Oppenheimer has become the first global brokerage to initiate coverage of SpaceX, issuing an outperform rating and a $190 price target ahead of its $75 billion IPO. The brokerage sees the company as the only vertically-integrated AI firm with massive growth potential from Starlink and xAI.
Oppenheimer has become the first global brokerage to initiate coverage of SpaceX, issuing an outperform rating and a price target of $190, implying an upside of nearly 41% from the company's IPO price of $135. The highly anticipated market debut is expected to value SpaceX at $75 billion.
Key Points
- Oppenheimer sets $190 price target, 41% above IPO price of $135
- SpaceX aims for $1.75 trillion valuation at debut
- Starlink seen as main cash generator; AI business (xAI) to become largest contributor
- Potential market worth $10 trillion by 2035 identified
According to Oppenheimer analyst Timothy Horan, SpaceX is the only vertically-integrated AI company with the required capital, data, LLMs, hardware, manufacturing, and engineering talent. The brokerage expects the company to achieve a market capitalization of about $2.5 trillion in the next 12-18 months, driven by its Starlink satellite internet service and AI ventures including xAI.
Earlier this month, Morningstar analysts pegged SpaceX's valuation at $780 billion, less than half of the $1.75 trillion target reportedly set by the Elon Musk-led company. Horan noted that SpaceX's long-term strategy hinges on deploying low-cost, large-scale infrastructure, including orbital data centers and satellite networks, addressing a potential market worth $10 trillion by 2035.
Horan also mentioned that an eventual merger with Tesla is plausible, but believes both companies will remain a quasi-vertically integrated ecosystem to maintain access to capital. The IPO is underwritten by J.P. Morgan, Goldman Sachs, and Morgan Stanley, among others. Horan expects an initial demand/supply imbalance on SpaceX shares given broad retail demand and accelerated index inclusion following the market debut.