Analysts Double SpaceX Valuation Hopes After Record Quarter

Investors holding SpaceX shares on the Nasdaq saw immediate momentum following the company’s release of third-quarter 2026 results on October 20. The stock, which closed at $147.79 the previous day, jumped approximately 8 percent in early premarket trading on October 21. This surge reflects a broader shift in market sentiment, with numerous financial institutions revising their long-term outlooks upward after reviewing the company’s financial performance and strategic guidance.

The company’s financial trajectory has accelerated sharply over the past year. SpaceX reported total revenue of $14.6 billion, representing a 161 percent year-over-year increase and surpassing consensus estimates of approximately $12.7 billion. Profitability also improved dramatically; the firm recorded a net profit of $4.4 billion, a significant turnaround from a loss in the same period the previous year. Adjusted EBITDA reached $8.8 billion, underscoring the operational efficiency of its diverse business units.

Growth was driven primarily by the Super Intelligence division and its connectivity services. The AI segment generated roughly $7.6 billion, marking an 830 percent annual increase and becoming the largest revenue contributor. Meanwhile, the Connectivity segment delivered $5.2 billion, supported by subscriber growth that expanded the Starlink consumer base to 13.6 million users. These segments have become central to the company’s valuation narrative, alongside continued progress in launch capabilities and satellite deployment.

The earnings call proved pivotal in reshaping analyst expectations. CEO Elon Musk and CFO Bret Johnsen provided first-quarter 2027 revenue guidance ranging from $33 billion to $37 billion, a figure substantially higher than the approximately $22 billion previously modeled by analysts. To support this growth, management outlined fourth-quarter capital expenditure plans between $35 billion and $40 billion, with a heavy focus on AI compute infrastructure in locations such as Memphis and Southaven.

Management indicated that relentless demand from hyperscalers is driving these investments, with compute pricing structures supporting payback periods of less than a year, potentially as short as six months. The company aims to achieve 2.5 to 3 gigawatts of nameplate compute capacity by the end of 2026, with pathways discussed to reach 13 gigawatts or more by the end of 2027. Additional strategic highlights included Starship orbital successes, V3 satellite deployments, and the formation of committees to explore a potential combination with Tesla.

In response to these developments, a wave of price target increases swept through the sell side. JPMorgan more than doubled its target to $500 from $240, while Cantor Fitzgerald raised its estimate to $345 from $246. Other major firms followed suit, including Barclays, which moved to $300, and Citi, which increased its target to $240. Wells Fargo and Clear Street also adjusted their valuations higher, to $274 and $248, respectively.

These adjustments reflect greater conviction in SpaceX’s trajectory across launch, connectivity, and its emerging AI business. While elevated spending remains a point of focus for some investors, the consensus view has shifted toward recognizing the company’s enhanced earnings power and long-term growth potential in the coming year.