Shares of SpaceX (SPCX) surged 15.8% on Friday, reaching an intraday high of $133.48 before closing at $133.11, following an Argus analyst upgrade from "hold" to "buy" with a $160 price target. Trading volume exceeded typical levels by approximately 110%, with roughly 237 million shares changing hands.

The rally marks a sharp reversal for the stock, which had been under pressure in recent weeks. SPCX hit a fresh low on Monday ahead of its earnings announcement and had been consolidating near $110 since late July. Friday's breakout ended that downward trend.

The upward move was driven by two converging factors: the Argus upgrade coincided with the closing of the first insider lock-up window, an event many market participants expected would trigger substantial selling. Lock-up expirations typically free early investors and insiders to sell shares post-IPO, and the absence of heavy selling signaled confidence among existing holders. Instead of declines, the stock held firm.

Q2 Financial Results Beat Expectations

Second-quarter financial results, disclosed Tuesday, surpassed analyst projections across key metrics. Revenue totaled $7.81 billion, representing a 91.9% year-over-year increase. The company reported a loss of $0.09 per share, significantly narrower than the $0.26 loss Wall Street had anticipated.

For the full fiscal year, analysts project SpaceX will report a loss of $0.64 per share.

AI Cloud Deals Drive Revenue Growth

SpaceX announced AI cloud infrastructure contracts valued at up to $20.8 billion during the quarter, including a single $6.7 billion agreement. AI-focused revenue more than tripled, reaching approximately $2.56 billion. The company's push into AI infrastructure places it alongside hyperscalers racing to expand compute capacity to meet surging enterprise demand for generative AI workloads. This expansion is reshaping analyst perspectives, with many now describing the company as a comprehensive space, connectivity, and AI infrastructure provider.

Starlink also posted strong performance. The subscriber base reportedly doubled to 12 million users, while government and commercial connectivity revenue sustained solid growth momentum.

Analyst Consensus and Price Targets

Several analysts updated their views alongside Argus. Sanford C. Bernstein set a $248 price target, and JPMorgan also raised its target. Among 40 analysts covering the stock, the consensus rating stands at "Moderate Buy" with an average price target of $227.31. The breakdown includes two analysts with Strong Buy ratings, 25 with Buy recommendations, eight with Hold positions, and five with Sell ratings.

Options Market Signals Shift in Sentiment

Thursday saw a notable shift in options market dynamics. Rather than the far out-of-the-money call purchases that characterized post-IPO trading, larger institutional positions involved selling puts while simultaneously buying calls, a strategy known as a risk reversal. Such structures are typically deployed when traders expect limited downside and want to finance upside exposure.

One market participant sold $12 million worth of 90-strike puts expiring in June 2027 and purchased $4.3 million in 220-strike calls with the same expiration. Another transaction involved selling $3.5 million in 75-strike puts expiring January 2028 while buying $5 million in 185-strike calls. Both strategies suggest traders believe downside risk is limited.

The 14-day Relative Strength Index (RSI) reached its bottom late last month, while implied volatility declined to its lowest level since June 30.

Remaining Headwinds

Skeptics maintain concerns about the company's financial trajectory. SpaceX incurred approximately $18.4 billion in expenses last quarter, with $15.8 billion directed toward AI infrastructure investments. The company continues to generate GAAP losses, and the $16.8 billion Terafab initiative carries execution uncertainty. Additional share unlock events scheduled through December may also present headwinds. The pace and scale of capital deployment will be a metric investors continue to monitor as the company attempts to convert its infrastructure investments into sustained profitability.