The excitement around space exploration company SpaceX leading into its initial public offering was only matched by the disappointment that happened shortly after its debut.
After rocketing up to a post-IPO high of $225.64 days after its debut. SpaceX (SPCX) dropped as low as $113 per share on July 27; after a brief spike in early August, the stock retested those lows the following session.
While shares closed trading Monday, Sept. 28, down 2.16% to $145.47 per share, and down more than 5% over the past five sessions, the stock is still positive in September.
So if you waited to buy in after the initial offering buzz abated, as many prudent investors did, and bought in near the bottom, your SpaceX position is doing pretty well.
Late July SpaceX investors timed it perfectly
Analysts at Finbold engaged in a recent thought experiment: what is the position of an investor who bought into SpaceX at its bottom on July 27?
According to them, an investor who put $1,000 into SpaceX stock on July 27, when shares were trading at about $113, would now be holding a position worth about $1,310 based on its Friday closing price of $148.68.
SpaceX:
- Morgan Stanley doubles down on SpaceX stock for investors
- SpaceX analyst plots path to bold $100 billion claim
- JPMorgan resets SpaceX price target after earnings
SpaceX raised about $75 billion with its IPO, so clearly there was plenty of retail and institutional interest in the stock. But prudent investors waited, and those who exercised a bit of patience were rewarded.
SpaceX has a unique lockup period for insiders that bars them from selling stock in phased tranches. Sept. 24 was the most recent tranche; the next comes Oct. 9, and the one after that comes Oct. 24.
Deutsche Bank maintains buy rating
Deutsche Bank analysts expect SpaceX to achieve more than 2.3 GW of compute by the end of November and reach more than 2.7 GW early next year.
That should be more than enough compute capacity for its cloud hosting deals and its growing inference needs for Cursor and Grok Bot, and Grok training.
DB analysts estimate that the five customers SpaceX already has signed to Neocloud deals are worth $54.5 billion on an annualized revenue run-rate basis. While the company hasn’t revealed exactly how much compute it has to allocate to those contracts, DB estimates that the total is between 1.2 and 1.4 GW, implying $40 billion to $45 billion per GW pricing.
Related: OpenAI makes development moves to counter SpaceX and Meta
“Looking forward, with more capacity coming online, we expect at least a few more large deals to materialize given industry constraints. Perhaps worth mentioning, with the rise of agentic AI offerings, we think this will only further increase compute demand,” analyst Edison Yu wrote in a note viewed by TheStreet.
DB has a $235 price target that represents a potential 38% upside from the stock’s closing price Monday.
CEO Elon Musk hints at possible merger
SpaceX CEO Elon Musk spoke at the All-In Summit in Los Angeles on Sept. 14 and was asked why Tesla and SpaceX had not merged yet.
His answer suggests that the tie-up is only a matter of time.
“With all this collaboration, on so many levels, who can imagine what action one might take when there’s so much close collaboration in so many areas,” according to Yahoo Finance.
“Obviously, you know, we can’t talk about combining companies on an earnings call. It’s got to be done with the appropriate process,” he said.
A merger with Tesla, another trillion-dollar company, would obviously give SpaceX’s stock much more upside.
Related: SpaceX reaches orbit as Elon Musk sets bigger Starship goal