Wedbush initiated coverage on SpaceX with an Outperform rating and a $190 price target, calling the Elon Musk company 'much more of an AI play' than a traditional space company. Dan Ives, Wedbush's Global Head of Tech Research, said the firm views SpaceX as a potential AI-driven infrastructure play with the ability to evolve into a major hyperscaler. The SPCX stock ended Tuesday's session with a gain of 4.06% and added 0.85% in after-hours trading. Ives said the $190 target implies around 16% upside from the stock's last close and that the company could become 'one of the best AI plays in the market' if it executes over the next two to three years. The analyst's thesis centers on a sum-of-the-parts valuation framework in which AI compute forms a major component of SpaceX's long-term investment case.
Wedbush Frames SpaceX as AI Infrastructure Play
Speaking on CNBC's Fast Money, Ives said SpaceX is 'much more of an AI play' than a traditional space company and is well positioned to become a major hyperscaler. He added that Wedbush views SpaceX using a sum-of-the-parts valuation, with AI compute forming a major part of its long-term investment thesis. Ives acknowledged that the company appears expensive based on current revenue but said that if it executes over the next two to three years, 'this becomes one of the best AI plays in the market.' He said investors need to 'see around the corner, rather than just looking at valuation over the next six to 12 months.'
Ives Sees Accelerating AI Demand Across Software and Chips
Looking at the second half of the year, Ives said Wedbush's supply chain checks in Taiwan and Korea point to accelerating demand, which he expects to act as a catalyst for hyperscalers during the earnings season. He said the momentum should eventually spread to software, highlighting Palantir Technologies, Microsoft, Oracle and Alphabet as areas of focus. Ives also expects semiconductor stocks to continue moving higher, saying demand continues to outstrip supply by a wide margin. 'I still believe chip names continue to go higher, just because the demand and supply is 12 to 1,' he said, adding that memory remains 'foundational to everything we're seeing' and that Wedbush remains 'very bullish' on the second half.
Analyst Remains Cautious on Adobe, Bullish on Nvidia
While constructive on much of the software sector, Ives said he remains cautious on Adobe, stating that the company needs major strategic changes, such as acquisitions or divestitures, before sentiment improves. On Nvidia, Ives stayed very bullish, saying the market is yet to fully appreciate the company's long-term opportunity in physical AI. He also downplayed the competitive threat from custom AI chips in the near term, saying he does not expect them to meaningfully challenge Nvidia's GPUs for another three to four years.
Stocktwits Retail Sentiment Turns Bearish on SPCX
On Stocktwits, retail sentiment for SPCX was bearish, unchanged in the last 24 hours. Over the past 30 days, message volume around the stock has surged 4,957%. The SPCX stock is up nearly 14% since it listed.
FAQ
What rating did Wedbush assign to SpaceX?
Wedbush initiated coverage on SpaceX with an Outperform rating and a $190 price target, which implies around 16% upside from the stock's last close.
Why does Dan Ives call SpaceX an AI play?
Ives said SpaceX is 'much more of an AI play' than a traditional space company because the firm views it as a potential AI-driven infrastructure play with the ability to evolve into a major hyperscaler, with AI compute forming a major part of its long-term investment thesis.
What is Dan Ives' outlook on Nvidia and custom AI chips?
Ives remains very bullish on Nvidia, saying the market has not fully appreciated the company's long-term opportunity in physical AI, and he does not expect custom AI chips to meaningfully challenge Nvidia's GPUs for another three to four years.
