Space Exploration Technologies SPCX, a launch, satellite-connectivity and AI-infrastructure company, jumped over 12% in Friday's regular session after Argus upgraded the stock to Buy from Hold and slapped on a $160 price target. The upgrade reflects growing confidence that SpaceX's massive AI spending spree could pay off much faster than many investors expected. That optimism followed a monster quarter, with revenue soaring 92% year over year to $7.81 billion and reinforcing the market's appetite for AI infrastructure winners.
The operating numbers were just as eye-catching. Adjusted EBITDA nearly tripled to $3.54 billion from $1.21 billion, while AI revenue exploded 247% to $2.56 billion. Even better, the AI segment flipped from a $276 million adjusted EBITDA loss a year ago to a $1.15 billion profit, showing that scale is finally kicking in. SpaceX also built a hefty $14.1 billion cloud-services backlog, giving investors a clearer view of future demand. But none of that comes cheap. AI capital expenditure reached $15.83 billion, total quarterly capital spending climbed to $18.37 billion, and the company still finished the quarter with a $541 million net loss as it continued pouring billions into expansion.
The real question is no longer demand. It is whether management can turn that demand into cash before investors lose patience. At Friday's price of $127, Argus's $160 target points to roughly 26% upside, but the company still has plenty to prove.
The GF Score paints a much more cautious picture. A score of just 13 out of 100 signals weak overall business quality, with profitability, growth, momentum and GF Value all flashing warning signs while only financial strength stands out. That is a reminder that today's rally is being driven by future expectations rather than current fundamentals. If AI revenue keeps scaling and those cloud contracts start flowing through to cash flow, the bull case gets stronger. If not, today's excitement could prove far more expensive than it looks.
