SpaceX stock soars on top call, here’s what Wall Street missed

Wall Street is fairly bullish on SpaceX (SPCX) stock, and Oppenheimer's latest price target raise is pushing that narrative further.

Oppenheimer analyst Timothy Horan increased his price target on SpaceX stock to $280 from $250, according to TipRanks . His price target implies about 87% upside, as SpaceX is trading near $150. The raise is a result of Horan's growing confidence that SpaceX can become a real AI giant.

On the surface, MarketBeat's data shows 27 of 42 analysts covering the stock rate SpaceX a buy, and this fresh take from Oppenheimer makes the stock look very attractive.

The stock closed 6.42% higher following this analyst call. But does the thesis make sense?

Oppenheimer values SpaceX as a "unique vertically integrated AI platform"

The core valuation question is whether you believe that it can capture the market it said it aspires to capture in its S-1 . SpaceX's S-1 states that the company estimates its total addressable market (TAM) at $28.5 trillion, of which $26.5 trillion, or 92.98%, is expected to come from AI.

This means the long-term investment case depends almost exclusively on the success of SpaceX's AI platform.

Horan believes that SpaceX's AI play is progressing well and has increased his long-term revenue estimates for the company by about 10%.

He said that the acquisition of Cursor is "transformative" for the company and will help improve its AI platform, including Grok.

The key obstacle for growth is infrastructure capacity, and he believes it will require much higher capital expenditures (capex).

Investors who reviewed SpaceX's second-quarter (Q2) earnings report likely raised their eyebrows reading that capex claim.

It is really simple: AI revenue in Q2 was $2.56 billion, but AI capex was $15.83 billion, and net loss was $541 million.

We can estimate that, despite the impressive revenue growth from AI, if the capex has to be much higher, as an Oppenheimer analyst said, the company will continue to report net loss instead of income for the foreseeable future.

With an average price target of $221.2 for SpaceX, Oppenheimer is above consensus. However, this price target is nowhere near the most bullish one, Raymond James's , at a whopping $800. Raymond James was one of the underwriters, and it certainly has an incentive to see the stock soar.

I've explored the problem SpaceX underwriters face, Bank of America more specifically, in my article Bank of America sets alarming SpaceX stock price target .