SpaceX shares (NASDAQ:SPXCX) are sharply higher today, up 10% after Argus Research flipped its rating to Buy from Hold and set a $160 price target, citing rapid returns on the company’s aggressive artificial intelligence investments and a revenue trajectory that has exceeded initial forecasts.
The SpaceX stock price is currently trading at $127, in what is currently shaping up to be the second best session since the company’s initial public offering in June. The rally comes after a bruising post-IPO period that saw shares spike above $225 in mid-June before sliding below the $135 offering price in recent weeks. Short sellers had accumulated roughly $15.5 billion in paper profits as the stock retreated from its all-time high, making today’s reversal particularly painful for bearish positions.
Argus Research’s upgrade centers on SpaceX’s disclosure during its first quarterly earnings call as a public company that the firm is tracking toward a year-end 2026 revenue run rate approaching $100 billion. The analyst described this figure as “significantly above our initial forecast” suggesting the company’s vertical integration across launch services, Starlink satellite connectivity, and AI infrastructure is accelerating faster than anticipated.
The upgrade acknowledges what had been a key concern for markets: higher-than-expected capital expenditures, predominantly directed toward AI data center and computing infrastructure. Rather than viewing this spending as a structural margin headwind, Argus now characterizes the investments as delivering “rapid payback” due to “robust growth” in computing capacity. This reframing shifts the narrative from cost problem to high-return growth investment, a critical distinction for a stock trading at elevated multiples.
SpaceX reported $18.7 billion in revenue for fiscal 2025 prior to its IPO, meaning the $100 billion run-rate guidance implies more than a fivefold increase in annualized revenue over an 18-month period. The company’s Q2 earnings call also highlighted upcoming Starlink version 3 orbital payload deployments and an expectation that the AI segment could reach breakeven in the third quarter, according to summaries circulating among institutional investors.
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The Argus call follows a similar bullish thesis from JP Morgan, which raised its price target to $240 this week with an Overweight rating, emphasizing SpaceX’s extreme vertical integration and a potential path to more than $100 billion in revenues by 2027.
The AI Infrastructure Bet
Central to the bull case is SpaceX’s aggressive push into AI infrastructure, which management has framed as a natural extension of the company’s expertise in large-scale engineering and vertical integration. The company is building out data center capacity and high-performance computing clusters that leverage its satellite network for connectivity and its launch capabilities for deploying next-generation orbital infrastructure.
Bears have questioned whether SpaceX can achieve competitive economics in the AI infrastructure space against established cloud providers and whether the capital intensity will erode margins in the core launch and Starlink businesses. The Argus upgrade suggests that at least some institutional investors are gaining confidence that the payback period on these investments is shorter than initially feared, potentially validating management’s strategy.
The Q2 earnings disclosure that the AI segment could reach breakeven by Q3 would represent a significant milestone, demonstrating that the business can scale to profitability faster than skeptics anticipated. However, breakeven is a far cry from generating the returns necessary to justify the premium valuation, and execution risk remains elevated.
The $160 price target from Argus implies roughly 26% upside from current levels, while the $240 target from J.P. Morgan suggests nearly 90% appreciation, both predicated on the company meeting or exceeding its $100 billion revenue run-rate goal and demonstrating that AI infrastructure investments generate attractive returns.
Today’s rally offers a reprieve for bulls who have endured a painful post-IPO drawdown, but the underlying debate about valuation, execution risk, and the sustainability of hypergrowth remains far from resolved, setting the stage for continued volatility as SpaceX transitions from private market darling to public market battleground.
