SpaceX stock is making headlines once again as it surges to nearly $140, up almost 5% in the past week. Investors are showing renewed interest in the stock, seeing it as a new opportunity to invest in Tesla CEO Elon Musk’s latest venture. The latest 13F filings are also contributing to the buzz, with Nvidia disclosing a significant holding of 122.76 million SpaceX shares worth nearly $21 billion.
Alphabet, on the other hand, reported owning 551.2 million shares valued at almost $94.2 billion. These institutional investments are a testament to the confidence big players have in SpaceX, especially since its groundbreaking IPO in June.
Looking ahead, around 320 million restricted shares are set to become eligible for transfer on August 20. While a previous lock-up release of 911.5 million shares did not result in a sell-off, Wall Street analysts remain bullish on SpaceX. The average price target sits at around $227, implying a 62% upside potential, according to Seeking Alpha.
However, not all analysts share this optimistic view. Phillip Securities analyst Glenn Thum has taken a bearish stance on SpaceX, giving a $75 price target, signaling a 46% downside from the current price. Thum, a five-star analyst with an impressive track record, raises concerns about SpaceX’s heavy spending on AI and the potential risks associated with high customer concentration.
SpaceX’s revenue mix highlights the growing importance of AI, which accounted for 33% of sales in the second quarter. Musk’s vision of AI becoming the company’s main revenue driver is supported by significant growth in AI revenue, fueled by cloud-service agreements.
Thum’s cautious outlook stems from SpaceX’s high valuation multiples compared to sector peers, with forward non-GAAP earnings trading at 373 times earnings. The analyst emphasizes the need for SpaceX to convert short-term sales growth into sustainable long-term profitability to justify its current valuation.
Investors in SpaceX are betting on future growth prospects, particularly in AI, Starlink, and space businesses. The debate revolves around whether SpaceX can deliver on its promises and translate revenue growth into bottom-line results. Thum’s bearish thesis underscores the importance of closely monitoring SpaceX’s execution and financial performance in the coming quarters.
