SpaceX turned its first quarterly profit in the three months through September, posting $4.4 billion in net income after a string of losses. The company did it by outgrowing every forecast on the books.
Wall Street has taken notice. Bank of America became the latest firm to lift its outlook on Oct. 22, and its new target suggests the bank sees plenty of room left to run, according to a note the firm shared with TheStreet.
Whether the stock actually gets there depends on far more than one strong report, and the risks are just as large as the rewards.
Bank of America’s $275 SpaceX call
Bank of America raised its price target on SpaceX to $275 from $235 and kept its buy rating. The new target implies upside of about 73% from the $159.31 share price cited in the report, a bold call for a stock that has already swung wildly since its debut.
Also read: Elon Musk makes an audacious claim on the growth of SpaceX
That $159.31 was where shares stood when the note was issued. Part of the excitement came from Elon Musk revealing on the earnings call that the boards of SpaceX and Tesla had formed separate committees to study a possible combination of the two companies.
A deal of that size would still face regulatory and political scrutiny.
Bank of America’s move caps a busy stretch for analysts covering the stock. Goldman Sachs raised its own target to $230 from $220 on Oct. 6, ahead of the report, according to GuruFocus. This points to the growing weight of SpaceX’s AI computing business in its valuation.
Even so, the Street is far from unanimous. The consensus rating stands at moderate buy with an average target of $244.19, MarketBeat noted, though four firms carry sell ratings on the stock.
Bank of America’s call now sits well above that average, making it one of the more aggressive bets on the name.
The quarter behind the BoA SpaceX upgrade
BoA’s optimism rests on a quarter that blew past forecasts. SpaceX earned $0.35 a share against a consensus estimate of $0.10, while revenue rose 161.4% from a year earlier to $14.58 billion, the bank’s research note showed. A year ago, the company was still posting a loss.
Analysts had underestimated the top line by roughly $1.9 billion, and the stock climbed sharply in morning trading on Oct. 21 as investors digested the numbers. That kind of gap between expectations and results is rare for a company this size.
The real story is where the growth came from. The Super Intelligence segment, SpaceX’s AI arm, generated $7.6 billion in revenue and posted its first operating profit, overtaking the Starlink connectivity business. Cloud agreements, the August purchase of Cursor, and wider adoption of Grok all played a part in that jump.
Starlink still matters, of course. President Gwynne Shotwell described it as “another standout quarter driven by continued growth across our consumer, enterprise, and government businesses,” as reported by Yahoo Finance.
The satellite internet service also expanded into new markets, including Vietnam and Uganda, during the period.
Walter Cicchetti / Getty Images
Spending, insider sales, and a split Street
The bill for SpaceX’s growth is enormous.
Capital spending reached $19.6 billion in the third quarter, primarily for AI compute, Starship infrastructure, and satellite production, and management guided to between $35 billion and $40 billion in the fourth, according to a TradingKey summary on Insights. That is close to doubling the outlay in a single quarter.
Analysts flagged this risk well before the latest numbers came out. Cantor Fitzgerald initiated coverage in August with an overweight rating but noted that spending and post-IPO selling pressure remained open questions.
Neither concern has fully gone away, even after a far stronger quarter than many expected.
More SpaceX:
- Goldman Sachs revamps SpaceX stock estimates before crucial earnings test
- Musk called Anthropic ‘evil’; SpaceX’s deal with it nearly doubled
- Morgan Stanley doubles down on SpaceX stock verdict for investors
Selling pressure is the more immediate worry. Insiders became eligible to sell another large block of shares on Oct. 22, with up to 1.3 billion shares becoming available two trading days after the Q3 results. The release created the potential for substantial selling pressure.
Not every analyst shares Bank of America’s enthusiasm, either. HSBC opened coverage in July with a hold rating and a $115 target, valuing each of SpaceX’s businesses separately, as reported by TheStreet.
That target sits far below where the stock trades today, a reminder of how wide the range of opinions remains.
What SpaceX investors should watch next
Share supply comes first. Another time-based release is set for Oct. 26 because the scheduled day falls on a weekend, while Musk himself cannot sell until 366 days after the June 12 IPO.
How smoothly the market absorbs those shares will say a lot about demand at current prices.
Investors should also track whether management delivers on its own numbers. CFO Bret Johnsen guided to $33 billion to $37 billion in revenue for the first quarter of 2027, well short of Musk’s talk of up to $1 trillion in annual recurring revenue by the end of that year.
Johnsen’s forecast is the one Wall Street will hold the company to, and any shortfall would be hard to explain away.
Finally, there is the Tesla question and the rocket itself. Musk said a merger would be a good idea but is not a certainty, and he cautioned that “success is not guaranteed” as Starship’s next mission attempts to catch both the ship and its booster.
Either story could move the stock long before Bank of America’s target comes into view.
Related: Elon Musk sends a strong memo to SpaceX and Tesla stock investors
