Key Highlights
- SPCX shares plummeted to a record closing low of $123.99 on Friday, representing a 40% decline from the $201.80 peak achieved on June 16
- The aerospace company is negotiating with the Defense Department for an AI computing infrastructure agreement
- Comparable contracts with Anthropic and Google are expected to deliver approximately $26 billion in yearly revenue at full capacity
- Piper Sandler elevated SPCX to “hold” status; Street consensus reflects “Moderate Buy” with analysts targeting $234.78 on average
- The company disclosed a quarterly deficit of $1.27 per share against $4.69 billion in total revenue in its latest financial results
SPCX shares showed signs of recovery in Monday’s premarket session, climbing 1.2% to $125.53 as traders looked to break a six-session decline that drove shares to their lowest-ever close of $123.99 on Friday — notably beneath the company’s $135 initial public offering price.
Space Exploration Technologies Corp., SPCX
The driving force behind the uptick: Reports emerged Friday from The Wall Street Journal indicating that SpaceX is negotiating with the Defense Department for an AI computing infrastructure partnership. Should the arrangement come to fruition, it would follow the template of existing agreements with Anthropic and Google, both projected to yield approximately $26 billion in combined annual revenue when operating at maximum capacity.
SpaceX has not issued a statement regarding the Defense Department discussions.
The organization’s AI computing operations revolve around its Colossus I and II facilities located in Memphis, Tennessee, infrastructure that became part of SpaceX following the February integration with xAI. Beyond current operations, the company envisions establishing AI computing centers in space, utilizing solar power generation.
The space-based strategy depends heavily on Starship, SpaceX’s revolutionary fully reusable launch system engineered to dramatically reduce orbital access costs from thousands of dollars per kilogram down to mere hundreds. However, Starship encountered difficulties recently when the 13th demonstration flight was postponed following engine ignition failures. The mission has been rescheduled for June 23.
Flight Test 13 Mission Parameters
During the upcoming rescheduled launch, the booster must accomplish several critical milestones: successful liftoff, stage separation maneuver, boostback burn sequence, and controlled landing in the Gulf of America. Meanwhile, Starship’s upper stage will work to release 20 Starlink V3 satellites into orbit and execute a mid-flight reignition of one Raptor engine before completing its journey with a controlled ocean landing in the Indian Ocean.
Market participants are monitoring developments carefully. Shares have tumbled nearly 40% from the peak of $201.80 recorded on June 16.
Wall Street Analyst Perspectives
Piper Sandler revised its SPCX rating to “hold” on July 17. Overall analyst sentiment leans positive: four analysts recommend Strong Buy, 24 suggest Buy, eight advise Hold, and a single analyst rates it Sell.
Recent coverage launches include Susquehanna establishing a Neutral stance with a $170 price objective, Wedbush initiating at Outperform with a $190 forecast, TD Cowen starting coverage at Buy, Needham elevating its projection from $200 to $250 while maintaining Buy, and Royal Bank of Canada commencing at Outperform with a $225 valuation.
The Street’s average price objective stands at $234.78, significantly exceeding present market values.
Regarding financial performance, SpaceX disclosed a deficit of $1.27 per share alongside revenue totaling $4.69 billion for its latest reporting period on May 7.
Multiple institutional investment firms established fresh positions in SpaceX throughout the second quarter, among them Atwood & Palmer, Marquette Asset Management, and Burkett Financial Services, although these holdings remained modest in size.
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