SpaceX shares have staged a sharp recovery over the past week, climbing to $138.63 on Monday—its highest level since mid-July and roughly 31% above the year's low. The rebound comes as investors digest the company's latest earnings report and the expiration of the employee lockup period, which had been a source of overhang.
Revenue growth accelerates
The most compelling bull case for SpaceX centers on its accelerating revenue. In the second quarter, total revenue surged 92% year over year to $7.2 billion, helped by the merger with xAI, which brought in X and Grok. Breaking down the segments, space revenue jumped to $962 million from $619 million, connectivity climbed to $4.29 billion from $3.2 billion, and the AI segment contributed over $2.56 billion.
Analysts see this momentum continuing. Consensus estimates compiled by Yahoo Finance project revenue of $44.2 billion this year and $90.2 billion next year. Goldman Sachs, which participated in SpaceX's IPO, goes further, forecasting $474 billion in revenue by 2030. While that number should be treated with caution, the underlying driver—AI infrastructure demand—is real. SpaceX has already signed three major AI deals worth a combined $2.35 billion per month: Anthropic at $1.25 billion, Google at $925 million, and Reflection AI at $150 million.
Spending concerns may be overblown
One reason the stock had pulled back is the sharp increase in capital expenditures. Management reported capex of $18.3 billion in the last quarter, up from $10 billion a year earlier, with AI-related spending alone hitting $15.8 billion. This spending will continue as the company builds out its Terafab facility in Texas.
Heavy investment means free cash flow will likely remain negative in the near term. But as seen with Tesla in its early years, short-term pain can translate into long-term gains if the investments pay off. SpaceX's AI deals provide some visibility into future cash flows, which may justify the elevated spending.
Technical picture improves
On the hourly chart, SPCX formed a double-bottom pattern at $104.80, with a neckline at $126. The stock has moved above the 50-period moving average, and the Relative Strength Index (RSI) is approaching overbought levels. While this could be a dead-cat bounce, the longer-term trend suggests the stock may eventually test its record high of $225.
However, risks remain. The potential merger with Tesla—which has been floated by CEO Elon Musk—could create uncertainty. Additionally, the stock's valuation is stretched, and several analysts have recently downgraded it. Susquehanna, RBC, and Raymond James have all lowered their ratings, with Citigroup moving from buy to sell.
Despite these headwinds, the combination of accelerating revenue, a growing AI backlog, and a technical breakout suggests that the recent rally may have more room to run. Investors should weigh the near-term spending drag against the long-term growth potential.
For more on SpaceX's recent moves, see the lockup expiry analysis and Cathie Wood's buying spree.
This article is for informational purposes only and does not constitute financial advice.
