Morningstar

SpaceX Earnings: We Raise Fair Value Estimate on Strong AI Growth

We still think SpaceX stock is significantly overvalued.

A general view of the SpaceX logo on a sign.
Joan Cros/NurPhoto via Getty
Securities in This Article
Space Exploration Technologies Corp Class A
(SPCX)

Key Morningstar Metrics for SpaceX

  • Fair Value Estimate
    : $70
  • Morningstar Rating
    : ★
  • Morningstar Economic Moat Rating
    : Narrow
  • Morningstar Uncertainty Rating
    : Very High

What We Thought of SpaceX’s Earnings

SpaceX’s SPCX third-quarter revenue grew 161% since 2025 to $14.6 billion, led by sequential quintupling of AI revenue driven by neocloud rentals. Starlink rose 69.5% and contributed $2.4 billion in operating profit, followed by $431 million operating income from AI and the launch business breaking even.

Why it matters: Notwithstanding its sizable market opportunity for rapid, profitable growth in Starlink, the widest range of potential outcomes for SpaceX’s future lie in its artificial intelligence ventures, which are currently predicated on rapidly deploying computing capacity and renting it out.

  • SpaceX’s rapid buildout of AI computing capacity and ability to rent it out at favorable rates is a success story. However, we do not think it likely that demand will outstrip supply forever, especially the more capacity is deployed.
  • In our forecasts, we investigated a few possible long-term payoff profiles of heavy investments in AI infrastructure, mirroring questions and uncertainty investors have grappled with in recent months and weeks that drove volatility in AI-related shares.

The bottom line: We raised our fair value estimate for narrow-moat SpaceX to $70 per share from $62, reflecting its increased near-term success in scaling terrestrial data centers, offset by a reappraisal of the long-term returns of AI services on the hefty investments required to deploy them.

  • We see SpaceX’s shares as overvalued: They traded at around twice our fair value estimate after hours on Oct. 20.

Coming up: We weren’t surprised to hear that SpaceX and Tesla have formed board committees to explore a possible business combination. We think a deal could simplify the firms working together on many projects, but it depends on terms satisfactory to a majority of Tesla shareholders.

  • We don’t think the combination is inevitable, but would judge it highly likely to take place, especially the longer SpaceX stock remains richly priced.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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