SpaceX shares rose 14%, even though the market feared a crash. An analyst upgraded the stock's rating

Shares of Elon Musk’s space company, SpaceX, jumped 14% during trading on August 7—the day after restrictions on the sale of shares by early investors and insiders expired, which more than doubled the number of shares in free float. According to Argus Research, this could put additional pressure on SpaceX’s stock price. However, the research firm advised investors to view any short-term pullbacks as an opportunity to buy shares.

On Friday, August 7, SpaceX shares briefly rose 13.9% to $130.96. After four consecutive weeks of declines, the stock has gained about 17% over the past five trading days, according to CNBC.

The market feared that the expiration of the lock-up period for insiders’ shares would lead to a stock market crash. On August 6, holders of up to 911.5 million shares were granted the right to sell. As a result, the potential number of shares in free float more than doubled—from approximately 639 million to 1.55 billion, according to Reuters. Ahead of this, investors were selling off their shares: on August 3, the stock hit a low for its short history on the exchange before rebounding.

“We expect the stock to remain volatile due to the first lock-up expiration for insiders’ shares, with several more lock-up expirations to follow over the next year,” wrote Argus Research analyst Steve Silver in a note cited by CNBC. “However, SpaceX’s strong operating results in the second quarter of 2026 and the high growth rates expected in the coming years mitigate the impact of these factors.”

According to Argus Research, investors should view any short-term pullbacks in SpaceX shares as a buying opportunity, given the company’s strong fundamentals. Silver upgraded the stock from Neutral to Buy and reaffirmed a price target of $160, CNBC reports. This is 39% higher than the closing price on August 6.

Due to the decline in SpaceX’s stock price following the earnings report, the forward P/E ratio—which reflects the relationship between a stock’s price and its expected annual earnings— “decreased significantly and much more rapidly” than Argus had expected, creating a more attractive entry point for potential investors, the analyst added.

On August 4, SpaceX reported second-quarter revenue and profits that exceeded Wall Street expectations. At the same time, the company disclosed that capital expenditures for the same period had increased sixfold, exceeding $18 billion, primarily due to increased investment in artificial intelligence.

"Despite the forecast of higher-than-expected capital expenditures—primarily for AI infrastructure—we are encouraged by the rapid return on these investments amid the rapid growth in computing power," Silver wrote.

Argus forecasts that SpaceX's revenue will more than double in both 2026 and 2027, and the company's stock could rise significantly thanks to the leadership of CEO Elon Musk.

“SpaceX stock deserves a ‘Buy’ rating, especially given the results of Elon Musk’s other IPO—Tesla. By way of comparison: a $10,000 investment in Tesla made in 2010 would be worth $2.5 million today,” Silver wrote.

Wall Street is bullish on shares of Elon Musk’s space company: 28 out of 35 analysts covering the stock recommend buying it, according to MarketWatch. Seven analysts recommend holding the stock, while three recommend selling. The average price target for SpaceX shares is $227.1, which is 49% higher than the closing price on August 6.

This article was AI-translated and verified by a human editor