SpaceX shares have retreated sharply in recent sessions, sliding from an October high of $176.55 to around $146, their lowest level since mid-September. The pullback comes just ahead of the company's third-quarter earnings report, scheduled for Tuesday, which will test whether the recent weakness is a buying opportunity or the start of a deeper correction.
The stock's decline of more than 16% from its peak reflects growing investor caution about near-term headwinds, even as the company's long-term growth narrative remains intact. The upcoming results will provide a clearer picture of revenue momentum, capital expenditure, and the trajectory of its key business segments.
Revenue growth expected to continue
Analysts project that SpaceX's third-quarter revenue will land between $13 billion and $15.1 billion, driven largely by its artificial intelligence and Starlink operations. In the second quarter, the company reported a 92% year-over-year revenue surge to $7.8 billion, with its space business contributing $962 million, connectivity and AI revenues reaching $4.29 billion and $2.56 billion, respectively.
The AI segment has been a major growth engine, with contracted sales exceeding $14 billion in the last reported quarter. That backlog likely expanded in Q3, supported by large orders from companies such as Google, Anthropic, and Reflection AI. Investors will be watching for updates on these contracts and any new customer wins.
Capital spending and the $40 billion raise
Capital expenditures have risen sharply, jumping to $18.3 billion in the most recent quarter from $10 billion a year earlier. Management has indicated that spending will continue to climb as the company expands its data center infrastructure. A planned $40 billion capital raise, intended to fund purchases of Nvidia chips, is also on the agenda, and the earnings call may offer details on timing and terms.
Free cash flow will be another key metric to watch, as heavy investment could pressure near-term profitability even as revenue grows. The company's ability to balance growth spending with cash generation will be a focal point for analysts.
Analyst sentiment remains bullish
Despite the recent stock slide, Wall Street remains highly optimistic. The average analyst price target stands at $224, implying roughly 51% upside from current levels. Notable targets include $275 from Evercore ISI's Kutgun Maral, $230 from Pivotal Research's Jeffrey Wlodarczak, and $280 from Oppenheimer. William Blair has reiterated an outperform rating.
Long-term projections are even more striking. Goldman Sachs estimates SpaceX's revenue could reach $474 billion by 2030, while Morgan Stanley sees the figure climbing to over $3.3 trillion by 2040. These forecasts rest on the assumption that the company's AI, Starlink, and space launch businesses will continue to scale rapidly.
Catalysts beyond earnings
Beyond the quarterly numbers, SpaceX has several potential catalysts. Its Grok AI chatbot could emerge as a competitor to Anthropic and OpenAI, and its AI data center business may disrupt established players like CoreWeave and Nebius. The space launch segment is also poised for growth as satellite deployment accelerates globally.
However, the stock's recent weakness suggests some investors are questioning whether the valuation already reflects these opportunities. The muted reaction to the last earnings report—shares rose less than 3%—adds to the uncertainty.
Options market points to a quiet reaction
The options market is pricing in a relatively subdued post-earnings move. Implied volatility stands at 48%, slightly below historical volatility of 49%. Most call activity is concentrated at the $150 strike, just above the current price, while put interest is heaviest at $140. This positioning implies traders expect the stock to stay within a narrow range after the report.
If the company delivers strong results and upbeat guidance, the stock could rebound toward the $150–$160 zone. Conversely, any disappointment on margins, capex, or AI contract momentum could push it lower, with $140 as the first support level.
This article is for informational purposes only and does not constitute financial advice.
