Space Exploration Technologies (NASDAQ: SPCX) and Micron Technologies (NASDAQ: MU) are two of the most popular stocks on the market, but CFRA analysts think they are headed in opposite directions.
Keith Snyder at CFRA has a sell rating on SpaceX. His target price of $115 per share implies 12% downside from its current share price of $131.
Angelo Zino at CFRA has a buy rating on Micron. His target price of $1,500 per share implies 76% upside from its current share price of $853.
Here's what investors should know about these popular stocks.
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SpaceX dominates the global space industry. The company accounted for more than 80% of spacecraft launches last year, and it has fired more satellites into orbit than the rest of the world combined. SpaceX's competitive advantage lies in reusable rockets. Its Falcon 9 rocket cut launch costs by 85% compared to the historical average, and its next-generation Starship will reduce costs by 99%.
"Central to our cost advantage is the reusability of key hardware — most notably boosters — which we recover, refurbish, and refly many times instead of discarding after single use," SpaceX explained in its Form S-1. "This dramatically lowers per-launch costs by minimizing hardware replacement expenses and spreading fixed production costs across repeated uses."
SpaceX has leaned on its ability to launch rockets quickly and efficiently to build Starlink, the largest space-based internet service. Starlink has more than 10,000 satellites in orbit, and it serves 12 million subscribers. Recently, the company set its sights on mobile connectivity, where it may challenge AT&T and Verizon. Tim Horan at Oppenheimer writes, "SpaceX will disrupt the $1.6 trillion communications industry."
SpaceX's first-quarter financial results were unimpressive. Revenue increased 15% to $4.6 billion. Sales in the connectivity segment (i.e., Starlink) grew quickly, but that was offset by weaker sales growth in the artificial intelligence segment and a sales decline in the space segment. The company also reported a net loss of $4.2 billion, much worse than its $528 million loss in the previous year.
However, SpaceX's revenue growth should accelerate in the coming quarters, particularly in the AI segment. The company recently signed cloud services agreements with Anthropic and Alphabet's Google, which will rent AI infrastructure for monthly fees of $1.25 billion and $920 million, respectively.
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