Stock Analysis
Space Exploration Technologies Corp. (SPCX)
NASDAQ: SPCX · Launch, Satellite Broadband & AI Compute
Updated
Rated Watchlist, with a fair value of $116.95 against a last close of $146.90 (-20.39% implied upside). Anthropic's prospectus shows SpaceX's largest compute customer, worth about 27% of the guided run rate, can leave on 90 days' notice from spring 2027, so compute is valued as rental revenue and the range of interest moves down to $110-120.
- Verdict
- Watchlist
- Fair Value
- $116.95
- Investment Score
- 62/100prev 69.5
Investment Scorecard
Composite score 62/100 (previous 69.5). Every factor is scored out of 10, ten always being the best outcome, including for risk.
| Factor | Score | Weight | Change | Basis |
|---|---|---|---|---|
| Business Quality | 7/10 | 15% | -1 vs last report | Starlink earns 45% margins; more than half of revenue is now compute with a 90-day customer exit. |
| Financial Strength | 6/10 | 15% | unchanged | $89.9bn of cash and securities; FCF about -$10bn a quarter, now part-funded by a $40bn lease. |
| Competitive Advantage | 8/10 | 15% | -1 vs last report | Reusable launch and Starlink are unmatched; compute rental is a crowded market. |
| Management | 7/10 | 10% | -1 vs last report | Strong delivery on guidance; a $500bn-1tn revenue target with no bridge and a controller on both sides of the Tesla talks. |
| Growth Potential | 9/10 | 15% | -1 vs last report | Q1 guide implies about $140bn a year; part of it is cancellable. |
| Valuation | 3/10 | 20% | -1 vs last report | About 14x run-rate revenue; the weighted value is 20% below the price. |
| Risk (10 = lowest risk) | 4/10 | 10% | unchanged | Customer concentration and fixed lease costs offset the lower dilution risk. |
Recent Developments
| Date | Development | Impact |
|---|---|---|
| Anthropic compute terms Anthropic's prospectus shows spending of up to $120.5bn through 2029, about $3.1bn a month at full capacity (expected December 2026); initial periods end in January and March 2027, then either side can terminate on 90 days' notice. Reading: About 27% of the guided run rate rests on one customer that can leave from spring 2027; compute is valued as rental revenue and the bear case carries more weight. | High | |
| Apollo GPU lease, about $40bn Binding commitment filed on Form 8-K: an Apollo-managed entity buys chips and servers and leases them to SpaceX for 5 to 5.25 years from delivery in H1 2027; closing expected by year-end. Reading: Funds much of the 2027 build without new shares, but fixes about $8bn a year of principal against cancellable revenue. | High | |
| Possible combination with Tesla Special committees at both companies are evaluating a combination; no terms agreed and no guarantee of a deal. Reading: Cannot be sized without terms; raises governance risk because the controlling holder sits on both sides. | High | |
| Compute build and Q1 2027 revenue guide 1.7 GW of nameplate compute at 30 September; Q4 capex guided to $35-40bn; Q1 2027 revenue guided to $33-37bn. Management expects 2.5-3 GW by year-end. Reading: The base case follows the guide; the CEO's 10 GW plan for 2027 is given weight only in the bull case. | High | |
| Starship Flight 15 Expected in November, attempting to recover both booster and ship; exact date not announced. Reading: The next test of the launch cadence that larger Starlink satellites depend on. | Medium | |
| 800MHz spectrum purchase Up to 14MHz of paired low-band spectrum; closing expected in H1 2027, subject to regulatory approval. Reading: Supports the mobile plan; no material 2027 revenue assumed. | Medium |
Key Risks
| Risk | Probability | Severity | Comment |
|---|---|---|---|
| Capital intensity | High | High | Q4 capex of $35-40bn after $48bn in nine months; a $40bn lease runs five years. |
| Customer concentration | Medium | High | Anthropic is about 27% of the guided run rate and can leave on 90 days' notice from spring 2027. |
| Compute pricing | Medium | High | A turn in rental prices would hit the largest segment while lease costs stay fixed. |
| Governance and Tesla | Medium | High | The controlling holder sits on both sides of a possible combination. |
| Volatility | High | Medium | ATR about 5.4% of price. |
| Valuation | Medium | Medium | About 14x run-rate revenue against a base case near 11x. |
| Starship execution | Medium | Medium | Flight 15 attempts to recover both stages. |
Scenario Analysis
| Case | Probability | Fair Value | Outlook |
|---|---|---|---|
| Bull | 25% | $190 | Anthropic stays at full rate and renews, compute reaches well beyond 3 GW, pricing holds and Starlink keeps growing; 2027 revenue about $200bn, valued at 18x connectivity, 15x space and 12x compute. |
| Base | 45% | $119 | Q1 2027 lands inside the guide, Anthropic stays through 2027 and capacity arrives later than planned; 2027 revenue about $150bn, valued at 15x connectivity, 10x space and 10x compute. |
| Bear | 30% | $53 | Anthropic gives notice after its initial period, rental prices fall and lease costs stay; 2027 revenue about $110bn, valued at 12x connectivity, 8x space and 5x compute. |
The Case
SpaceX is a strong business with a second engine in compute, and the Apollo lease lets it build without diluting holders. The concern is that the compute revenue the price is built on can shrink at short notice: one customer worth about a quarter of the guided run rate can leave from spring 2027 while the lease runs five years. At $146.90 the shares sit above the $116.95 weighted value; the case improves in the $110-120 range or if large customers sign longer terms.
Archived Reports
Beating The Bull keeps every past version of this report on file. Verdicts and numbers reflect what was known when each one was published.
Informational use only. Not financial advice.