SpaceX Seeks Pentagon AI Compute Deal as SPCX Stock Rebounds
Shares rose 7% in morning trading following a Wall Street Journal report, though the stock remains down more than 25% since its initial public offering.
SpaceX is reportedly negotiating a multi-billion-dollar contract with the US Pentagon to provide computing power for artificial intelligence models, according to a report by the Wall Street Journal. The potential agreement, which has not been confirmed by either party, would mirror existing infrastructure deals the company has secured with technology firms including Anthropic and Alphabet.
The disclosure has provided a short-term boost to market sentiment for SpaceX, which trades under the ticker SPCX. Shares rose approximately 7% in morning trading following the report, halting a streak of seven consecutive sessions of losses. Despite the rally, the stock remains under pressure, having declined more than 25% since its initial public offering. The company currently holds a market capitalisation of $1.6 trillion.
Analysts have assigned a "Moderate Buy" rating to SPCX, with a mean target price of $231.83, implying a potential upside of 81% from current levels. The outlook is supported by the company’s expanding compute capabilities, particularly the Colossus supercomputing complex in Memphis. By March 2026, the facility had scaled to include over 150,000 H100 GPUs, 50,000 H200 GPUs, and 30,000 GB200 GPUs, positioning it as the largest fully operational single-coherent AI training cluster globally.
Financial data indicates a significant shift in capital allocation toward artificial intelligence. AI-related capital expenditures surged from $463 million in 2023 to $12.7 billion in 2025, becoming the dominant investment category. In the first quarter of 2026, the AI segment generated $818 million in revenue, while connectivity services remained the leading contributor at $3.3 billion. The firm closed 2025 with $24.7 billion in cash and minimal short-term debt, providing liquidity to support these intensive infrastructure projects.
SpaceX is scheduled to report its second-quarter 2026 earnings on 4 August, after market close. Investors will be monitoring whether the reported Pentagon interest translates into confirmed contracts that can sustain the company’s heavy capital expenditure cycle and support its valuation metrics, which currently trade at significant premiums to sector medians.
