Needham reiterates SpaceX stock rating on AI compute deal timing
Needham reaffirmed its Buy rating and $250 price target for SpaceX (NASDAQ:SPCX) following conversations with the company’s investor relations team about AI compute contracts. The stock is currently priced at $149.24, with targets ranging from $140 to $450 across analysts. Needham confirmed the schedule for the AI compute deals, noting that the majority are anticipated to ramp up in the fourth quarter of 2026, with one deal set to commence in December.
These deals are expected to contribute to a combined annualized revenue run rate of around $54 billion, which supports management’s goal of attaining a total company annual recurring revenue of approximately $100 billion by the conclusion of 2026. This represents a substantial increase from the company’s present revenue of $23 billion over the past year, with analysts projecting a 144% revenue growth for fiscal 2026.
According to InvestingPro analysis, SPCX appears to be overvalued relative to its estimated Fair Value. Needham has revised its AI revenue projections for the second half of 2026 and all of 2027 to better reflect the slower pace of deal contributions due to renewals and in line with consensus estimates. Meanwhile, SpaceX made significant progress with its Starship program, achieving a successful orbital flight of the upper stage during Starship Launch 14 on September 28, deploying 26 Starlink V3 satellites and conducting a controlled splashdown in the Pacific Ocean.
Other firms, such as Bernstein and Mizuho, have also maintained a positive outlook on SpaceX, reiterating Outperform ratings with price targets of $248.00 and $200.00, respectively. BofA Securities and UBS have both reiterated Buy ratings, with price targets of $235.00 and $210.00, respectively. UBS highlights the company’s Starship launches, cloud computing deals, and AI product adoption in its analysis, projecting third-quarter revenues of $13.8 billion, surpassing analysts' estimates, and expecting adjusted EBITDA of $7.5 billion.
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