SpaceX (SPCX) stock is trading near $153 on July 9. All the initial gains since its IPO have been wiped out, despite the stock’s inclusion in the Nasdaq-100, and a slew of high price targets coming from big Wall Street banks.
Goldman Sachs initiated the stock with a price target of $205. Morgan Stanley went even higher, setting a price target of $300. These banks were two leading underwriters for the IPO, so their having high price targets is not surprising.
In a research note shared with me, Bank of America analyst Ronald J. Epstein and his team also presented a bullish price target of $235 on SpaceX stock. Bank of America was also one of the underwriters for the IPO, so again, it was not much of a surprise.
However, what is alarming is the palpable difficulty a fairly large analyst team has had in coming up with a way to back that price target. Even more important is that, once risks to the price target are examined, the price target makes no sense and leaves a strong impression that it is nothing but peak AI bubble hype.
Readers unaware that SpaceX is an artificial intelligence company first and foremost should read its S-1. It clearly states that the company estimates its total addressable market (TAM) at $28.5 trillion, of which $26.5 trillion, or 92.98%, is expected to come from AI.
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