CNBC Mad Money host Jim Cramer stated that Goldman Sachs' decision to raise its price target on SpaceX by $10 to $230 proves the firm's Wall Street valuations are backed by rigorous analysis rather than guesswork. The target increase comes as the company navigates potential massive debt financing for its artificial intelligence computing initiatives.
Key Takeaways
- Goldman Sachs raised its SpaceX price target by $10 to $230, marking its second upward revision since initiating coverage at $205 in July.
- SpaceX shares closed at $171.92 on October 6, having rallied from near $120 earlier in the year following its June initial public offering.
- Wall Street price targets remain split, with Deutsche Bank cutting its target from $255 to $235, while Morgan Stanley holds the highest target among lead underwriters at $300.
- SpaceX is reportedly considering a $40 billion Nvidia chip financing package split into $10 billion in bank loans and $30 billion in investment-grade debt.
Goldman Sachs Raises SpaceX Valuation Target
Goldman Sachs analyst Eric Sheridan, who initiated coverage at $205 in July following SpaceX's June IPO, increased the bank's price target to $230. Goldman previously lifted the price target from $205 to $220 on August 5.
Addressing the revision on CNBC, Jim Cramer noted that while the prior $220 target appeared difficult to defend when shares traded near $120, the stock's rise to $171.92 on October 6 validated the firm's approach. "Maybe there really is some rigor to the analysis," Cramer said, pointing out that analysts rarely boost targets on speculative stocks until market pricing exceeds existing forecasts.
Goldman's updated research note pointed to higher expected AI capacity, expanding margins, and top-line revenue growth. The revision comes shortly before SpaceX is scheduled to report its third-quarter financial results.
Wall Street Division and AI Infrastructure Debt Plan
Wall Street consensus around SpaceX remains divided among its four lead underwriters. While Goldman sits at $230 and Morgan Stanley maintains the street-high target of $300, Deutsche Bank recently lowered its target from $255 to $235.
The valuation debate coincides with reports regarding SpaceX's expanding hardware roadmap. According to Reuters, the company is evaluating a $40 billion plan to purchase Nvidia chips, structured as $10 billion in bank loans alongside $30 billion in investment-grade debt. Bloomberg reported that these discussions remain preliminary and may not result in a deal, though if completed, it would represent one of the largest debt packages ever assembled for AI infrastructure.
Cramer commented that SpaceX's commercial trajectory could unfold faster than Tesla's, though he confirmed the stock is not currently held by his Charitable Trust. The massive capital outlays also align with broader institutional discussions around capital risk, similar to how market participants monitor AI infrastructure expansion risks.
Why It Matters
Goldman's target bump highlights growing institutional confidence in non-traditional revenue streams for aerospace and tech hardware giants, particularly rented AI computing capacity. If SpaceX executes its proposed $40 billion chip leverage plan, it will signal that mega-cap tech spending is shifting heavily toward debt markets to fund compute infrastructure. Investors should closely watch the upcoming third-quarter earnings report to see whether operational margins justify these elevated capital expenditures and aggressive Wall Street price targets.
