Goldman Sachs bets on 28% rise for SpaceX (SPCX)... Will it successfully reach the target price of $205?

▲ SpaceX (SPCX)/AI-generated image

Wall Street has set a target price of $205 for SpaceX (SpaceX, SPCX), suggesting a potential upside of approximately 28%. However, ultra-high growth and massive capital injection required to support a $2 trillion valuation have emerged as key variables.

According to Benzinga on July 7 (local time), Goldman Sachs issued a "buy" rating for SpaceX with a 12-month target price of $205. This is approximately 28% higher than the closing price of $160.42 on July 6, with a market capitalization of approximately $2.1 trillion based on the target price. Goldman Sachs evaluated the risk-reward ratio for investors at 2 to 1.

Goldman Sachs analyst Eric Sheridan's research team no longer views SpaceX as a pure rocket company. After merging with xAI and incorporating the X platform in February, SpaceX operates three business segments: space, connectivity, and artificial intelligence. Sheridan's team assessed SpaceX as a "unique company with diverse opportunities across its three businesses." In its IPO filing, SpaceX presented the combined potential market size of these three businesses as $28.5 trillion.

Goldman Sachs' growth outlook is steep. It expects SpaceX's total revenue to grow from $18.7 billion in 2025 to $474.3 billion in 2030, representing an average annual growth of 91%. Revenue from the artificial intelligence business is projected to increase from approximately $15.6 billion this year to $589 billion in 2031. The consolidated operating profit margin is also expected to improve from negative 13.9% in 2025 to approximately 50% in 2030.

Since 2023, SpaceX has been responsible for over 80% of the mass transported into orbit worldwide. In its artificial intelligence business, it has signed computing hosting agreements with Anthropic, Alphabet (Alphabet, GOOGL), and Reflection AI. Goldman Sachs anticipates that approximately 2 gigawatts of computing capacity will be operational by the end of the year, increasing to 36 gigawatts by 2030. Sheridan stated, "SpaceX demonstrates a track record of building solutions that many industry experts considered impossible."

However, growth requires massive funding. Goldman Sachs anticipates that SpaceX will need to raise approximately $270 billion in debt from 2026 to 2030, and free cash flow is not expected to turn positive until the fourth quarter of 2030. Morgan Stanley analyst Adam Jonas projected annual capital expenditures of approximately $300 billion in 2031 and believes a positive free cash flow will be difficult before 2035. Goldman Sachs' $205 target price is based on the expectation that infrastructure development will proceed as planned.

[Article Key Summary]

-Goldman Sachs issued a "buy" rating for SpaceX with a target price of $205, anticipating an upside potential of approximately 28%.

-SpaceX's revenue is projected to increase from $18.7 billion in 2025 to $474.3 billion in 2030.

-Goldman Sachs expects SpaceX to need to raise approximately $270 billion in debt from 2026 to 2030 and anticipates that free cash flow will not turn positive until the fourth quarter of 2030.

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