Price targets are supposed to tell you where a stock is headed. Sometimes they mostly tell you how much an analyst is willing to believe.
When I wrote about SpaceX’s IPO buyers in September, the stock had already split them into very different outcomes depending on when they got in. Every new forecast since has pulled that crowd in a different direction.
The company handed the bulls plenty of fuel this week. SpaceX’s revenue jumped 161% to $14.6 billion in the third quarter, and it swung to a $4.4 billion profit from a $1.1 billion loss, according to Quartz.
Elon Musk said on the Oct. 20 call that he is “fairly confident” SpaceX can add about 10 gigawatts of computing capacity in 2027.
That is the kind of number that makes Wall Street rewrite its spreadsheets overnight.
JPMorgan analyst Doug Anmuth raised his SpaceX price target to $500 from $240 on Oct. 21 and kept an Overweight rating, Investing.com reported. The new target implies 238% upside from the stock’s $147.79 close on Oct. 20.
What JPMorgan’s $500 target is built on
Anmuth more than doubled his 2027 and 2028 estimates. JPMorgan now models 10 gigawatts of compute by the end of 2027 and total 2027 revenue of $254 billion, the report said.
That points to an annual revenue run rate of about $400 billion by the end of 2027. Management’s own range is far higher, at $500 billion to $1 trillion, Investing.com reported.
Related: Vivian Tu’s IPO warning lands as SpaceX buyers split by $1,851
Most of that growth has to come from artificial intelligence. SpaceX’s Super Intelligence segment brought in $7.6 billion in the third quarter, up 830%, while its connectivity business grew 69% to $5.2 billion, Quartz reported.
The target rests on 20 times JPMorgan’s 2028 earnings estimate of $24.41 a share. I ran that math, and it works out to about $488, so the published $500 either rounds up or uses a slightly richer multiple than the summary describes.
Shares had already moved before the note landed. The stock rose 6.6% after hours to $157.59 on Oct. 20, according to Investing.com, as revenue beat the $12.87 billion that analysts expected.
How the rest of Wall Street sized up the quarter
JPMorgan is far out ahead of its peers, and the size of that gap is the real story in this week’s notes.
Here is where other banks landed after the report, according to Investing.com:
- Morgan Stanley: Kept an Overweight rating and a $300 target while raising its AI revenue forecasts, Investing.com reported.
- UBS: Raised its target to $230, citing strength in AI compute leasing, the same report showed.
- RBC Capital: Reiterated Outperform with a $225 target, pointing to a favorable long-term outlook.
- Mizuho: Raised its target to $205 with an Outperform rating after revenue and adjusted EBITDA beat its own forecasts.
- Stifel: Reiterated a Buy rating and a $190 target.
By my math, JPMorgan’s target is 67% above Morgan Stanley’s, the next highest, and more than 2.6 times Stifel’s. A spread that wide tells you analysts agree the quarter was strong but disagree sharply on what the company is worth.
Goldman Sachs reworked its own numbers ahead of the report, as TheStreet covered in Goldman’s pre-earnings revamp of its SpaceX estimates.
Why the bull case needs revenue to nearly double again
Here is the part I think matters most for anyone holding the stock. SpaceX guided to first-quarter 2027 revenue of $33 billion to $37 billion, according to the Motley Fool transcript.
Multiply that range by four, and you get $132 billion to $148 billion for the year. JPMorgan’s $254 billion forecast needs an average of about $63.5 billion a quarter, close to double the midpoint of that first-quarter guide.
More SpaceX:
- Elon Musk wants every American kid to own a SpaceX share
- SpaceX has a plan to make your phone carrier obsolete
- Elon Musk doubles down on the Roadster with SpaceX thrusters
The backlog covers only part of that gap. SpaceX ended the quarter with $63 billion in backlog, about $42 billion of which it expects to turn into revenue within 12 months, according to the transcript. By my math, that $42 billion equals roughly 17% of JPMorgan’s 2027 revenue forecast.
The spending bill is just as steep. SpaceX spent $19.6 billion on capital projects in the third quarter and guided to $35 billion to $40 billion in the fourth.
That means the stock’s next big moves may come from execution updates rather than earnings beats. Watch the compute capacity SpaceX reports each quarter, because JPMorgan’s target lives or dies on that 10-gigawatt figure.
Anmuth acknowledged the risk. Hitting his numbers requires building out the compute, raising substantial capital and a demand environment that stays strong, Investing.com reported.
There is also a corporate wild card. Musk said SpaceX and Tesla (TSLA) have formed special committees to study a possible merger, which would need shareholder approval, and JPMorgan flagged that regulators could weigh in, Investing.com reported.
Much will likely depend, however, on how quickly the new capacity comes online. Musk said the shortage of AI compute “is going to remain for a long time.” In my analysis, that scarcity is what supports the pricing JPMorgan is counting on.
For your portfolio, a 238% upside call is a reason to understand the assumptions, not a reason to chase. If you own SpaceX, or plan to buy shares as a gift after Musk’s pitch to put a SpaceX share in every American kid’s hands, it helps to know which bank’s math you’re really betting on.
Elon Musk has given investors one more number to watch. Starship Flight 15 is expected next month with a catch attempt, and Musk said success “is not guaranteed.”
Related: JPMorgan sees 67% upside in a hidden SpaceX bet