SpaceX’s $2 trillion valuation is all a bet that the company will solve one major bottleneck, according to Pivotal Research. But it subscribes to the theory that the gamble will pay off. The research firm initiated coverage on the space technology company with a buy rating. It also placed a $220 price target on shares, implying a 48% gain from Friday’s close. “A successful investment case in SpaceX at the current ~$2 trillion EV rests almost entirely on a single admittedly massive engineering bottleneck,” analyst Jeffrey Wlodarczak wrote in a Tuesday note. “Starship reusability (i.e. 20-50 flights per Starship with relatively inexpensive and quick refurbishment/redeployment).” Starship is SpaceX’s launch vehicle under development that has been deployed 13 times so far, with eight launches being successful. However, none of those have reused a Starship from a previous one. SPCX 1M mountain SpaceX 1-month. If Elon Musk’s SpaceX can solve the reusability issue, Wlodarczak said that it can achieve an immense opportunity to drive down costs, expand capacity of SpaceX’s satellite internet constellation Starlink and make it easier to deploy orbital data centers. He added he expects Musk will find a breakthrough for Starship reusability. Starship reaching its full potential could even give SpaceX a monopoly over the orbital business model, Wlodarczak theorized, where it could take tolls or equity in emerging companies in exchange for access to space. But if the breakthrough in Starship’s reusability isn’t achieved, that could mean bad news for the stock, as Wlodarczak said this is all that matters in the trajectory of the company. “Investors are debating xAI, Colossus, and Starlink take-rates,” he said. “Those matter only after Starship works.” Most analysts covering SpaceX are bullish on SpaceX. Of the 37 covering the stock, 29 have a buy or strong buy rating, according to LSEG.
