• Barclays (BCS) raised its SpaceX (SPCX) price target to $300 from $254, maintaining an Overweight rating, following stronger-than-expected Q3 results.
  • The new target implies roughly 103% upside from the prior close, though it is not a guaranteed return.
  • SpaceX's AI and cloud segment now generates more revenue than either satellite connectivity or launches, with Starlink still the primary source of operating profit.

Barclays Boosts SpaceX Price Target on AI Confidence

Barclays analyst Anthony Valentini raised his price target on SpaceX (Nasdaq: SPCX) to $300 from $254 on October 21, maintaining an Overweight rating. The 18.1% increase reflects greater confidence in AI revenue growth and deployment execution, according to a note to clients. The new target implies roughly 103% upside from the stock's previous close, though that is not a guaranteed return.

The revision comes after SpaceX reported third-quarter results that beat analyst expectations on both revenue and earnings. The company posted revenue of $14.58 billion, up 161% year over year, versus the $12.72 billion consensus estimate from LSEG (LSEG.L). Adjusted earnings per share came in at $0.45, compared with expectations of $0.13. Operating income was approximately $2.8 billion, and net income reached $4.4 billion.

AI Segment Drives Growth

A key takeaway from the quarter was the performance of SpaceX's AI and 'Super Intelligence' segment, which generated $7.56 billion in revenue, up nearly ninefold year over year, and $431 million in operating income. This marked the first time AI and cloud computing brought in more revenue than either satellite connectivity or launch services. Starlink connectivity revenue rose 69% to $5.25 billion, with operating income of about $2.37 billion, as consumer subscribers climbed to 13.6 million from 12 million in the prior quarter. The space and launches segment contributed $1.77 billion in revenue but posted a $7 million operating loss.

Despite the strong top-line growth, capital expenditures remained hefty at $19.6 billion, with more than $16.4 billion committed to AI infrastructure. That spending requirement is a major counterweight to the growth story, and investors have previously balked at SpaceX's cash burn. The company's first post-IPO earnings report disclosed $18.4 billion in quarterly capex, which unsettled investors and contributed to a share-price decline.

Merger Talks and Regulatory Developments

The central development in SpaceX's transformation has been its expansion beyond rockets and satellites. The company combined with xAI in February and completed its $60 billion acquisition of coding platform Cursor during the third quarter. Those moves have positioned SpaceX as a major player in AI computing infrastructure.

Meanwhile, potential merger discussions with Tesla (TSLA) have added another catalyst—and governance risk. CEO Elon Musk said the two companies formed independent-director committees to discuss a possible combination, and he described himself as conflicted and excluded from those discussions. The talks are exploratory and not an agreed transaction.

On the regulatory front, SpaceX received FCC approval for a 15,000-satellite constellation and announced it was buying low-band spectrum, supporting plans to expand into mobile connectivity and potentially compete with established U.S. carriers. However, the company also faces a federal lawsuit from the NAACP alleging Clean Air Act violations at its Memphis-area AI operations. A federal court recently rejected the Justice Department's attempt to dismiss the case, though the procedural ruling does not establish that SpaceX violated the law.

Analyst Community Responds

Barclays' move is part of a broader wave of target increases following the earnings release. JPMorgan (JPM) raised its target to $500 from $240, while Cantor Fitzgerald lifted its to $345 from $246. Morgan Stanley (MS) maintained its $300 target, and Citi (C) and UBS (UBS) both raised their targets to $240 and $230, respectively. HSBC (HSBC), however, kept a Hold rating with a $150 target, citing limited historical data and guidance. The wide dispersion in targets—from $150 to $500—highlights the differing views on SpaceX's long-term potential.

CFO Bret Johnsen provided bullish guidance, forecasting first-quarter 2027 revenue of $33 billion to $37 billion, well above the $22.2 billion analyst estimate at the time. Management also targets volume production at its planned Texas Terafab chip facility in the third quarter of 2028. Those are management projections and not established outcomes.

What to Watch

Near-term catalysts include new cloud contracts, delivery against raised revenue expectations, and developments in the Tesla merger discussions. Citi highlighted Starship Flight 15 as a potentially important step toward rapid reusability. Longer term, the bull case rests on the flywheel between launch capability, satellite communications, AI computing, and chip development. However, the gap between ambition and demonstrated delivery remains wide. Musk has projected a $500 billion to $1 trillion annual recurring revenue run rate by the end of 2027—a figure that is not the same as revenue earned during that year, which analysts currently peg at around $110 billion. Infrastructure execution, financing costs, and environmental litigation remain material uncertainties.

Correction: An earlier version of this article misstated the percentage increase in Barclays' price target. It is 18.1%, not 18.5%.