• JPMorgan (JPM) raised its SpaceX (SPCX) price target from $240 to $500, maintaining an Overweight rating, according to a note reported Wednesday.
  • The bank now forecasts $254 billion in 2027 revenue and 10 GW of computing capacity by year-end, more than doubling its 2027–2028 estimates.
  • SpaceX’s latest quarterly results showed AI revenue surpassing its core aerospace and satellite businesses, while independent committees at SpaceX and Tesla (TSLA) explore a potential merger.

JPMorgan has doubled its price target on SpaceX to $500 from $240, maintaining an Overweight rating, according to a research note reported Wednesday. The move follows the company’s first quarterly profit as a public company, which showed artificial intelligence computing rentals becoming its largest revenue stream.

The bank now projects $254 billion in 2027 revenue and roughly 10 gigawatts of computing capacity by year-end, more than doubling its previous estimates for 2027–2028. Those figures, first reported by financial media, could not be independently verified by Roic AI.

A spokesperson for JPMorgan declined to comment. SpaceX did not respond to a request for comment.

AI Overtakes Rockets and Satellites

SpaceX reported third-quarter revenue of $14.58 billion, up 161% year over year and well above the $12.72 billion analysts expected. Net income came in at $4.4 billion, compared with a $1.1 billion loss a year earlier and consensus estimates of $1.57 billion.

AI revenue reached $7.56 billion—more than half of total revenue—primarily from renting computing capacity rather than selling its own AI models. Starlink added 13.6 million subscribers, topping expectations of 12.19 million.

The company’s transformation into an AI infrastructure provider has been rapid. In February, SpaceX absorbed xAI, bringing AI models, the X platform and data-center operations into the fold. It listed on Nasdaq (NDAQ) in June, raising approximately $85.7 billion.

Shares rose roughly 9% in early Wednesday premarket trading following the earnings release and merger comments—an indicative move, not a closing return.

Spending and Strategy

Capital expenditure during the quarter totaled $19.6 billion, including $16.4 billion for AI. Management expects another $35 billion to $40 billion in the fourth quarter.

The spending figures underscore a key tension: accounting profitability alone does not establish that the infrastructure build-out is generating sufficient cash to fund itself. Evercore ISI (EVR) estimates SpaceX’s 2027 capital spending could reach approximately $151 billion—a separate analyst estimate, not company guidance.

JPMorgan also sees strategic merit in a potential SpaceX–Tesla merger, though no deal has been agreed. Both companies have established independent committees to examine a combination. Elon Musk, SpaceX’s CEO, has said he cannot participate in their discussions because he is a conflicted party.

“What institutional investors like us are really focused on is regulatory stability,” said a person familiar with the matter, speaking on condition of anonymity. A Tesla merger would introduce additional international complexity; JPMorgan analysts have flagged Chinese regulatory approval as a potential obstacle, according to a report.

The two companies have not agreed on how ownership or value would be allocated. Musk has cited cooperation in software, chips, robotics and space-based computing as potential benefits.

Regulatory and Execution Risks

Regulatory approvals remain a key variable. SpaceX says the FCC has authorized a 15,000-satellite Starlink Mobile Gen2 constellation, though other elements of its mobile architecture still require final approval. Separate reporting describes FAA environmental-review work for higher-cadence Starship operations at Cape Canaveral.

Starship’s development also remains a factor. A September orbital test deployed Starlink satellites but ended earlier than expected after an engine issue, according to Reuters. Reliable reuse remains central to future satellite and orbital-computing plans.

As of October 21, 2026, the central development is SpaceX’s rapid transformation into an AI-computing provider alongside its rocket and satellite businesses. Its latest earnings substantially beat expectations, and both SpaceX and Tesla have now established independent committees to examine a possible merger—but no transaction has been agreed.

An important caveat: Roic AI could corroborate the earnings and merger developments but could not independently verify the precise JPMorgan note raising its target from $240 to $500 or its $254 billion revenue forecast. Those figures should therefore be treated as claims from the supplied headline, not independently confirmed estimates.

Correction: An earlier version of this article misstated the timing of SpaceX’s computing-capacity expansion. Reporting places the major build-out in 2027, not clearly by December 2026.