Elon Musk’s SpaceX is back around 11% above its  IPO price — is it safe for investors to jump back in? What the experts say

SpaceX shares closed Friday at $147.98, putting them roughly 10% above the $135 offering price, according to Yahoo Finance data. But investors who bought into the early hype have seen a much wilder ride: The stock surged above $225 just days after its debut, briefly pushing SpaceX’s valuation to roughly $3 trillion, before giving back most of those gains.

Oppenheimer analyst Timothy Horan sees a path back to those highs, having recently raised his price target to $280 from $250, with much of his bull case resting on the company’s ability to capitalize on the shortage of computing capacity needed to power the AI boom.

SpaceX “has the ability to bring on infrastructure faster than anyone else, and is using this infrastructure and its data to improve its own models faster than anyone else,” Horan wrote in a note to clients cited by MarketWatch.

SpaceX’s own forecasts help explain that optimism. The company expects its annualized revenue run rate to jump from $31 billion in the second quarter to at least $100 billion by December, with chief financial officer Bret Johnsen telling investors that cloud services would be “the largest contributor” to that increase.

Deutsche analyst Edison Yu called the $100-billion target “likely very achievable,” provided the company gets the expected boost from its neocloud business and Cursor, the AI coding startup SpaceX acquired in August.

Deutsche estimates neocloud could account for roughly $48 billion of that year-end total, followed by Starlink at $13.2 billion, Cursor at $12 billion and Starshield at $11 billion. Space-related revenue could contribute another $7.2 billion, with Grok, X and other businesses adding about $3.2 billion.

In other words, the rocket business that made SpaceX famous could soon represent a surprisingly small piece of the overall revenue pie.

That helps explain Wall Street’s enthusiasm. But it also raises a more fundamental question for investors: How much upside is left when a company is already worth $2 trillion?

The wrinkle in the $2-trillion story

For all the optimism surrounding SpaceX, its massive valuation creates a much different proposition for investors hoping to get in early on the next transformational tech company.

Morgan Creek Capital founder Mark Yusko has called SpaceX’s valuation “beyond silly,” arguing that the problem isn’t necessarily its growth prospects, but how much future growth is already reflected in its stock price.

Consider what it would take for investors to earn a 10x return from here. At a $2-trillion starting point, SpaceX would need to grow into a roughly $20 trillion company — a valuation Yusko noted would approach half the size of the projected U.S. economy a decade from now.

“It’s a mathematical impossibility,” he said.

Yusko’s thought experiment illustrates the challenge of buying into a company that was already one of the most valuable in the world when it went public. The higher the starting valuation, the harder it becomes to generate outsized returns.

Who made money from SpaceX?

While retail investors debate how much upside is left in SpaceX, some of the biggest winners got in long before the stock hit the market. Company employees, venture capital firms and other early investors accumulated shares when SpaceX was worth a fraction of its current valuation.

Now, more of those early shareholders are getting the chance to cash in as restrictions on their holdings expire.