SpaceX's Profit Surge Draws Fresh Price Targets as Analysts Weigh AI Buildout Against Merger Noise

SpaceX's third-quarter results have given analysts something more concrete to work with than speculation about a tie-up with Tesla — and the price targets are moving accordingly. On Wednesday, TD Cowen's John Blackledge reaffirmed his buy recommendation and lifted his target to $224 from $200, while Colin Canfield of Cantor Fitzgerald kept his overweight rating and raised his target to $345 from $246. Bernstein, for its part, now sees $268 per share versus $248 previously, maintaining its outperform rating.

The dispersion in those targets is itself a caution. All three houses are pointing the same direction, but even the optimists disagree sharply on how much the earnings strength justifies.

Earnings first, deal talk second

The numbers behind the enthusiasm: SpaceX reported $14.58 billion in revenue for the third quarter of 2026, up 161% year over year. Net income came in at $4.4 billion, a swing from a net loss of $1.05 billion in the same period a year earlier, and adjusted EBITDA reached $8.8 billion. Growth alone doesn't settle the valuation question — the profit line is what shows whether expansion is translating into a better earnings base, and on that measure the company delivered.

Against that backdrop, the special committees disclosed on Wednesday — which Elon Musk confirmed have been formed by both companies to explore a possible merger — are a live item on the agenda, not a reason to mark SpaceX up. Musk himself warned against treating a deal as certain, and media reports note he sits on neither of the independent panels. A committee can examine a combination; its existence proves neither economic benefit nor an imminent agreement. Any transaction would still have to justify itself against SpaceX developing on its own, and the terms and shareholder interests involved would be what matter.

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Bernstein's capacity math

The more substantive revision comes from Bernstein, which is betting on a faster buildout of the AI business. The firm now expects 13 gigawatts of terrestrial computing capacity by the end of 2027 — five gigawatts more than it previously assumed — and as much as 20 gigawatts for 2028. That higher capacity assumption underpins the more optimistic view of the stock, though it does not mean the analysts are endorsing every company target.

For 2028, Bernstein models revenue of $424 billion. SpaceX itself has held out an annualized revenue run rate of $500 billion to $1 trillion by the end of 2027. The two figures aren't directly comparable: a year-end run rate describes a business pace extrapolated over twelve months, while Bernstein's estimate refers to full-year revenue. Even so, the gap shows how much of the story depends on the AI business ramping successfully.

SpaceX already rents out computing power, giving it a third revenue stream alongside Starlink and rocket launches. Building that out is capital-hungry. Chief financial officer Bret Johnsen expects $35–40 billion of investment in the fourth quarter of 2026, and Bernstein calculates $35 billion of capex per gigawatt as the buildout continues. Behind the capacity forecast sits a hefty financing requirement — access to capital and execution on infrastructure matter as much as demand for compute.

The $40 billion question

Musk said on Tuesday that SpaceX had closed a $40 billion debt financing for GPU purchases, with deliveries slated for the first half of 2027. He pointed to the company's investment-grade credit standing and its non-AI revenue as the reason it could raise the money, framing that diversification as an edge over pure-play AI cloud providers. Reuters reported that it remained unclear whether pricing had been agreed, and that the terms and the meaning of "closed" were left open; according to Musk, the financing is largely callable.

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The size of the facility is not, by itself, a quality signal. What matters is the obligations it creates and how productively the funded capital is deployed — a large headline number attests to neither attractive terms nor future earnings.

The next test

Management has guided to $33–37 billion of revenue for the first quarter of 2027, a range that shows how much of a growth spurt the company expects in the near term. That makes the coming quarters the real proving ground: capacity buildout, financing and revenue growth have to move together. The larger the announced infrastructure gets, the more investors will want evidence that the expected business follows. The profits are reported; the merger is under review. Those two degrees of certainty are best kept apart.

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