Key Takeaways
- • SpaceX (SPCX) shares jumped 9% on Wednesday, Oct. 21, after a third-quarter report showing revenue up 161% to $14.6 billion, about 14% above analyst expectations, but the gain was fully erased by Thursday.
- • Fidelity Overseas Fund veteran and Teton Partners founder George Noble called SpaceX "the most egregiously overpriced company at scale in the history of capital markets" on Bloomberg Surveillance.
- • Trading at roughly 60x trailing twelve-month revenue of $32.0 billion and about 52x forward earnings, SpaceX sits well above Scott McNealy's 10x revenue warning.
- • Consensus projects $48.8 billion of 2026 revenue, $180 billion in 2027 and $336 billion in 2028, well short of the $500 billion to $1 trillion annualized run rate Musk targeted for end-2027.
- • Jim Chanos says SpaceX's annualized AI revenue per average megawatt was below $20 million in the third quarter; fourth-quarter results in early 2027 will test whether December revenue reached the $100 billion annualized goal.
Summary
SpaceX (SPCX) reported third-quarter revenue of $14.6 billion, up 161% and roughly 14% above analyst expectations, according to TIKR. Despite the beat, the stock rose 9% on Oct. 21 and then surrendered the entire gain the following day, amid a broader technology sell-off tied to concerns that the AI trade had run ahead of itself. About 911.5 million insider shares also became eligible for sale that day. By midday Friday, the stock was up just 1% for the week.
George Noble, who ran Fidelity's Overseas Fund in the 1980s before founding Teton Partners, argued on Bloomberg Surveillance that SpaceX is the most overpriced company at scale in market history. He said SpaceX trades at about 100x revenue and questioned whether a revenue difference of $40 billion versus $60 billion in a single quarter matters at that valuation. TIKR's calculation puts SpaceX at roughly $2 trillion, or a bit over 60x the $32.0 billion of revenue generated over the last twelve months, still about six times the 10x threshold Scott McNealy, former Sun Microsystems CEO, once cautioned against.
The valuation rests heavily on Elon Musk's targets. On the third-quarter call, Musk said SpaceX could reach an annualized revenue run rate of $500 billion to $1 trillion by the end of 2027. Consensus estimates of $180 billion for 2027 and $336 billion for 2028 fall well short of that range. SpaceX guided first-quarter 2027 revenue to $33 billion to $37 billion, and even sustained top-of-range performance would leave 2027 about $30 billion below consensus. Analysts expect free cash flow of negative $57.7 billion in 2026 and negative $140.7 billion in 2027, and consensus EPS moves from a loss of $0.30 in 2026 to $2.50 in 2027.
Analysts have raised 2027 revenue estimates 146% and 2028 estimates 200% since the end of June, reducing the forward P/E to about 52x from roughly 97x at the end of September. Bullish projections remain higher still: an X user cited by TIKR projected at least $300 billion of 2027 revenue, starting from Atreides Management's Gavin Baker estimate of $100 billion of AI revenue per gigawatt of compute and assuming SpaceX captures 30%. Short seller Jim Chanos, known for calling the Enron collapse, countered that SpaceX's annualized AI revenue per average megawatt was below $20 million in the third quarter despite deals with Google and Anthropic, noting that reported GAAP numbers have not matched the narrative. TIKR notes SpaceX's AI segment only turned an operating profit in the third quarter, so the revenue-per-megawatt data is still early.
George Noble, who ran Fidelity's Overseas Fund in the 1980s before founding Teton Partners, argued on Bloomberg Surveillance that SpaceX is the most overpriced company at scale in market history. He said SpaceX trades at about 100x revenue and questioned whether a revenue difference of $40 billion versus $60 billion in a single quarter matters at that valuation. TIKR's calculation puts SpaceX at roughly $2 trillion, or a bit over 60x the $32.0 billion of revenue generated over the last twelve months, still about six times the 10x threshold Scott McNealy, former Sun Microsystems CEO, once cautioned against.
The valuation rests heavily on Elon Musk's targets. On the third-quarter call, Musk said SpaceX could reach an annualized revenue run rate of $500 billion to $1 trillion by the end of 2027. Consensus estimates of $180 billion for 2027 and $336 billion for 2028 fall well short of that range. SpaceX guided first-quarter 2027 revenue to $33 billion to $37 billion, and even sustained top-of-range performance would leave 2027 about $30 billion below consensus. Analysts expect free cash flow of negative $57.7 billion in 2026 and negative $140.7 billion in 2027, and consensus EPS moves from a loss of $0.30 in 2026 to $2.50 in 2027.
Analysts have raised 2027 revenue estimates 146% and 2028 estimates 200% since the end of June, reducing the forward P/E to about 52x from roughly 97x at the end of September. Bullish projections remain higher still: an X user cited by TIKR projected at least $300 billion of 2027 revenue, starting from Atreides Management's Gavin Baker estimate of $100 billion of AI revenue per gigawatt of compute and assuming SpaceX captures 30%. Short seller Jim Chanos, known for calling the Enron collapse, countered that SpaceX's annualized AI revenue per average megawatt was below $20 million in the third quarter despite deals with Google and Anthropic, noting that reported GAAP numbers have not matched the narrative. TIKR notes SpaceX's AI segment only turned an operating profit in the third quarter, so the revenue-per-megawatt data is still early.
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