SpaceX Faces Post-IPO Volatility, Yet Wall Street Predicts Significant Stock Price Gains

• SpaceX's stock has seen volatility since the company's IPO nearly three weeks ago, but analysts project significant long-term growth.

• Analysts highlight the Starship reusable rocket as a pillar of the company's future success, and point to growing AI revenue and the potential for acquisitions as additional reasons for optimism.

• Risks include high cash burn and reliance on aggressive growth assumptions for future success.

Wall Street is starting to size up SpaceX (SPCX), and the stock is getting stellar reviews.

Analysts who have launched coverage of the stock since the company's IPO have said SpaceX stands to become "a major hyperscaler" and "the largest communications, cloud and AI company in the world." That positivity didn't translate into gains today -- the stock fell 8% to around $157.50 -- but Wall Street sees plenty of room for SpaceX shares to rise in the months ahead.

The average price target from three firms that have initiated coverage of the stock recently stands at $203. While well below the $225 all-time high hit two weeks ago, it's nearly 30% above current levels, and 35% higher than the opening price for SpaceX shares when they began trading on June 12.

WHY THIS MATTERS TO YOU

Elon Musk's space exploration, connectivity and AI company is now a part of major benchmark indexes and the funds that track them, and will be joining some more, which means the stock's performance is likely represented in your retirement account.

The latest bullish view was delivered Tuesday by analysts at Wedbush led by Dan Ives, who initiated coverage of SpaceX with an "outperform" rating and a price target of $190. That target is derived from revenue estimates for 2028, which is expected to be the first year that all three of SpaceX's businesses scale.

They view SpaceX's spacecraft and rocket called Starship as "the essential layer" driving the company's success. Its reusability is a strategic advantage from a cost perspective, but also generates a "feedback loop" through which the company can improve its flight rates without driving up capital expenditures, according to Ives and his team. They add that without it, the company's broadband business Starlink would not have reached the scale it has so far, and that SpaceX's ambitions to build orbital data centers would otherwise not be "feasible."

Oppenheimer's Timothy Horan started coverage on the stock on June 11, prior to the company's IPO, with an "Outperform" rating and a $190 price target. A week later, the firm raised the target to $250 following SpaceX's acquisition of AI startup Cursor. Horan's models suggest that Cursor revenue will hit $6 billion by the end of this year, raising SpaceX's AI business revenue by 84% to $8.75 billion in the fourth quarter.