Argus Research raised SpaceX to buy from hold on Friday, setting a $160 price target and pointing to fast payback on the company's AI spending. The call comes days after the stock's first earnings report as a public company triggered a sharp selloff, and hundreds of millions more shares could unlock in the months ahead.
Argus Research raised its rating on SpaceX to buy from hold on Friday, setting a 12-month price target of $160. That target implies 39% upside from Thursday's close. The stock climbed 10% in early trading, extending a rebound that has added roughly 17% over the past five sessions after four straight weekly declines.
Argus bets on AI payback and Musk's Tesla record
SpaceX's second-quarter earnings and revenue beat Wall Street expectations on Tuesday. Capital expenditures rose six-fold to more than $18 billion in the same quarter, largely because of the company's deepening push into artificial intelligence. Analyst Steve Silver said Argus is encouraged by the rapid payback on those investments, citing robust growth in computing capacity.
Argus's bullish case also leans on Musk's track record at Tesla, the entrepreneur's other big IPO. Silver wrote that "a $10,000 investment made in TSLA in 2010 is worth $2.5 million today".
Lockup expirations loom over the rally
More than 300 million shares could unlock and become eligible to trade later this month, according to a SpaceX prospectus. Several hundred million more shares could become available for sale in September and October, too.
Even after Friday's bounce, SpaceX was trading roughly 50% below its record high of $225.64, set in mid-June shortly after the company's IPO. Argus said investors should treat near-term pullbacks as buying opportunities given SpaceX's strong fundamentals, even as it expects shares to stay volatile through further lockup tranches.
Of 36 analysts covering the stock, 28 rate it buy or strong buy, according to LSEG data. SpaceX remains the most-researched ticker on the Yahoo Finance platform over the past month.
Sources: CNBC, Yahoo Finance
Trading involves risk.
Risk Disclaimer
