Space Exploration Technologies, commonly known as SpaceX, is experiencing a resurgence in its stock price, rising 10% in early trading after a challenging period. Argus Research has raised its investment opinion on SpaceX, maintaining a 12-month price target of $160, which suggests a 39% upside from its recent closing price.
Analyst Steve Silver highlighted that while capital expenditures have surged to over $18 billion, primarily for AI infrastructure, the rapid payback from these investments is promising due to the growth in computing capacity. Following its IPO at $135 a share, SpaceX's stock initially soared but faced a significant decline, dropping 37% in July and 14% after its first earnings report.
Despite these fluctuations, Argus believes that the company's operational performance and growth outlook justify a 'buy' rating. However, the looming expiration of lockup periods for over 300 million shares could lead to increased volatility and selling pressure.
Nevertheless, Argus encourages investors to view potential pullbacks as buying opportunities, citing the strong fundamentals and the historical performance of CEO Elon Musk's other ventures, particularly Tesla. Overall, the consensus among analysts remains positive, with 28 out of 36 recommending the stock as a buy or strong buy