As SpaceX marked its 25th day of trading on the Nasdaq, a wave of optimistic ratings and price targets collectively issued by Wall Street investment banks has sparked widespread market skepticism.
Amid a flurry of bullish research reports from multiple banks, the company's stock price recently fell below its initial public offering (IPO) price of $135, dipping to around $125, leaving the first batch of allocated investors facing paper losses.
As the largest IPO in U.S. history, the space exploration company saw its stock surge to a high of $211 per share within roughly three trading days following its listing this past June, but subsequently entered a downtrend.
Its current market capitalization has shrunk by nearly 60% from its peak.
However, of the 23 Wall Street banks that participated in underwriting the offering, 17 jointly issued bullish price targets covering the next 12 to 18 months after the post-IPO lock-up period expired.
Data shows the median price target from these 17 institutions for the next 12 to 18 months is $225.
Among them, Raymond James issued the highest target of $800, while Stifel gave the lowest at $190.
Institutions such as Morgan Stanley, JPMorgan Chase, and Deutsche Bank set their targets closely around the median.
In its report, Morgan Stanley hailed the company's business ecosystem as "the ultimate frontier for artificial intelligence," while Bank of America claimed it is "laying the superhighway to the stars."
In response to the near-unanimous optimistic projections from Wall Street, finance scholars and analysts have pointed out that the banks' valuation models show a tendency to detach from fundamentals and follow each other mechanically.
Jay Ritter, a professor at the University of Florida and an IPO expert, noted that because the company currently lacks a clear path to profitability, analysts tend to mechanically add a massive premium to the current price, mimicking each other to avoid straying from the consensus.
Ritter emphasized that the banks' valuation logic is built on extremely aggressive assumptions.
Calculating based on the median target price, the company's market value would need to inflate by an additional $1 trillion from its pre-forecast level to reach a staggering $3 trillion.
Financial data indicates that the company's revenue for 2025 is under $19 billion, yet it posted a net loss of $4.9 billion, resulting in a price-to-sales valuation multiple of 105 times.
Market analysis suggests that to support a $3 trillion valuation or potentially even higher future valuations, the company must rapidly reverse its current high capital expenditure situation—where it spends $5 for every $4 of revenue—and achieve a profit scale surpassing that of most current tech giants.
Public information shows that five major multinational investment banks—Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, and Bank of America—accounted for approximately 85% of the shares in this offering.
From the total $75 billion raised, the underwriting syndicate collectively received $500 million in fees.
Analysis widely suggests that the massive financial interests involved are the core reason why bank analysts chose to collectively conceal potential valuation risks and issue highly homogenized bullish reports.
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