- Deutsche Bank says $100 billion revenue run-rate target is “likely very achievable,” while analysts warn valuation remains tied to Starship milestones
Shares of Elon Musk’s SpaceX rebounded on Monday, moving back toward their $135 initial public offering price as investors digested stronger-than-expected quarterly revenue and bullish forecasts for the company’s Starlink and artificial-intelligence businesses.
The stock briefly reached the $135 benchmark in early trading, marking a recovery from a volatile post-IPO period in which shares fell as low as $108.27 only days earlier. The rebound comes after SpaceX’s first earnings report since its historic Nasdaq debut in June gave investors an early look at the financial performance underpinning the company’s lofty valuation.
SpaceX reported second-quarter revenue of $7.81 billion, well above the $6.93 billion analysts had expected. The result provided an early indication that the company’s rapidly expanding satellite communications operation and emerging AI businesses are generating substantial commercial momentum.
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The company has also set an ambitious target of reaching $100 billion in annualized recurring revenue by the end of the year. Chief Financial Officer Bret Johnsen reiterated the target during last week’s earnings call.
Deutsche Bank analysts said Monday that the goal is “likely very achievable”, although SpaceX’s second-quarter revenue run-rate was only about $31 billion.
The gap between the current run-rate and the year-end target highlights the scale of the growth SpaceX is projecting. Deutsche Bank expects much of the increase to come from its neocloud business and the acquisition of artificial-intelligence coding company Cursor.
The forecast also underpins how rapidly SpaceX’s investment case is expanding beyond its traditional rocket-launch and satellite-internet businesses. Starlink remains a major source of revenue, but Musk is increasingly positioning SpaceX as an AI infrastructure company with large-scale computing capacity and data-center operations.
Lockup Expiry Adds Volatility
The share rebound comes after a major test for the stock market debut. SpaceX’s first post-IPO lockup period expired last Thursday, making more than 911 million shares available for trading by early investors. That amount is substantially larger than the 639 million shares sold in the IPO itself.
The release of such a large pool of previously restricted shares raised concerns that early investors could lock in gains or reduce their holdings, increasing selling pressure and volatility.
The potential supply of additional shares had already contributed to a more cautious trading environment. Ahead of the earnings release and lockup expiry, notional short interest in SpaceX surpassed that of Tesla, Musk’s electric-vehicle company and one of the most heavily shorted stocks on Wall Street.
The fact that SpaceX shares have recovered toward the IPO price despite the additional supply suggests that investors are focusing increasingly on the company’s operating performance and future growth opportunities rather than simply the technical effects of the lockup expiration.
Several analysts maintained a constructive view following the earnings report.
Citi analysts said Sunday they had raised their 2026 and 2027 forecasts after incorporating the sources of SpaceX’s second-quarter earnings beat. The bank reiterated its buy rating.
“Given the dependency of out-year forecasts/valuation on successful Starship milestones, we leave our PT unchanged at $200 and plan to adjust our target ratably toward the $900+ long term valuation level we outlined in our initiation as major milestones are hit,” Citi analysts wrote in a Sunday note.
That assessment highlights the central risk embedded in SpaceX’s valuation. Much of the company’s longer-term upside depends not simply on the continued expansion of Starlink or AI computing, but on the successful development and deployment of Starship, its next-generation reusable spacecraft.
Starship is expected to play a central role in SpaceX’s plans to deploy larger numbers of next-generation Starlink satellites and expand the company’s capabilities in space. Successful milestones could therefore strengthen the investment case across several parts of the business simultaneously.
Failure or prolonged delays, however, could have the opposite effect by raising costs, delaying projected revenue streams and forcing investors to reassess the valuation attached to SpaceX’s longer-term ambitions.
Caution Remains over Ambitious Targets
Wolfe Research also acknowledged the strength of SpaceX’s second-quarter performance while warning investors against treating management’s longer-term ambitions as guaranteed outcomes.
“There was a lot to like in SpaceX’s first earnings report but as always we would advise not misunderstanding aspirations of mgmt from most likely outcomes,” Wolfe analysts wrote Sunday.
That distinction has become relevant given the enormous capital requirements behind SpaceX’s expansion.
The company is simultaneously scaling Starlink, developing next-generation spacecraft, building AI computing infrastructure and expanding into businesses that require substantial upfront investment. But analysts have noted that the ability to convert those investments into recurring revenue and sustainable cash flow will be critical to justifying the company’s valuation over time.
For now, the earnings report has given SpaceX bulls additional evidence that the underlying businesses are growing rapidly. The immediate share-price recovery toward $135 suggests investors are willing to look beyond the stock’s volatile debut and focus on the company’s expanding revenue base.
Industry analysts believe the next test will be whether SpaceX can turn its ambitious $100 billion revenue run-rate target into measurable results while delivering the Starship milestones on which much of its longer-term valuation depends.