring the company's improving operational efficiency.
A primary driver of the financial surge was the Super Intelligence division, which generated roughly $7.6 billion in revenue. This segment, which grew nearly 830 percent year-over-year, overtook other business units to become the largest revenue contributor. The Connectivity segment also performed well, delivering $5.2 billion in revenue as strong subscriber additions pushed the total consumer base for Starlink to 13.6 million users.
During the earnings call, CEO Elon Musk and CFO Bret Johnsen outlined ambitious plans for expansion, particularly in AI compute infrastructure. The company provided first-quarter 2027 revenue guidance ranging from $33 billion to $37 billion, a figure far above the roughly $22 billion modeled by analysts. To support this growth, SpaceX plans fourth-quarter capital expenditures between $35 billion and $40 billion, focused on sites in Memphis and Southaven.
Management indicated targets for nameplate compute capacity of 2.5 to 3 gigawatts by the end of the current year, with pathways to exceed 13 gigawatts by the end of 2027. Musk noted that demand from hyperscalers remains relentless, citing compute pricing that supports payback periods of less than a year, and in some cases as short as six months. Other operational highlights included recent Starship orbital successes, V3 satellite deployments, and the rapid adoption of Grok Bot.
The strong performance and future outlook prompted a rapid reassessment of the stock's value by major financial institutions. JPMorgan more than doubled its price target to $500 from $240, maintaining an Overweight rating. Cantor Fitzgerald raised its target to $345 from $246, while Barclays increased its target to $300 from $254. Both firms maintained Overweight ratings on the stock.
Other prominent banks also adjusted their valuations upward. Citi increased its target to $240 from $200 with a Buy rating, while UBS moved its target to $230 from $210, also maintaining a Buy rating. TD Cowen raised its target to $224 from $200, and Morgan Stanley held an Overweight rating with a $300 target. Wells Fargo and Clear Street also contributed to the upward trend, raising their targets to $274 and $248, respectively.
Analysts broadly cited the strong quarterly earnings, accelerating AI compute expansion, and progress in Starlink and Starship as key drivers for the higher long-term growth expectations. While the elevated spending plans remain a point of focus for some investors, the average analyst price target has moved significantly higher, reflecting greater conviction in SpaceX’s trajectory across its launch, connectivity, and artificial intelligence businesses.
Source: Teslarati
