SpaceX’s $800 Price Target Value’s The Company Over $10 Trillion — Should It Spark Bubble Worries?

Just when you thought that the hype was dying down for shares of Space Exploration Technologies (NASDAQ:SPCX) as they came within a few dollars of that $135 per-share IPO price, a handful of bullish sell-side analysts stepped forward, some of whom have mouth-watering upside price targets. Undoubtedly, it’s hard to imagine how SpaceX could rise to $800 per share, implying a valuation north of $10 trillion. And while shares of SpaceX seem to be in a bust phase after a short-lived post-debut surge, I do think that the name really raises the bar when it comes to mega-cap hyper-growth stocks.

With SK Hynix (NASDAQ:SKHY) also recently going live on the U.S. markets and a slate of really large AI IPOs that could also command valuations in excess of $1 trillion, perhaps bigger is better when it comes to the AI-driven growth companies.

A $10 trillion valuation and a $800 target? It’s possible, but a lot needs to go right

While $10 trillion seems out of reach, it, like the psychological ceiling that used to be the $1 trillion market cap mark, is just another figure that American firms will eventually surpass in due time, whether it’s in a few years at the hands of the AI revolution or further out due to a maturation of AI or a combination of things.

While some of the more bullish analyst price targets out there may inspire bubble fears, especially with shares of Space Exploration Technologies under quite a bit of pressure this past week, I do think that even the skeptics should ponder what the upside could be if things do go right.

Now, I’m not buying the “worth more than Earth” commentary from Elon Musk. But I do think that the firm has a realistic shot of becoming the most valuable company on Earth, provided Mr. Musk can silence the skeptics when it comes to space-based data centers, which seemingly goes against physics.

Does launching AI data centers into orbit solve the many problems faced by terrestrial data centers?

Perhaps real estate and power, but, at the same time, the vacuum of space brings forth even greater challenges that Elon Musk and company will need to have an answer for. Add latency and cosmic radiation question marks into the equation, and it certainly feels like building in the Arctic, or even in the ocean, could make sense as well.

Of course, SpaceX is well aware of the challenges it faces in getting orbital data centers to work up there. And while the firm has potential solutions to still make it work, I do think that the only way to know for sure is to launch them up there and try things out.

With Raymond James starting SpaceX shares with a $800 price target, citing the firm as a generational infrastructure platform (I’m inclined to agree), investors who initially dismissed a project like Starmind as impossible might wish to have a closer look at the proposed solutions SpaceX is trying to make the impossible possible.

Indeed, a closed fluid loop in the chilly orbits of space might just be more economical than the water and power needed to chill out terrestrial data centers.

Add potential momentum behind the heavy-payload Starship into the equation, and the abundance of solar energy in orbit, and maybe the concept of space data centers might go from pipedream to something that other firms are interested in replicating in just a few years. Time will tell, but I think it’s clear that SpaceX shares are more of a high-upside option on that technology working than anything else.

The bottom line

If the concept of orbital data centers actually works and Starship really starts hauling, let’s just say that I wouldn’t be shocked if $800 per share were to happen. Of course, that’s a pretty big if. If the ambitious project hits a wall, expect the bubble fears to pick up as vocal skeptics, like Michael Burry, look to chime in.

For now, perhaps Dr. Burry is wise not to short the stock at a time like this. If Mr. Musk proves doubters wrong with space-based data centers, perhaps a correction to the upside could be in the cards. In my view, $800 per share might be too high a target, but if all goes well, who knows?

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