Key Highlights
- Shares of SpaceX climbed 15.8% to $133.11 following an Argus Research upgrade from “hold” to “buy” with a price target of $160
- Second-quarter revenue reached $7.81 billion, representing a 91.9% year-over-year increase, while per-share losses of $0.09 outperformed the anticipated $0.26 loss
- The company announced AI cloud infrastructure contracts valued at up to $20.8 billion, featuring a $6.7 billion agreement, as AI-related revenue surged threefold to $2.56 billion
- Options market activity shows traders establishing bullish positions through put selling and call buying, indicating institutional confidence in a potential price floor
- The initial insider lock-up period concluded with minimal selling pressure, although additional unlock dates extend through year-end
Shares of SpaceX (SPCX) surged 15.8% during Friday’s trading session, reaching an intraday peak of $133.48 before closing at $133.11, driven by an upgrade from Argus Research that elevated the stock from “hold” to “buy” status while establishing a $160 price objective. Trading volume exceeded typical levels by approximately 110%, with roughly 237 million shares traded.
Space Exploration Technologies Corp., SPCX
This rally comes after a challenging period for shareholders. The stock touched a new bottom on Monday ahead of its earnings announcement and had remained largely confined to the $110 range throughout late July. Friday’s surge broke through that consolidation.
The upward movement stemmed from two significant developments. Argus Research’s upgrade coincided with the expiration of the first insider lock-up window, an event that market participants had anticipated would result in substantial selling activity. However, the stock demonstrated resilience.
The company’s quarterly financial results, disclosed on Tuesday, exceeded expectations across key metrics. Revenue totaled $7.81 billion, marking a 91.9% increase compared to the prior-year period. Per-share losses of $0.09 came in significantly better than the consensus estimate calling for a $0.26 loss.
Major AI Infrastructure Agreements Fuel Enthusiasm
SpaceX announced it has locked in AI cloud infrastructure agreements totaling up to $20.8 billion during the quarter, highlighted by a standalone $6.7 billion contract. Revenue generated from artificial intelligence initiatives increased more than threefold to approximately $2.56 billion. This expansion is reshaping the investment thesis, with Wall Street increasingly viewing the company as a converged provider of space technology, global connectivity, and AI computational resources.
The Starlink division also delivered impressive performance. Subscriber counts reportedly increased twofold to 12 million users, while revenue from government agencies and enterprise clients maintained its upward trajectory.
Multiple research firms joined Argus in expressing optimism. Sanford C. Bernstein established a $248 price objective. JPMorgan also elevated its target. The aggregated view from 40 covering analysts reflects a “Moderate Buy” rating with a mean price target of $227.31.
The breakdown includes two Strong Buy ratings, 25 Buy recommendations, eight Hold positions, and five Sell ratings.
Derivatives Market Suggests Stabilization
Activity in the options market underwent a notable shift on Thursday. Unlike the speculative out-of-the-money call purchases that have characterized trading since the public offering, larger institutional transactions focused on selling put options while simultaneously purchasing calls—a strategy known as a risk reversal.
One market participant sold $12 million worth of puts at a $90 strike price expiring in June 2027, while acquiring $4.3 million in call options at a $220 strike for the identical expiration. Another transaction involved selling $3.5 million in puts with a $75 strike expiring January 2028 alongside purchasing $5 million in calls at a $185 strike. Both trades reflect conviction that downside is limited while maintaining exposure to potential appreciation.
The 14-day Relative Strength Index reached its nadir late last month, and implied volatility has declined to levels not seen since June 30.
Skeptics maintain legitimate concerns. SpaceX recorded expenditures of approximately $18.4 billion in the most recent quarter, with $15.8 billion allocated to AI infrastructure development. The company continues to operate at a GAAP loss, and the $16.8 billion Terafab initiative presents execution challenges. Outstanding share unlock events scheduled through December continue to represent a potential headwind.
For the complete fiscal year, the analyst consensus anticipates SpaceX will report a per-share loss of $0.64.
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