Bernstein Initiates SpaceX at Outperform, $239 PT
Bernstein SocGen Group analyst Douglas Harned initiates coverage on SpaceX (NASDAQ: SPCX) with a Outperform rating and a price target of $239.
“We initiate coverage on SpaceX at Outperform – target $239.
The case for SpaceX depends on success of its space launch capabilities (particularly Starship), with value creation mainly from AI through orbital data centers.
Our AI growth trajectory lags company expectations from our more conservative Starship launch ramp (we model roughly 3,500 in 2031).
The case for a multi-trillion dollar valuation is about “if” not “when”, for orbital data center plans.
Starship, takes rocket capacity up by a factor of four from the current Falcon 9, and adds full reuse (both stages). Full reuse would enable launch rates far beyond any competitors.
It should be demonstrated later this year. The next launches will be important to follow. Orbital data centers eliminate costs of power, cooling, maintenance, land, and more.
We expect economics to work as a lower cost solution for AI compute. Although there is non trivial engineering work, we see no fundamental technical roadblocks. This is not new science.
If SpaceX can deliver compute at large scale with lower costs than terrestrial, profit potential should readily move to the hundreds of billions of dollars.
Of our $404bn in 2031 EBITDA, $284bn is AI with rapid growth thereafter. Should SpaceX significantly advance its Intelligence capabilities (e.g., Cursor acquisition), there would be upside.
In Connectivity, Starlink is on a global growth trajectory as it expands offerings and delivers high margins. Expect high growth in global consumer and enterprise broadband.
We are more cautious on the direct-to-device mobile business, which will require a terrestrial component. Should SpaceX succeed as an MVNO, there would be upside to our numbers.”
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