This Analyst Sees A 47% Downside For SPCX Stock – Firm Flags Heavy AI Spending And Customer Concentration Risks (works)

• The brokerage noted that SpaceX’s cloud customers pay monthly fees and can terminate their contracts with 90 days’ notice.
• Phillip Securities also flagged customer concentration as a potential risk.
• 28 of the 35 analysts covering the stock have a ‘Buy’ rating, according to Koyfin.

SpaceX (SPCX) was in the spotlight on Monday after Phillip Securities reiterated its bearish stance, warning that the revenue which pushed its artificial intelligence business into profit may not be durable.

SPCX shares were up 0.9% in pre-market trading.

Phillip Securities Flags Customer Concentration Risks

Phillip Securities reiterated a ‘Sell’ rating and price target of $75 for SpaceX, implying a near 47% downside from current levels, according to a report by Investing.com

The brokerage noted that SpaceX’s cloud customers pay monthly fees and can terminate their contracts with 90 days’ notice. A rerating of the stock’s valuation would require these agreements to be converted into longer-term commitments.

Customer concentration is another risk, it says. One AI customer generated 19.5% of SpaceX’s second-quarter revenue, up from less than 10% a year earlier. Meanwhile, SpaceX recorded a $542 million operating loss, while capital spending was 2.4 times its revenue.

The firm initiated coverage of SpaceX last month, stating that it expects the company to remain unprofitable and burn cash through at least 2030.

SpaceX’s second-quarter revenue jumped 92% to $7.81 billion, beating Wall Street’s $6.82 billion estimate, according to Fiscal.ai. Starlink revenue rose 67%, launch sales grew 29%, and AI revenue surged 247%. It reported a loss of $0.09 per share.

Wall Street Remains Bullish On SPCX

Despite Phillip Securities’ caution, SpaceX continues to receive strong support across Wall Street. Morgan Stanley has a $300 price target, while its $600 bull case assumes faster progress across AI, Starship and orbital computing. JPMorgan recently raised its SpaceX price target to $240 from $225 and maintained an ‘Overweight’ rating, citing the company’s deep vertical integration and the rapid pace of change in AI, according to The Fly.

Overall, the stock has a consensus 12-month price target of $227, according to Koyfin. Twenty-eight of the 35 analysts covering the stock have a ‘Buy’ rating, five have a ‘Hold’ rating, and two have a ‘Sell’ rating.

Separately, regulatory filings on Friday showed that Harvard Management held a $2.2 billion stake in SpaceX, while Nvidia (NVDA) disclosed ownership of 122.8 million shares worth around $21 billion.

Retail sentiment surrounding SPCX on Stocktwits turned ‘bullish’ from ‘extremely bullish’ a day earlier.

The stock has gained around 4.5% from its listing price of $135.

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