Erste Group initiates SpaceX stock with hold on AI growth outlook

Erste Group has initiated coverage on SpaceX with a Hold rating, projecting annualized revenue of $100 billion by the end of 2026. This growth is anticipated to be driven by cloud service agreements with AI providers like Anthropic and Alphabet. Currently, SpaceX's revenue stands at $23 billion annually. The AI division is expected to generate the majority of revenue by 2026, with losses in the aerospace and AI sectors to be offset by the profitable Starlink segment.

The stock currently trades at a high EV/EBITDA multiple of 375.53, reflecting the expectation of breakeven for the AI division in the near term and a significant rise in operating margins thereafter. SpaceX's growth strategy focuses on expanding its cloud services business with AI companies while maintaining profits from its satellite internet operations.

Recent developments include the successful completion of Starship Launch 14, with the second stage reaching orbit for the first time, and the ongoing progress in SpaceX's Starship program. Analysts from Mizuho, Bernstein, and BofA Securities have reiterated positive outlooks on SpaceX, setting price targets between $200 and $235.

Needham maintains a Buy rating with a $250 price target, citing the timing of AI compute deals, expected to ramp up in the fourth quarter of 2026.