Prediction: This Is How Much SpaceX Stock Will Be Worth By the End of 2027

Just a few months ago, Space Exploration Technologies (NASDAQ: SPCX) completed the largest initial public offering (IPO) in history. At the time, the company was valued around $1.8 trillion. One of the biggest critiques of SpaceX's public debut was that its valuation was stretched amid CEO Elon Musk's uncanny ability to induce hype and spectacle.

However, following a blowout third-quarter earnings report, SpaceX has given investors a compelling reason to rethink how much the company is actually worth. Musk spent considerable time detailing an ambitious plan to expand SpaceX's artificial intelligence (AI) compute capacity throughout next year.

By the end of 2027, I predict SpaceX stock could reach more than $360 -- representing at least 122% upside from its current price. Read on to learn how I arrived at that forecast.

Image source: Getty Images.

SpaceX's latest earnings just changed the investment thesis

SpaceX generated $14.6 billion in revenue during the third quarter, representing 161% growth year over year. More importantly, the company reported $4.4 billion in net income, reversing a $1.1 billion loss from the prior year.

Starlink continues to be an important financial foundation for the company. Revenue from the connectivity segment increased 69% year over year to $5.2 billion, while operating income doubled to $2.4 billion. Meanwhile, the space division generated $1.8 billion in revenue supported by the company's first revenue-generating Starship mission.

The biggest development came from the super intelligence (SI) segment. SpaceX's AI division generated $7.6 billion in revenue during the third quarter, representing a jaw-dropping increase of 830% year over year. The biggest surprise was that super intelligence delivered $431 million in operating income, compared with a $1.7 billion operating loss a year earlier.

This profitability milestone matters because SpaceX is investing unprecedented sums in compute infrastructure. The company's capital expenditures (capex) reached $19.6 billion during the quarter, with $16.4 billion directed toward AI build-outs.

Even so, SpaceX has robust financial flexibility. The company ended Q3 with approximately $89.8 billion in cash and marketable securities and $38.8 billion in debt and finance leases. Combined with widening operating profits, SpaceX's balance sheet provides a solid foundation for continued expansion.

SpaceX could become the next hyperscaler

During the earnings call, Musk discussed that SpaceX expanded its computing capacity to 1.7 gigawatts (GW), compared with just 0.6 GW a year earlier. By the end of the year, SpaceX is expected to have between 2.5 GW and 3 GW of capacity online.

Musk detailed that SpaceX is seeking to add an incremental 10 GW during 2027, potentially bringing total capacity to at least 13 GW. In a more optimistic scenario, the company could reach 20 GW by the end of next year. This is important because it illustrates how demand for AI infrastructure remains unusually high. Goldman Sachs estimates the five largest AI hyperscalers -- Amazon, Alphabet, Microsoft, Meta Platforms, and Oracle -- could spend $1.2 trillion on capex in 2027. For reference, this cohort will spend about $750 billion on AI infrastructure this year.

Meanwhile, Anthropic's prospectus revealed the company has reportedly committed more than $600 billion of cloud and computing commitments -- a figure that could rise to $750 billion based on pending negotiations.

SpaceX is already benefiting from the AI infrastructure supercycle through computing agreements with Google Cloud, Anthropic, Reflection AI, and a host of other unnamed customers. As capacity remains constrained, companies like SpaceX that are capable of delivering infrastructure quickly should be able to command pricing power.

SpaceX has already demonstrated an ability to build AI infrastructure at an extraordinary pace. In 2024, Musk's xAI -- which is now part of SpaceX -- built its Colossus supercomputer, initially featuring 100,000 Nvidia GPUs, in just 122 days. Even more impressive, it took only 19 days from the installation of the first server rack to the start of AI training. As additional capacity comes online throughout 2027, SpaceX should be able to monetize those investments through long-term customer contracts and recurring AI services revenue at a premium.

Why SpaceX stock could double by next year

Musk forecasts that SpaceX could exit 2027 with an annualized revenue run rate between $500 billion and $1 trillion. If I cut the lower end of Musk's guidance in half, that would still be an impressive run rate of $250 billion by the end of next year. Applying a price-to-sales (P/S) ratio of 20 to the annualized run rate would give SpaceX an implied market cap of $5 trillion. This translates to about $368 per share.

Against this backdrop, I think SpaceX stock is an attractive long-term investment to buy and hold. With that said, smart investors will refrain from following a post-earnings rally. The more prudent strategy is to use dollar-cost averaging over the course of many years as SpaceX's bullish scenario becomes more realistic.

Adam Spatacco has positions in Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Goldman Sachs Group, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool has a disclosure policy.