When Space Exploration Technologies (SPCX +2.92%) stock IPO'ed last week, it was both literally and figuratively historic. Literally, because SpaceX's IPO was the world's biggest-ever IPO. Figuratively, because literally everyone on Wall Street wanted a piece of it.
SpaceX stock climbed for three days (including IPO day) before retreating 9.3% Wednesday. SpaceX stock is down another 6.5% in Thursday trading -- but should it be?
Image source: SpaceX.
SpaceX and the space bankers
23 investment banks underwrote the SpaceX IPO. Neither Oppenheimer nor Arete made the cut -- but for investors, that's good news. Unbound by the traditional "quiet period" when underwriters can't talk publicly about a stock they helped sell, both Oppenheimer and Arete are now talking about SpaceX.
In twin notes today, first, Arete initiated coverage of SpaceX stock with a buy rating and a $401 price target; then, Oppenheimer (which had already endorsed SpaceX) announced it is raising its price target on the space stock to $250 per share.
NASDAQ: SPCX
Key Data Points
SpaceX in space
Arete values SpaceX stock at a mind-boggling $5.3 trillion market capitalization; it's currently the highest price target for SpaceX on Wall Street, and predicts that SpaceX will, within one year, become the world's most valuable stock -- surpassing Nvidia (NVDA +3.11%), as TheFly.com reports.
Arete justifies its optimism primarily on the theory that Starlink, already SpaceX's most profitable business, will soon have V3 satellites in orbit, enabling it to capture market share among suburban as well as rural customers.
SpaceX on Earth
Oppenheimer takes a different tack, focusing on SpaceX's artificial intelligence business and, in particular, its $60 billion deal to buy Cursor. SpaceX will soon own "every layer of the AI stack," says Oppenheimer, "giving it cost and quality advantages" over everyone else in AI.
A lot like SpaceX already beats everyone else in space.
