SpaceX Valuation: Wall Street Reprices the Rocket Maker After Blowout Quarter

The gap between what investors expected and what SpaceX actually delivered last night was wider than most models could accommodate.

Following the release of its third quarter 2026 financial results after the market close on October 20, the company saw a rapid reassessment of its value by Wall Street. The stock, which had closed at $147.79 the previous day, climbed approximately 8 percent in premarket trading on October 21. This movement came as analysts quickly adjusted their outlooks, reflecting a shift in how the market views the company's trajectory across its launch, connectivity, and artificial intelligence segments.

The primary driver of this sentiment shift was a revenue figure that significantly outpaced consensus estimates. SpaceX reported total revenue of $14.6 billion, representing a 161 percent year-over-year increase. Analysts had generally modeled a figure closer to $12.7 billion, so the upside surprise was substantial. Alongside the top-line growth, the company swung from a net loss in the prior year to a net profit of $4.4 billion. Adjusted EBITDA reached $8.8 billion, further underscoring the improved financial position during this period.

The internal composition of that revenue tells a story of rapid diversification, particularly in the company's Super Intelligence division. This AI-focused unit generated roughly $7.6 billion in revenue, a nearly 830 percent increase from the same period last year. It has now become the largest contributor to the company's total income. The Connectivity segment also performed strongly, delivering $5.2 billion in revenue. This was supported by robust subscriber growth, which pushed the Starlink consumer base to 13.6 million users.

However, the most significant catalyst for the higher price targets was not just the past performance, but the forward-looking guidance provided by management. During the earnings call, CEO Elon Musk and CFO Bret Johnsen outlined a first quarter 2027 revenue projection of $33 billion to $37 billion. This range far exceeded the approximately $22 billion that analysts had previously modeled. To support this growth, the company is planning fourth quarter capital expenditures between $35 billion and $40 billion. These funds are primarily earmarked for AI compute infrastructure at sites in Memphis and Southaven.

The scale of this investment suggests an aggressive push to dominate the AI compute market. Management indicated targets of 2.5 to 3 gigawatts of nameplate compute capacity by the end of this year, with pathways to reach 13 gigawatts or more by the end of 2027. Musk noted that demand from hyperscalers and other customers remains relentless. He added that current compute pricing supports payback periods of less than a year, with some scenarios potentially as short as six months. These metrics have led analysts to view the heavy spending as a driver of future earnings power rather than a burden.

The reaction from major investment firms has been swift and largely uniform in direction. JPMorgan more than doubled its price target to $500 from $240, maintaining an Overweight rating. Cantor Fitzgerald raised its target to $345 from $246, while Barclays increased its outlook to $300 from $254. Other firms followed suit: Citi moved its target to $240 from $200, UBS adjusted its target to $230 from $210, and TD Cowen raised its estimate to $224 from $200. Morgan Stanley held an Overweight rating with a $300 target. Additional adjustments came from Wells Fargo, which raised its target to $274 from $214, and Clear Street, which moved its target to $248 from $217.

Beyond the numbers, the earnings call highlighted several strategic developments that contributed to the bullish mood. These included recent orbital successes for Starship and the deployment of V3 satellites. There is also growing momentum in Starlink enterprise pricing and rapid adoption of the Grok Bot. Management discussed spectrum expansion plans and the formation of special committees to explore a possible combination with Tesla. These factors, combined with the financial results, have led to a broad consensus that SpaceX's long-term growth profile has strengthened, even as the level of capital expenditure remains a point of close scrutiny.