Is SpaceX a Good Investment? The $2 Trillion Question Wall Street Can’t Stop Arguing About
It was clear that you were purchasing a rocket company when SpaceX went public earlier this year at a price of $135 per share. The pitch included reusable boosters, Starship, and Starlink satellites suspended in low Earth orbit. In the months that have passed, it has become evident that SpaceX is now primarily an artificial intelligence company in terms of both revenue and market perception. The investment question is significantly altered by that change.
SpaceX’s super intelligence division, which includes the Grok AI model and AI computing infrastructure, brought in $7.6 billion during the third quarter of 2026. That same segment generated $813 million a year prior. It’s not a rounding error. To put things in perspective, the company’s total quarterly revenue of $14.6 billion exceeded analyst projections by $1.6 billion. Due to SpaceX’s aggressive spending to develop the infrastructure that underpins those figures, free cash flow is extremely negative—negative $35 billion through the first nine months of the year.
Data centers, plans to eventually move computing infrastructure into space, with solar-powered satellite data centers targeted as early as 2028, and Nvidia GB300 chips coming online at about 200,000 per month. Last quarter, the super intelligence segment alone spent $16.4 billion on capital expenditures. That exceeds the company’s overall earnings for the time frame.
The autumn has been difficult for the stock. It dropped about 34% after hitting a 52-week high above $225, and it is currently trading at about $136, which is essentially where it was when it went public. That decline is similar to what happened to tech stocks related to AI in general in October, and it has prompted the age-old question: is this a chance to buy, or is the stock still pricey after the drop?
Almost all of it depends on the analyst you consult. Even after the correction, Morningstar’s fair value estimate of $70 per share suggests the stock is still greatly overpriced. Even though their model predicts $228 billion in revenue by 2030—roughly 5.5 times their 2026 estimate—they still come to the conclusion that the current price is not justified. They contend that SpaceX would have to almost double what Morningstar is already projecting as aggressive growth in order to reach fair value at current levels. It’s a high standard.
Bullish analysts, on the other hand, point to the trajectory and contend that the market is pricing in the possibility that Elon Musk’s declared revenue targets are more realistic than they seem, which Morningstar’s model may be underweighting. By the end of 2027, Musk hopes to generate between $500 billion and $1 trillion in recurring revenue annually. The company estimates that there is a $2.4 trillion market opportunity for AI infrastructure. The Wall Street consensus for 2028 revenue is $335 billion, which would put the stock at roughly six times forward sales at the current price. This is high, but not unreasonable for a business growing at this rate.
Musk’s history with deadlines and forecasts is noteworthy. The New York Times examined over 600 public statements he had made about his businesses and discovered that the majority were either hard to confirm or, when they did come true, they were sometimes years late. This does not imply that the vision is flawed. It does imply that investors who purchase SpaceX at a $2 trillion market value are placing a sizable wager on the company’s execution speed rather than just its concept.
Reading through the analyst notes, Reddit threads, and quarterly reports gives me the impression that no one is entirely sure how to value this company using conventional tools, which is both intriguing and dangerous. SpaceX is not a utility that pays out dividends consistently. In fifteen years, this company might be developing the infrastructure layer that powers everything else, or it might find itself in a much more challenging situation if the demand for AI infrastructure declines or rivals close the gap. Both situations are conceivable. The stock moves as it does because it is aware of this.
The growth case is real for a long-term investor who has a real ten-year horizon and a volatility tolerance. This stock, at any price, is probably not the best choice for someone who needs clarity on short-term fundamentals or can’t handle a stock that could swing 20% in a month.
