SpaceX is having one of those moments that captures everything investors love and fear about high-growth stocks.
Shares have rebounded sharply after falling from their post-IPO highs, with the stock recently trading around $140 to $150. Back-to-back Falcon 9 launches have added to the momentum, while strong second-quarter revenue and explosive growth in its AI business are giving investors another reason to look beyond the traditional Starlink and space story.
But Wall Street is far from unanimous.
While the average analyst price target is around $227, Phillip Securities analyst Glenn Thum has maintained a Sell rating with a $75 price target. That would represent roughly 46% downside from the recent $140 level.
The striking part is not simply the bearish target. It is the argument behind it.
The bull case is getting bigger
SpaceX’s latest numbers make it easy to understand why investors are excited.
The company generated $7.81 billion in revenue in Q2 2026, up 92% from the same period a year earlier and about 15% above consensus estimates.
Three businesses are driving the story:
- Connectivity: $4.29 billion in revenue, up 66% year over year
- AI: $2.56 billion, up 247%
- Space: $962 million
Starlink remains the largest part of the business, with its subscriber base reaching 12 million, roughly double the previous year’s level.
But AI is quickly becoming the more interesting piece of the puzzle.
AI already accounts for roughly one-third of quarterly revenue, making it far more than a side project. SpaceX is also targeting more than 2 gigawatts of compute capacity by December, compared with 1.4 gigawatts in June.
Management is aiming even higher, targeting a $100 billion annualized revenue run rate by December 2026.
That is an enormous ambition.
And it is exactly where the debate begins.
The $75 argument: growth may be coming at too high a price
Glenn Thum’s concern is not that SpaceX lacks growth.
It is that investors may be pricing in too much future growth too early.
The biggest question surrounds SpaceX’s AI cloud contracts.
The company has rapidly expanded its AI infrastructure, but some of those agreements can be terminated with relatively short notice after the initial ramp-up period.
That creates an uncomfortable mismatch.
SpaceX is spending billions today to build computing capacity for demand that investors are assuming will remain strong for years.
Thum argues that the market needs to see more long-term, multi-year commitments before giving SpaceX a premium valuation for its AI business.
There is also customer concentration to consider.
One AI customer accounted for 19.5% of SpaceX’s Q2 sales, up from less than 10% a year earlier.
That is a meaningful dependency for a business expanding at such speed.
If that customer reduces spending, the impact on revenue could be significant.
The spending problem
The other side of the equation is capital expenditure.
SpaceX spent approximately $18.37 billion on capital expenditures in Q2, more than twice its quarterly revenue.
Most of that spending was directed toward AI compute infrastructure.
The company is effectively building ahead of demand.
That strategy can work spectacularly if AI demand continues to surge.
But if demand slows, SpaceX could be left with an enormous infrastructure bill and less revenue growth than investors expected.
This is why the bearish argument is more complicated than simply saying the stock is expensive.
The real question is whether today’s spending will create tomorrow’s earnings.
The valuation looks extreme, but only if you look at the near term
At around $140 per share, SpaceX’s valuation looks difficult to justify using current earnings.
The stock is trading at hundreds of times forward earnings based on current estimates, while its forward GAAP multiple is even more extreme.
But there is another way to look at it.
Analysts expect SpaceX’s earnings to increase dramatically over the next several years.
Projected GAAP EPS rises from around $0.008 in 2026 to:
- $1.66 in 2027
- $4.95 in 2028
- $7.29 in 2029
- $11.19 in 2030
At $140, that means the valuation looks very different if the long-term forecasts actually materialize.
By 2030, the stock would be trading at roughly 12.5 times projected earnings.
That is the key reason investors are willing to pay such a high price today.
They are not necessarily buying SpaceX for what it earns now.
They are buying what they believe it can become.
The revenue target is the real test
There is one number investors should watch particularly closely: $100 billion.
SpaceX is targeting a $100 billion annualized revenue run rate by December.
To get there, the company would need to generate around $8.3 billion in monthly revenue.
Q2 revenue worked out to roughly $2.6 billion per month.
That means the company needs an extremely rapid acceleration over the next few months.
The ingredients are there.
SpaceX points to newly contracted cloud services revenue, Starshield government contracts, Starlink growth and the planned Cursor acquisition as major contributors.
But the size of the required ramp means execution matters enormously.
A few strong quarters could make today’s valuation look much more reasonable.
A slowdown could make the opposite case very quickly.
Investors are betting on several businesses at once
This is what makes SpaceX different from a conventional growth stock.
Investors are effectively betting on several stories simultaneously.
Starlink needs to keep adding subscribers and expanding its enterprise and government business.
AI needs to turn massive infrastructure spending into durable, recurring revenue.
Space needs to keep increasing launch activity while the company continues developing its next-generation systems.
And the company needs to do all of this while maintaining enough profitability and cash generation to support its enormous investment program.
That is a lot of moving parts.
The upside is equally significant.
If AI demand remains strong, Starlink continues scaling and SpaceX successfully expands its launch infrastructure, the company’s earnings could grow rapidly enough to make today’s valuation look far less intimidating several years from now.
The institutional backing is another piece of the puzzle
There is clearly no shortage of sophisticated investors willing to take the SpaceX story seriously.
Nvidia disclosed 122.76 million SpaceX shares worth nearly $21 billion, while Alphabet reported 551.2 million shares valued at roughly $94.2 billion as of June 30.
Those positions add considerable institutional credibility to the story.
There is also another near-term factor investors are watching.
Around 320 million restricted shares become eligible for transfer on August 20.
That sounds like a potential source of selling pressure, but the previous lock-up release on August 6 involved far more shares and did not trigger the selling wave many investors feared.
Instead, SpaceX shares recovered above their $135 IPO price.
So, who is right?
The bulls and the bears are essentially looking at the same company from different time horizons.
The bullish investor sees:
- 92% revenue growth
- AI revenue up 247%
- 12 million Starlink subscribers
- Rapidly expanding compute capacity
- A massive government and commercial backlog
- A path toward $100 billion in annualized revenue
The bearish investor sees:
- Extremely high valuation
- Huge capital expenditure
- Customer concentration
- AI contracts that may not yet provide enough long-term certainty
- A revenue target that requires an extraordinary near-term ramp
Both sides have a reasonable argument.
That is what makes SpaceX such a fascinating stock to watch.
The bigger question for investors
The real debate is not whether SpaceX is growing.
It clearly is.
The question is how much of that future growth is already reflected in the stock price.
At $140 to $150, investors are paying for years of expected expansion. If SpaceX delivers on its AI ambitions, scales Starlink and converts its massive infrastructure spending into durable earnings, the current valuation could eventually look much less extreme.
But if AI contracts prove less durable, spending remains elevated and the revenue ramp falls short, the $75 thesis becomes much harder to dismiss.
For now, SpaceX sits at the center of a classic growth-stock debate:
Are investors looking at the next trillion-dollar business, or paying too much for a future that still has to be delivered?
The next few quarters should start providing the answer.