SpaceX (SPCX) stock: CFO reiterates $100 billion revenue target after reaching huge AI deal

Core Points

• Chief Financial Officer Bret Johnsen said SpaceX is more confident of achieving annualized revenue of US$100 billion.

• The company has won an AI computing contract worth $1.11 billion per month that is expected to launch in December and contribute approximately $13 billion in annual revenue.

• Second-quarter revenue reached US$7.81 billion, a year-on-year increase of 91.9%, and earnings per share exceeded expectations by US$0.17.

• Stocks opened at US$148.18 on Friday, with analysts maintaining a "moderate buy" rating and a consensus target of US$221.06.

• Market concerns are mainly focused on high valuations (close to 98 times sales), the recent lifting of the lock-up period resulting in an increase in outstanding shares, and the uncertainty of the AI infrastructure construction timetable.

Infrastructure Expansion Plan

Space Exploration Technologies Corp. (SPCX) shares opened at $148.18 on Friday, up 0.4%. The trend follows Chief Financial Officer Brett Johnson's speech at Goldman Sachs Communacopia + Technology, where he expressed greater confidence in achieving the US$100 billion annualized revenue target.

What are the driving forces behind this optimism? It is a newly signed AI computing agreement worth US$1.11 billion per month and will be launched in December this year. The identity of the customer has not yet been disclosed. This single arrangement contributes approximately $13 billion in annual recurring revenue to the company's growth trajectory.

To achieve the annualized revenue target of US$100 billion, SpaceX needs to generate approximately US$8.3 billion in monthly revenue. Current second-quarter data shows the company generates approximately $2.6 billion in monthly revenue. This means monthly income needs to triple from current levels.

Although these calculations may seem ambitious, the contract pipeline continues to expand. SpaceX has a $6.7 billion cloud services arrangement scheduled to expand in October, and its current AI computing partnerships with Google (GOOG) and Anthropic (ANTHRO) have generated more than $2 billion in combined revenue per month.

According to Johansen, given the computing capacity lease agreement locked in by SpaceX, the return period of AI infrastructure investment can be controlled within twelve months.

About infrastructure development

SpaceX plans to deploy slightly more than 2 GW of ground-based AI computing capacity by the end of 2026 and expand to 5 to 10 GW during 2027. Johansen emphasized that power supply constraints have become an increasingly serious challenge for ground-based AI operations, prompting companies to explore the possibility of deploying space computing solutions in the future.

Street Views and Potential Resistance

Second-quarter financial results exceeded expectations in terms of revenue and earnings. The company reported revenue of $7.81 billion, a year-on-year increase of 91.9%. The reported loss per share was $0.09, which was better than analysts 'expectations for a loss per share of $0.26, or a margin of $0.17.

Wall Street remains generally optimistic. The stock holds a consensus rating of "moderate buy", with analysts predicting an average price target of $221.06. The coverage is broken down as follows: two "strong buy" recommendations, 26 "buy" ratings, eight "hold" positions, and seven "sell" ratings.

Recent analyst activity includes Pivotal Research issuing a "buy" recommendation with a price target of $220, and HSBC's launch coverage rating of "hold" with a price target of $115. TD Cowen and Roth Capital both maintain "Buy" ratings.

Valuation concerns remain prominent, with the stock trading at about 98 times sales, a multiple that has dampened the enthusiasm of some investors. The recent lifting of the lock-up period has also freed up hundreds of millions of shares for potential trading.

Hedge fund Third Point revealed that it acquired approximately US$31 million worth of SPCX shares after its initial public offering. In addition, Rep. Maria Elvira Salazar purchased SpaceX stock worth between $1,001 and $15,000 through her UBS IRA account in August.

Achieving the US$100 billion revenue target still depends on the speed of implementation of the current agreement. Unexpected delays could prevent SpaceX from reaching this annualized threshold.