The brokerage assigned an ”outperform” rating and established a price target of $190, suggesting a potential upside of nearly 41% from SpaceX’s IPO price of $135.
The $190 price target indicates that Oppenheimer anticipates Elon Musk-led SpaceX, aiming for a $1.75 trillion IPO valuation, could reach a market capitalization of around $2.5 trillion within the next 12 to 18 months.
”We see it as the sole vertically integrated AI company equipped with the necessary capital, data, LLMs, hardware, manufacturing, and engineering expertise,” stated Oppenheimer analyst Timothy Horan in a note released on Thursday.
Horan believes the Starlink satellite internet service will be the primary cash generator, while SpaceX’s AI ventures, including xAI, are expected to become the biggest contributor over time.
A potential merger with Tesla is ”plausible,” Horan remarked, yet he believes both companies will continue to operate as a quasi-vertically integrated ecosystem to sustain access to capital.
New Street Research quickly followed suit, starting coverage with a 12-month price target of $165.
However, not all analysts share an optimistic view.
Earlier this month, Morningstar analysts estimated SpaceX’s valuation at $780 billion, significantly below the company’s IPO target, citing uncertainties surrounding its AI business, which encompasses xAI and the social media platform X.
Unlike the IPO’s underwriters, which are required to adhere to a post-listing quiet period before commencing research coverage, brokerages outside the syndicate face no such limitations and can release their assessments of the stock shortly before or right after its market launch.
J.P. Morgan, Goldman Sachs, and Morgan Stanley are among the more than a dozen underwriters for the IPO.
Oppenheimer’s Horan anticipates ”an initial demand/supply mismatch for SPCX shares due to significant retail interest and expedited index inclusion,” following the market debut.
