Space Exploration Technologies Corp. (NASDAQ:SPCX) stock rose nearly 4% during Friday’s premarket session as improving risk appetite lifted U.S. stock futures. Nasdaq futures gained 0.89%, while S&P 500 futures advanced 0.48%.
The broader market strength added to investor interest in SpaceX as Starlink expands its U.S. wireless ambitions, Wall Street raises its expectations and the company builds a larger AI computing business.
The stock also drew attention after the company strengthened Starlink Mobile’s U.S. wireless position through a nationwide low-band spectrum acquisition.
Elon Musk said Thursday that the acquired 800 MHz spectrum represents “the last critical piece of the spectrum puzzle” needed to provide complete cellular coverage across the U.S.
Cramer Sees Several Growth Drivers
CNBC’s Jim Cramer remains bullish on SpaceX’s underlying business, pointing to Starlink, reusable rockets and the company’s expanding computing capabilities.
“I really like SpaceX, the company, because I believe it’ll become much more profitable as cash flows from Starlink take off,” Cramer told CNBC on Friday.
Cramer also sees upside in SpaceX’s ability to buy NVIDIA Corp. (NASDAQ:NVDA) GPUs and expand computing capacity for businesses such as Starshield.
SpaceX already generates revenue by renting excess computing power to Anthropic and Alphabet Inc.’s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google.
“So, Starlink could potentially produce massive, high-margin revenue for SpaceX,” Cramer said.
Goldman Lifts Its SpaceX Forecast
Cramer also pointed to growing Wall Street support for the SpaceX thesis.
Goldman Sachs raised its SpaceX price target to $230 from $220 and reiterated a Buy rating. The new target implied roughly 37% upside from Wednesday’s closing price and stood about $5 above the stock’s June 16 record high of $225.64.
“The $10 bump from $220 to $230 ratified their previous $220 figure, which means something with the stock at $167,” Cramer said Wednesday. “Maybe there really is some rigor to this analysis.”
SpaceX had dropped as low as $104.83 in early August after reaching its June high following its initial public offering.
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AI Compute Expansion Could Add Another Revenue Stream
SpaceX is also reportedly seeking another $40 billion to buy more NVIDIA chips and expand its computing operations.
The proposed financing could include $10 billion in bank loans and another $30 billion in investment-grade debt.
“Why not [do it]? Musk can immediately monetize these chips,” Cramer said. “SpaceX could end up being NVIDIA’s largest client at this pace. That’s fantastic news for both sides.”
The additional capacity could strengthen a business that already rents excess computing power to outside customers.
Valuation Remains A Key Consideration
SpaceX trades at roughly 137 times next-12-month earnings estimates, according to FactSet, keeping valuation central to Cramer’s view.
He has repeatedly argued that investors should separate the quality of a company from the price they pay for its shares.
“Yes, there are stocks that I think are insanely priced, but SpaceX is not one of them,” Cramer said.
While Cramer does not consider SpaceX appropriate for his CNBC Investing Club Charitable Trust, he said the company’s progress is making its long-term opportunity more tangible.
“Club members, stay tuned, because it’s becoming more and more likely that SpaceX could come to fruition a lot earlier than Tesla Inc. (NASDAQ:TSLA) ever did,” Cramer said.
Price Action
SPCX Price Action: SpaceX shares were up 3.92% at $166.86 during premarket trading on Friday, according to Benzinga Pro data.
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