SpaceX continued its upward momentum on Tuesday, with shares climbing about 1.5% to $173.66 by midday. The move extends a sharp rally that saw gains of more than 7% on both Friday and Monday, pushing the stock back above its IPO price. The recent surge has also lifted CEO Elon Musk's net worth above the $1 trillion mark.
What's Driving the Rally?
The latest leg of the rally was sparked by a bullish note from Morgan Stanley, where analyst Adam Jonas reiterated an "Overweight" rating and maintained a $300 price target. Jonas argued that the shares are unusually cheap when adjusted for expected growth, suggesting the market is still underestimating SpaceX's longer-term earnings potential. His sum-of-the-parts valuation assigns $8 per share to external launch operations, $118 to Starlink connectivity, $8 to consumer AI tools like Grok, and $165 to AI enterprise services.
Goldman Sachs is also adding to the bullish sentiment. Analyst Eric Sheridan raised the firm's 12-month price target to $230 from $220 while keeping a "Buy" rating. Sheridan also increased Goldman's forecasts for SpaceX's AI business across compute capacity, revenue, and margins, noting that AI estimates still look relatively conservative over the next six to 18 months, assuming no broader correction in the AI sector.
Operational Wins Boost Sentiment
Beyond analyst support, SpaceX's operational execution has strengthened the bull case. Last week, the company completed a full orbital test of Starship and deployed all 26 Starlink V3 satellites despite an engine outage during ascent. Shortly after, it launched four astronauts to the International Space Station in under eight hours, while also deploying Google's Project Suncatcher, an experimental payload designed to test AI chips in orbit. These missions added to a positive operational backdrop as investors look ahead to further Starship milestones.
The AI Factor
SpaceX is also benefiting from the expansion of its artificial intelligence business, which it inherited through the acquisition of Musk's xAI in February 2026 and later expanded with the purchase of Cursor. The company's AI strategy is increasingly focused not only on models like Grok but also on providing computing capacity to major technology firms. SpaceX has been expanding its ability to monetize that infrastructure through agreements with customers including Google and Anthropic, making AI a much larger part of the valuation debate. Goldman's latest note reinforces that point, with Sheridan arguing that Street estimates for the AI segment remain conservative over the next six to 18 months.
Defense Adds Another Leg
SpaceX's growing defense business is another component of the investment case. Defense Secretary Pete Hegseth recently appointed Musk as a co-lead of Project Meridian, a Pentagon initiative examining future warfare and emerging military capabilities. SpaceX has also expanded its government and defense business, generating about $5.9 billion in revenue from US government agencies in 2025 and securing more than $6 billion in multi-year US government contracts for Starshield.
The combination of analyst upgrades, successful missions, AI growth, and defense expansion has created a powerful tailwind for the stock. As the company continues to hit milestones and expand its revenue streams, investors are increasingly viewing SpaceX as a diversified play on space, AI, and national security.
This article is for informational purposes only and does not constitute financial advice.
