One month ago, on June 12, Elon Musk’s artificial intelligence (AI) and space economy conglomerate, Space Exploration Technologies (SpaceX) (NASDAQ: SPCX), rewrote history with its initial public offering (IPO). The $85.7 billion raised, including the underwriters’ overallotment, nearly tripled the previous IPO record holder, Saudi Aramco.
But in kicking off IPO mania — large language model developers Anthropic and OpenAI are expected to follow in SpaceX’s footsteps — SpaceX may also be fueling the final stages of an AI bubble that history suggests is waiting to pop.
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Rarely are stock market bubble warning signs as glaring as Raymond James Financial‘s price target assigned to SpaceX.
Wall Street’s high-water price target foresees SpaceX reaching $800 in 2031
Given that 21 underwriters helped bring SpaceX public and received shares for doing so, it should come as no surprise that Wall Street analysts have, as a whole, presented an overwhelmingly positive outlook for the company.
But Raymond James Financial analyst Brian Gesuale is a true outlier. His $800 price target by 2031 implies 451% upside, based on where SpaceX’s shares ended on July 10, and assumes a valuation of roughly $10.5 trillion. For context, this would be more than double Nvidia‘s current market cap.
Gesuale foresees SpaceX’s full-year sales scaling from an estimated $38.5 billion in 2026 to approximately $837 billion by 2031. More importantly, earnings before interest, taxes, depreciation, and amortization (EBITDA) are projected to catapult from $17.7 billion in 2026 to $696 billion by 2031.
While there’s no question that AI and the space economy are two of the hottest addressable opportunities on Wall Street, several headwinds suggest Gesuale’s pie-in-the-sky price target is pure fiction and the sign of an end-stage bubble that’s about to burst.
SpaceX spotlights everything wrong with Wall Street
Although the stock market is a long-term wealth-creating machine, it’s prone to occasional bubble-bursting events. SpaceX’s current $1.91 trillion valuation and Raymond James’ $800 price target for the company spotlight everything that’s wrong with Wall Street over the short term.
For starters, SpaceX hasn’t demonstrated that its operating model is sustainable. While satellite-based broadband services provider Starlink is profitable, AI start-up xAI — the segment responsible for the lion’s share of SpaceX’s $28.5 trillion addressable market — is burning cash as Musk’s company chases AI compute capacity.
