Analyst Cuts SpaceX Stock Price Target to $140 Amid AI Spending Jitters

The SpaceX stock (SPCX) price has continued to stay in the red, falling more than 11% in the pre-market trading session today. The dip comes despite the firm reporting its first earnings results, which exceed Wall Street estimates, sparking discussions among traders.

Notably, it seems that the investors’ concerns stem from the huge AI spending plans of Elon Musk’s space technology firm. In addition, a renowned analyst has also cut its price target for the SPCX stock, which has further weighed on the market sentiment.

Analyst Cuts SpaceX Stock Price Target Despite Strong Earnings

SpaceX entered the spotlight after posting its first earnings report as a listed company. The company has reported quarterly revenue of $7.8 billion, marking a surge of 92% from the same period last year.

In addition, it also exceeds the Wall Street estimates of $6.82 billion. However, investors quickly shifted their attention from revenue growth to the company’s aggressive investment strategy.

Meanwhile, Piper Sandler reduced its price target for SpaceX stock to $140 from $156 while maintaining a “Neutral” rating. The brokerage acknowledged that earnings exceeded forecasts and even raised its profit estimates.

However, it still believes several challenges could limit upside in the near term. According to the firm’s assessment, the expected 140% increase in tradable shares could create additional selling pressure.

It also flagged projected fiscal 2027 capital expenditure of around $65 billion as higher than anticipated. Another concern involves the long-term stability of AI cloud computing contracts, which remain an important growth driver for the company.

AI Spending Fuels Concern

While SpaceX impressed with top-line growth, its stock price slipped significantly as spending figures raised fresh questions. Total expenditure surged to $18.3 billion during the quarter, most of which was linked to AI-related investments.

SpaceX (SPCX) also revealed that AI-related capital spending reached $15.8 billion during the quarter. Those investments include expanding data center capacity and purchasing advanced Nvidia chips to support AI infrastructure.

Although AI revenue more than tripled from the previous year, investors appeared unconvinced that current returns justify the pace of spending. Many remain concerned about whether SpaceX’s profitable Starlink business can continue funding such massive investments without affecting margins.

SpaceX Stock (SPCX) Price Receives Mixed Outlook

The SpaceX stock price was down around 11.3% at the time of writing and traded at $111.12, well below its IPO price of $135. Amid this, the latest target cut from Piper Sandler has fueled concerns among traders.

However, not everyone on Wall Street is bearish on the future trajectory of SPCX stock price. For context, BoFA has reaffirmed its “buy” target for the SpaceX stock, while reiterating its price target of $235.

On the other hand, JPMorgan has raised its price target to $240 from $225, while Mizuho reiterated its “buy” rating and $200 price target for SPCX stock. Considering all these aspects, it appears that most of the analysts are still bullish on the long-term trajectory of the asset.

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