Oppenheimer launches bullish SpaceX coverage ahead of IPO

Oppenheimer has become the first global brokerage to launch research coverage on SpaceX, issuing a highly bullish outlook just a day before the rocket and AI giant's highly anticipated market debut.

The brokerage initiated coverage with an "outperform" rating and a price target of $190. This target implies a nearly 41% upside from SpaceX's initial public offering (IPO) price of $135. With Elon Musk’s company targeting a $1.75 trillion valuation at listing, Oppenheimer’s projection suggests the company's market capitalization could surge to roughly $2.5 trillion over the next 12 to 18 months, News.Az reports, citing Reuters.

"We see it as the only vertically integrated AI company with the required capital, data, LLMs, hardware, manufacturing and engineering talent," Oppenheimer analyst Timothy Horan noted on Thursday.

While Horan expects the Starlink satellite internet network to serve as the immediate primary cash generator, he projects that SpaceX’s AI operations—which include xAI—will become its largest value contributor over the long term. Horan also noted that an eventual merger with Tesla is "plausible," though he expects the two entities to remain separate to maintain independent access to capital markets.

Following Oppenheimer's note, New Street Research also initiated coverage on Thursday, setting a more conservative 12-month price target of $165.

The optimistic Wall Street forecasts contrast with a more skeptical assessment from Morningstar earlier this month. Morningstar analysts pegged SpaceX's valuation at $780 billion—less than half of the target IPO valuation—citing uncertainties surrounding the long-term prospects of its AI business and the social media platform X.

Because Oppenheimer and New Street Research are not part of the official underwriting syndicate, they are free from the standard post-listing quiet period restrictions that apply to underwriters like J.P. Morgan, Goldman Sachs, and Morgan Stanley.

Looking ahead to Friday's opening, Horan warned that eager investors should brace for early volatility. He expects "an initial demand/supply imbalance on SPCX shares given broad retail demand and accelerated index inclusion" immediately following the debut.

News.Az 

By Aysel Mammadzada