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It seems like everyone has an opinion on the SpaceX (NASDAQ:SPCX) share price. Some are sure it’s grossly overvalued while others see today’s price as tolerable given the rocket company’s immense long-term growth potential.
In other words, SpaceX is a Marmite stock, similar to Tesla. This is reflected in the incredibly wide spread of broker price targets, which range from $75 (Phillip Securities) all the way up to $800 (Raymond James).
Earlier this month, JPMorgan reiterated its $240 price target. If achieved, this would see SpaceX surge roughly 66% from its present level.
But given the risks, is it worth bothering with?
A mystery customer
To try and get a better idea, I recently listened to SpaceX CFO Bret Johnsen’s fireside chat at the Goldman Sachs technology conference on 10 September. He revealed two things that interested me.
The first was that SpaceX has inked its third large AI compute hosting deal. We don’t know who the mystery customer is, but Johnsen said it adds $1.11bn a month in recurring revenue, starting 1 December.
As a reminder, SpaceX is already generating $1.25bn a month from Anthropic to help run Claude, and $920m a month from Google. Adding just these up, we get annual revenue of roughly $39bn — more than double SpaceX’s total revenue for 2025!
The rest of the business, particularly Starlink and the defence-related communications network Starshield), is also scaling rapidly. This gives SpaceX confidence that it will reach a $100bn annual recurring revenue run rate by the end of this year.
According to the CFO, capital outlay on AI compute is delivering a payback in less than 12 months. So this isn’t entirely speculative spend, assuming customer demand stays strong.
Starship 14
Beyond AI, SpaceX is spending a fair chunk on developing Starship, the world’s largest rocket. This reusable platform is absolutely central to SpaceX’s long-term ambitions, profitability, and ultimately share price.
Starship is so core to the rest of our business in really all the segments.
Bret Johnsen.
The central reason is that a reusable Starship would reduce launch costs by around 90%. SpaceX is getting closer to making this a reality, as the last test flight (its 13th) achieved a soft splashdown, with the heat shield intact.
Afterwards, SpaceX towed the ship, which looked like a giant whale, back to shore. Then its engineers swarmed all over it to analyse how the heat shield performed.
Johnsen revealed in the conference that the forthcoming Test 14 (scheduled for 22 September) will be a revenue-generating one. It will aim to complete six full orbits of Earth and deploy the first batch of Starlink V3 satellites.
Where next?
Given that revenue is absolutely soaring, I don’t expect the stock to crash below $100 by next September. But if capital spending and losses come in higher than expected, and the Starship tests fail to achieve their objectives, it may well do.
Whether SpaceX stock is worth taking seriously or not depends on your risk tolerance. It’s certainly not one for the faint-hearted and there’s a lot that could go wrong.
For me though, it’s one to consider buying and holding for many years (well beyond September 2027). The market opportunities a large fleet of reusable Starships could unlock appear unusually large.
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Ben McPoland owns shares in SpaceX.
This story originally appeared on Motley Fool
