What gave SpaceX a boost?

On August 6, the first major share unlock after SpaceX went public kicked in, putting 911.5 million shares up for trading. That’s more than 1.4 times the existing float, so many expected the extra supply to weigh on the price. Instead, it recovered above the $135 IPO price. 

One possible explanation is the reverse of “buy the rumor, sell the news”: the negative impact of the insider unlock may have already been priced in, so once it happened without the expected selling pressure, investors started buying the dip. 

Another factor may have been SpaceX’s announcement that it plans to expand its own computing infrastructure, with the company set to invest $16.8 billion in the first phase alone and total spending potentially reaching $119 billion. 

A priori, the facility will produce high-performance chips for SpaceX’s orbital data centers, as well as chips for Tesla’s Optimus robots and Cybercab robotaxis. In other words, investors are starting to see SpaceX not just as a space company and Starlink operator, but as a potential major player in AI infrastructure. Just for context, SpaceX currently buys chips from external suppliers, including Nvidia, so producing them in-house could eventually reduce that reliance and provide the company with a more reliable supply for its growing computing needs.

So the market reaction may be a bit premature. Still, Morgan Stanley maintains a $300 price target and sees $600 in its bull case, driven by AI development. It’s worth noting, though, that Morgan Stanley was also one of the banks that helped take SpaceX public in June.

There are other bulls as well. Deutsche Bank says SpaceX’s goal of reaching $100 billion in annual recurring revenue by year-end looks achievable, driven mainly by cloud-computing deals with Anthropic, Google and other customers that could generate roughly $45–50 billion on their own, while Cursor could be another major growth driver. 

Of course, things could also go the other way, and AI may ultimately fail to deliver the expected growth, at least for SpaceX. 

Still, last week’s jump in SpaceX share price is another reminder of how risky it can be to short Elon Musk’s companies, in case anyone forgot that Tesla short sellers lost more than $40 billion in 2020.