Emily Flippen, Team Rule Breakers
Of SpaceX's (NASDAQ:SPCX) business lines, xAI looks the roughest financially. The business is producing billions in losses while generating little by way of revenue, and Grok and its other AI efforts have arguably trailed the competition. You'd be forgiven for wondering why xAI was included in the SpaceX offering at all, especially since most of the "moonshot" premium attached to SpaceX rests on management's AI plans, not cash-producing assets.
But xAI isn't worthless. It's backed by contracts, the largest with Anthropic, which has reportedly agreed to pay $1.25 billion a month to rent the output of the Colossus data center through 2029. Given SpaceX generated under $20 billion in total sales last year, these deals are massive opportunities that attach more value to SpaceX's future performance than its trailing numbers might suggest.
So both Team Rule Breakers and Team Hidden Gems land here: give SpaceX credit for what it has proven, and stay curious about what it has promised. A company doesn't build this kind of structural dominance by operating incompetently, and AI moves fast enough that what's true today is likely not true tomorrow. Watch compute contracts and data center demand for the clearest sign of whether SpaceX can turn its promises into reality.
- Tom Gardner's Team Hidden Gems five-year price target: $217.52
- Team Rule Breakers' five-year price target: $141.84 (The figure is the mean of three separate analyst price targets -- a deliberately balanced call. Full breakdown coming soon in a dedicated article for members!)
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