SpaceX Crushes Earnings Expectations, Yet Stock Price Tumbles Amid Valuation Reassessments

SpaceX's first earnings report since going public has been met with stellar results, yet its stock price is taking a hit. Despite this, Goldman Sachs remains bullish on the company, raising its price target to $220 and maintaining a buy rating.

The AI segment was the biggest highlight of the quarter, delivering a standout performance that exceeded expectations by 24% according to Citi's report. Adjusted EBITDA reached $1.146 billion, more than a hundredfold above Citi's estimate of approximately $10 million.

Goldman Sachs analysts noted that the AI business's better-than-expected performance was primarily driven by revenue from cloud service contracts, which have resulted in each newly signed contract having a more favorable economic model than the previous one. The company has also finalized plans for 20 GW of computing capacity projects, with supply-chain constraints being the primary bottleneck rather than insufficient demand.

Management has significantly raised its end-2027 onshore computing capacity target from Citi's previous forecast of 4.2 GW to 5-10 GW, and stated that it has already finalized corresponding plans for approximately 20 GW of computing capacity projects. This has prompted Goldman Sachs to substantially increase its revenue forecasts for the AI business from 2026 to 2028.