Full Breakdown
Analysts See AI Compute Leasing and Starship Success Driving SpaceX’s Next Growth Wave
By Drooid · · How we work
Core Event
Wall Street analysts upgraded SpaceX (NASDAQ: SPCX) after Starship Flight 14 reached orbit and deployed 26 next-generation Starlink V3 satellites. Despite an engine shutdown that shortened the flight, the launch showed the vehicle’s ability to place operational payloads in orbit. Brokerages also highlighted the company’s emerging terrestrial AI compute-leasing business as the fastest-growing revenue stream, projecting it to dominate earnings within a few years.
Background & Context
SpaceX’s traditional revenue sources—launch services and the Starlink broadband constellation—have already positioned the firm as a major commercial-space player. Recent quarterly results showed $23 billion in revenue over the last twelve months, with analysts expecting profitability to begin this year. The firm has secured cloud-compute contracts with Google and Anthropic, marking its entry into the AI-infrastructure market.
Data & Statistics
- Current share price: $145.47; market cap ? $1.97 trillion.
- Consensus “Buy” rating: 27 Buy, 5 Hold, 2 Sell; average price target $233.10 (? 60 % upside).
- UBS target: $210; TD Cowen target: $200; Morgan Stanley target: $300.
- Projected AI compute-leasing revenue: $14 bn in 2026, $66 bn in 2027, $133 bn in 2028.
- Expected AI compute capacity: 2.1 GW in 2024, 6.0 GW by 2027, 22 GW by 2031.
- Starlink subscriber forecast: 107 million by 2031, including 10 million U.S. customers.
- UBS Q3 outlook: $13.8 bn total revenue (? 7 % above Street estimate) and $7.5 bn adjusted EBITDA (? 9 % above estimate).
Official Statements & Responses
John Blackledge of TD Cowen called the AI compute-leasing segment “the biggest near-term revenue opportunity” and said it could become SpaceX’s largest revenue source by Q1 2027. UBS analyst John Hodulik cited recent cloud-compute wins and the successful Starship launch as catalysts, noting AI-related revenue is expected to lead with $7.6 bn in Q3. Bank of America’s Ronald Epstein reiterated a “Buy” rating, citing Flight 14 as proof of Starship’s operational capability. Morgan Stanley gave the flight a “B+” grade, flagged recurring V3 propulsion issues and identified Flight 15 as a critical test for the program’s long-term impact on the stock.
Verbatim Quotes
- “Terrestrial AI Compute leasing is SPCX’s biggest near-term revenue opportunity; we estimate AI Compute leasing revenue of $14BN in ’26 (35% of total SPCX rev), rising to $66BN in ’27 (~58% of total) and $133BN in ’28 (~65% of total),” — John Blackledge, analyst
- “No other entity will be able to match SPCX’s LEO upmass capacity, perhaps for a decade,” — John Blackledge, analyst
Conflicting Reports & Gaps
Analyst price targets range from $200 to $300, reflecting differing assumptions about AI-compute adoption timing. Revenue forecasts also differ: TD Cowen projects $14 bn in 2026, while UBS expects AI-related revenue of $7.6 bn for Q3 alone. No source provided a definitive timeline for when AI compute leasing will surpass launch and Starlink revenues, leaving uncertainty about the transition pace.
What’s Next
- Flight 15: Morgan Stanley expects the next Starship flight, including a potential in-flight catch, to be a major catalyst for the stock.
- AI Capacity Expansion: TD Cowen forecasts terrestrial AI compute capacity to reach 6 GW by 2027, underpinning the projected revenue surge.
- Starlink Growth: Continued subscriber acquisition is expected to sustain connectivity revenue, with a 59 % year-over-year increase projected for the quarter.
These developments suggest SpaceX’s valuation will hinge on scaling its AI compute-leasing business and the reliability of its Starship launch system in the coming years.