TLDR
- Wells Fargo analyst Steven Cahall says SpaceX could target around 2% of the U.S. wireless market, not compete head-on with the big three carriers
- Pivotal Research upgraded SPCX to Strong Buy with a $220 price target; consensus sits at Moderate Buy with an average target of $221.06
- SpaceX reported Q2 revenue of $7.81 billion, up 92% year over year, with EPS of -$0.09, beating estimates of -$0.26
- Virginia Retirement Systems bought 50,000 SPCX stock worth around $8.54 million in Q2; multiple other institutions also initiated positions
- Around 319 million additional SPCX stock are scheduled to become eligible for sale on September 9, with markets watching for potential selling pressure
SpaceX (SPCX) stock was trading around $153.06 in Wednesday’s premarket session, down about 0.27%, as broader market sentiment softened. The stock sits well below its 52-week high of $225.64, but still above its 52-week low of $104.83. The company carries a market cap of roughly $2.01 trillion.
Space Exploration Technologies Corp., SPCX
Wall Street has been paying close attention to SpaceX’s wireless ambitions. Wells Fargo senior analyst Steven Cahall told CNBC on Tuesday that SpaceX isn’t simply trying to become a fourth national carrier. The economics of that play don’t add up. Instead, he sees the wireless push as part of a broader technology strategy.
Cahall says the company could combine its satellite constellation and spectrum holdings with terrestrial infrastructure, potentially including wireless towers and a Wi-Fi offload arrangement with cable providers. That setup could open modest opportunities for cable and tower companies while adding competitive pressure on existing telecom operators.
“Telcos just facing another competitor, a three-player market going to a much smaller fourth player, that’s still a net negative, for sure,” Cahall said.
He doesn’t expect SpaceX to displace T-Mobile, AT&T or Verizon in the near term. Instead, he estimates the company could target around 2% of the U.S. population initially. That approach would require less spectrum, fewer towers and a fraction of the coverage a traditional nationwide network needs.
Analyst Ratings
Pivotal Research upgraded SPCX to Strong Buy on Tuesday with a $220 price target. The firm’s thesis rests heavily on SpaceX successfully scaling its reusable Starship system, which would expand launch capacity and support Starlink’s growth.
Wells Fargo maintained its Overweight rating but trimmed its price target from $215 to $212. Oppenheimer raised its target to $280 on September 2, keeping an Outperform rating. Overall, the stock holds a Moderate Buy consensus with an average target of $221.06 across 47 analysts. Targets range from $115 to $800.
Not everyone is bullish. DZ Bank started coverage with a Sell rating and a $100 target. UBS cut its target sharply to $75. Seaport Research Partners downgraded the stock from Buy to Neutral in August.
Institutional Buying
Virginia Retirement Systems picked up 50,000 SPCX stock worth around $8.54 million in Q2. Hyperion Asset Management initiated a position worth approximately $201 million. Wedbush Securities came in at around $5 million.
On the earnings front, SpaceX posted Q2 revenue of $7.81 billion, up 91.9% year over year. EPS came in at -$0.09, beating the consensus estimate of -$0.26 by $0.17. Analysts now expect full-year EPS of -$0.15.
JPMorgan estimates a potential Nasdaq-100 rebalance could generate roughly $15.5 billion in passive buying demand for SPCX. However, approximately 319 million additional SPCX stock become eligible for sale on September 9, a third unlock event the market is watching closely.
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