Needham has raised its price target on SpaceX to $250 from $200 while maintaining a buy rating, betting that AI developments and upcoming launch milestones will support the company's valuation. The bullish call comes even as SpaceX shares trade near $135, down from their Nasdaq debut price of $150, amid growing warnings that an AI stock bubble could threaten financial markets.
Needham sees AI and Starship as catalysts
Needham attributed its higher valuation to two near-term developments tied to Elon Musk's AI strategy and SpaceX's launch schedule. The bank noted that the release of Grok 4.5 on July 8 fits with Musk's efforts to rebuild the company's AI program, which it believes could strengthen investor confidence. It also pointed to the planned Starship Flight 13 launch on July 16, arguing that a successful mission could expand SpaceX's commercial opportunities and act as another catalyst for the stock.
The upgrade stands in contrast to mounting concerns about AI-related valuations. On July 8, former White House economic advisers Jared Bernstein and Ryan Cummings warned that the AI bubble continues to inflate as technology companies keep increasing spending on artificial intelligence. Those concerns gained fresh attention after Bank of England Governor David Bailey cautioned that a sharp correction in AI stocks could spill over into the broader economy, potentially requiring central banks to respond with interest-rate cuts to limit economic damage.
Despite the warnings, investor appetite for AI companies remains firm. Reports that DeepSeek is preparing an initial public offering at a valuation of roughly $75 billion have added to expectations for another major AI listing, following reports that OpenAI and Anthropic are also planning to go public.
Technical picture points to a key breakout level
On the hourly chart, SpaceX shares are trading inside a descending channel that has guided price action lower since early July. Although the short-term trend remains bearish, the stock has bounced from support near $135, where the lower boundary of the channel and the psychological support level converge. Momentum indicators suggest selling pressure may be easing: the Relative Strength Index has recovered to around 36, keeping the stock close to oversold territory without yet confirming a reversal, while the MACD histogram has flattened considerably, indicating weakening bearish momentum.
For buyers, the first technical hurdle sits near the channel's upper boundary around $137 to $138. A move above that area could clear the path toward $140, while a sustained breakout may allow the stock to retest its Nasdaq debut price of $150. Conversely, if the $135 support fails, the descending channel suggests the current downtrend could continue.
Institutional investors have continued adding exposure despite the recent decline. ARK Invest purchased approximately $21.3 million worth of SpaceX shares on July 13, extending a position that began with a $528 million purchase when the company debuted on Nasdaq on June 12 under Cathie Wood's leadership.