SpaceX Stock Gets a Buy Rating. Pivotal Says Starship Reusability Could Unlock $2 Trillion Valuation.

SpaceX's soaring valuation may depend less on its satellite internet business or artificial intelligence ambitions than on whether it can make one rocket fly again and again. Pivotal Research believes Elon Musk's company can solve that engineering challenge, and the firm sees substantial upside for investors if it does.

The research firm initiated coverage of SpaceX with a buy rating and a $220 price target, compared to $150 on Tuesday at 10:43 a.m ET. The call, reported by CNBC, rests on the belief that Starship can become a rapidly reusable launch system capable of transforming the economics of space transportation.

Analyst Jeffrey Wlodarczak identified the central challenge as achieving 20 to 50 flights per Starship with inexpensive refurbishment and quick turnaround between missions. In other words, the rocket must become more like a commercial aircraft than a vehicle that requires extensive rebuilding after every journey.

"A successful investment case in SpaceX at the current ~$2 trillion EV rests almost entirely on a single admittedly massive engineering bottleneck," Wlodarczak wrote in his note. The analyst expects Musk's company to overcome that obstacle, but his assessment makes clear that the investment thesis carries significant execution risk.

Starship has completed 13 test flights, eight of which were considered successful. None has yet demonstrated the repeated reuse of a Starship upper stage. SpaceX has made progress with its Super Heavy booster, including catching and reusing the first stage, but the full system's rapid reusability remains unproven.

The distinction matters because the ability to recover a rocket is not the same as operating it frequently and economically. A vehicle that can fly dozens of times without costly repairs could spread manufacturing expenses across many missions, lower the price of carrying payloads into orbit, and allow SpaceX to launch at a much higher cadence.

SpaceX's own prospectus describes Starship as central to its vertically integrated business model. The company expects the next-generation vehicle to carry substantially larger payloads than its existing rockets and eventually reduce launch costs by 99% or more compared with historical average costs per kilogram. Those projections, however, depend on achieving the reusability and operational performance that Pivotal is betting on.

For Starlink, cheaper and more frequent launches could allow SpaceX to deploy more satellites, expand network capacity and compete more aggressively for customers in the terrestrial and wireless communications market. Pivotal sees a potentially enormous opportunity if the company can scale its constellation efficiently enough to capture a meaningful share of that market.

The same economics could support building orbital data centers. SpaceX and other companies are exploring the possibility of placing computing infrastructure in space, where solar power and alternative cooling approaches could offer advantages over terrestrial facilities. The concept remains technically and commercially uncertain, but dramatically cheaper transportation would remove one of its largest barriers.

Wlodarczak also suggested that Starship could give SpaceX a powerful gatekeeper position in the emerging orbital economy. If the company controls the most economical way to move large amounts of equipment into space, it could potentially collect fees or take equity stakes from businesses seeking access to orbit. That scenario is an analyst's projection, not an established monopoly.

The downside is equally important. Without rapid reuse, SpaceX could remain a major launch and satellite operator while falling short of the scale required to justify its current valuation.

Wlodarczak's argument is that discussions about xAI, Colossus and Starlink's customer economics become secondary until Starship proves it can deliver the necessary cost reductions."Those matter only after Starship works," he wrote. Wall Street is broadly optimistic about SpaceX, with 29 of 37 analysts covering the stock assigning buy or strong buy ratings, according to LSEG data cited by CNBC.