SpaceX earnings: Wall Street sees higher revenue, heavy spending and AI-led growth

Stock moves and earnings timing

CoinCentral reports that SpaceX, trading under the ticker SPCX, was at $147.96 on Tuesday, up 1% for the day. The company is set to release third-quarter earnings after the market closes. The article says October trading has been uneven, with the stock moving both higher and lower but ending close to unchanged for the month.

The report says investors are trying to balance the company’s growth plans against the large spending needed to support computing. It also notes that this is SpaceX’s second earnings report as a public company. According to CoinCentral, the earnings call was announced only a few days earlier, which the article describes as unusual. Morgan Stanley analysts highlighted the short notice and wrote, “We do not have a good answer at this time.”

Deutsche Bank’s forecast

CoinCentral says Deutsche Bank analyst Edison Yu rates SPCX a Buy and has a $235 price target, which the article says implies about 59% upside from the current share price. Yu expects revenue of $12.6 billion, up 127% from a year earlier. He also forecasts gross margins near 59% and EBITDA above $6.6 billion.

The report says Yu believes results will mostly line up with Wall Street estimates, though stronger profit is possible. CoinCentral adds that he expects AI to drive much of the growth, with about $6 billion of revenue from that business. The article says that would be nearly triple the prior quarter, helped by the first full quarter of cloud hosting.

Yu also says the stock now trades more like an AI company than an aerospace company, which the report says makes it more sensitive to technology-sector news.

Starlink and spending plans

On Starlink, CoinCentral says Yu expects 13.5 million broadband subscribers, up from 12 million in June. He also projects average revenue per customer will fall by $2 to $64, while connectivity revenue could rise 60% to nearly $5 billion.

The article says Yu expects capital spending of $19 billion, mostly for computing, and sees capacity reaching 1.8 gigawatts. It notes that last quarter’s capex was $18.4 billion, up from $2.8 billion a year earlier. CoinCentral says that spending also includes the Terafab chip project and the new Starship rocket.

Analyst ratings and open questions

CoinCentral reports that 35 analysts cover SPCX. Of those, 28 recommend Buy, five say Hold and two say Sell. The average 12-month target is $217.50, which the article says implies 47% upside.

The report says SpaceX is taking in billions of dollars a month from customers including Anthropic and Google. It adds that questions remain about how quickly the company can expand and how many new customers it has added.

Other ties and related news

CoinCentral also says merger discussion with Tesla continues after Tesla displayed a Roadster with SpaceX rocket thrusters last week. The article says Musk and the White House also traded blame last week after Ukraine’s military said its Starlink use was throttled. It notes that Tesla is scheduled to report its own quarterly results on Wednesday, one day after SpaceX.