David Tepper, Daniel Loeb, and Chase Coleman all bought SpaceX last quarter, yet each position represents far less than 1% of their overall portfolios. Morningstar's $62 fair value target implies more than 50% downside from SpaceX's current price just above the $135 IPO price. SpaceX analyst price targets span from $800 to double digits, reflecting deep disagreement over how to value Elon Musk's $1.89 trillion space and AI titan.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and SpaceX didn't make the cut. Grab the names FREE today. Retail has really been crowding the SpaceX trade in these earlier days, and where there's been no shortage of twists and turns for those hyper-volatile shares of Space Exploration & Technologies (NASDAQ:SPCX), I do think that investors must, at the very least, attempt to gauge the ambitious narrative to determine if today's prices (less than $10 above the IPO price of $135 per share) are, in fact, a decent, or, at the very least, a fair deal.
Of course, you've probably heard about how outrageously expensive the shares are. But, at the same time, the hyper-growth story is equally explosive. However, whether or not that's enough to justify today's sticker price remains the big topic of debate on Wall Street.
As analyst projections and price targets are coming in from all over the place, from a high of $800.00 to as low as the double digits (really, who can blame them, since a lot of SpaceX stock's value comes from some pretty out-there growth drivers that might be a profound success, or they might fall flat). Before you subscribe to the bull camp or the bear camp (Morningstar's sober price target of $62.00 entails a more than halving the shares if they're to hit its estimate of fair value), I do think it's worth hearing out the bear and bull camp theses and targets. If you're not a hyper-growth investor and are more inclined to go for classical, easy-to-predict firms with steady cash flows, you're probably going to find shares of SpaceX will be wildly expensive, perhaps close to the most expensive stock on the market.
But if you're a believer in Elon Musk and think the man will stop at nothing to win the AI race and the corporate space race, perhaps there are ways to justify that seemingly hefty multiple. Even if it's still hard to gauge what an appropriate price is to pay for one of the biggest new mega-cap tech titans to land in recent memory (actually, of all time), perhaps it's worth checking in to see what the top hedge funds are doing with the name. Surprisingly, the smart money crowd has not been waiting around to punch their ticket to Elon Musk's $1.89 trillion space and AI titan.
Whether that gives you the confidence and green light to punch your ticket, though, remains the big question. With big names, including the great David Tepper, Daniel Loeb, and Chase Coleman, all doing some buying last quarter, you'd be in some pretty good company by buying in at these levels. Indeed, nobody wants to get left behind once Elon Musk's firm finally does blast off.
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