• Bernstein raises SpaceX price target to $268 from $248, maintaining Outperform rating.
  • The upgrade hinges on a sharp increase in terrestrial AI-computing capacity forecasts, not just rockets or satellites.
  • New target implies 81.7% upside from the October 23 close of $147.49, but risks remain around heavy capex and financing.

Bernstein analyst Douglas Harned lifted his price target on Space Exploration Technologies Corp. (Nasdaq: SPCX) to $268 from $248 on Monday, keeping an Outperform rating, as he significantly raised forecasts for the company’s terrestrial AI-computing business. The new target, an 8.1% increase, implies roughly 81.7% upside from the October 23 closing price of $147.49. The revision comes ahead of the U.S. regular-session open, with futures pointing to a modestly higher start for technology shares.

AI Infrastructure Takes Center Stage

The main driver is not SpaceX’s launch or satellite operations but its fast-growing AI infrastructure segment. Bernstein now models 13 gigawatts of terrestrial computing capacity by the end of 2027, up from 8 gigawatts, and 20 gigawatts in 2028. The firm also raised its 2028 full-year revenue forecast to $424 billion and assumes approximately $35 billion of capital expenditure per gigawatt. “The enterprise and government connectivity demand we’re seeing is stronger than we anticipated,” Harned wrote, according to people familiar with the report. He also cited planned initial orbital-data-center launches in late 2027, with operations beginning in mid-2028—plans that remain prospective.

The upbeat view was reinforced over the weekend when Elon Musk said SpaceX had closed $40 billion in debt financing, primarily to fund GPUs expected to arrive in the first and second quarters of 2027. The financing supports the capacity-expansion narrative but also increases exposure to borrowing costs and the returns ultimately earned on expensive computing equipment. Musk’s announcement did not disclose complete loan terms, and SpaceX did not respond to a request for comment.

A Transformation in Progress

Founded in 2002, SpaceX now combines reusable rockets and spacecraft, Starlink communications, and AI infrastructure and software. Its products include Falcon launch vehicles, Dragon, the developing Starship system, Starlink broadband, and—following its xAI acquisition—Grok and X. Market data put its equity value at roughly $2 trillion at the latest close.

The company’s third-quarter results, announced October 20, underscored how far that transformation has progressed. Revenue jumped 161% year over year to $14.6 billion, while net income swung to $4.4 billion from a $1.1 billion loss a year earlier. Operating income was $2.8 billion, and adjusted EBITDA rose 306% to $8.8 billion. AI and “Super Intelligence” revenue reached approximately $7.6 billion, now the largest segment, while connectivity revenue rose 69% to $5.2 billion. Starlink consumer subscribers totaled 13.6 million, up from 12 million at the end of the second quarter. Capital expenditure was $19.6 billion, including $16.4 billion for AI.

The important distinction is between profitability and funding needs. Although SpaceX reported a substantial accounting profit, quarterly capital expenditure exceeded revenue. Management’s Q4 capital-spending guidance of $35 billion–$40 billion makes financing access and eventual cash returns central to the investment case. Adjusted EBITDA should not be treated as free cash flow.

Risks and Divergent Views

Bernstein is not alone in turning more optimistic after the third-quarter results. BofA (BAC) has a $275 target, Pivotal Research $260, and TD Cowen (TD) $224. But views differ sharply: Daiwa (8601.T) maintained a Neutral rating with a $140 target, while Raymond James (RJF) retained an $800 target. Those divergent valuations show how sensitive the investment case is to long-range assumptions.

Beyond financing, SpaceX faces regulatory and environmental hurdles. The FCC in October authorized a 15,000-satellite next-generation Starlink Mobile constellation, but the company’s planned acquisition of 800 MHz spectrum licenses remains subject to FCC approval. Environmental permitting is another issue: an organization’s court challenge alleges that turbines supporting SpaceX’s data-center expansion operate illegally and pollute nearby Black neighborhoods—allegations that are under dispute and not established findings. These illustrate potential legal and community constraints on rapid capacity expansion.

For now, the bull case rests on converting massive computing investments into sustained revenue. Bernstein’s $424 billion 2028 revenue forecast is exceptionally ambitious relative to the approximately $32 billion in trailing-12-month revenue cited in the same report. Management’s separate $500 billion–$1 trillion revenue ambition “exiting 2027” uses a different time basis and should not be treated as directly comparable full-year guidance.

The central uncertainty is therefore not whether SpaceX is growing quickly—it is—but whether demand, pricing, power availability and financing can support expansion at the scale assumed in bullish valuations. The $268 target expresses Bernstein’s confidence in that outcome; the company’s spending commitments and the wide dispersion of analyst targets show why execution risk remains substantial.

Correction: An earlier version of this article misstated the implied upside from the October 23 close. It is 81.7%, not 82.1%.