Portfolio Managers‘ Monthly: U.S. Equity Thematic Research

Research evidence excerpt

Portfolio Managers‘ Monthly: U.S. Equity Thematic Research

cadence & affordability in a way that enables it to pursue

J.P. Morgan Securities LLC

entirely new markets that others cannot access.

• Extreme Vertical Integration and Engineering First Culture. SpaceX is vertically

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cheaper than industry standards. This advantage is evident across rocket launches,

satellite manufacturing, data center construction, & AI model training. SpaceX’s

mission-driven, engineering-first culture has resulted in a series of technological

breakthroughs & industry-defining firsts across Space, Connectivity, and AI, and we

expect many more in future years.

• 150-Page Deep-Dive, Addressing the Top 10 Questions. Our in-depth report features

contributions from four senior analysts across multiple disciplines and answers 10

key questions, some of which include: 1) Can SpaceX scale Starship launches to

deliver massive orbital compute? 2) Will Starlink become a direct mobile operator?

3) Why do data centers in space make sense & how could SpaceX build them? 4)

How does SpaceX plan to fund its massive AI infrastructure compute buildout?

• Valuation Upside Supported by Strong Growth & Margin Expansion. We initiate on

SpaceX (SPCX) with an Overweight rating & a December 2027 price target of $225

based on ~41x our 2028E GAAP EPS of $5.50, with our secondary valuation work

(EV/GAAP EBIT & SOTP) providing support. We believe SPCX warrants a

premium to its mega-cap peers (Mag7 + PLTR) trading at an average of ~38x and

median of ~20x ’28E GAAP EPS, justified by market leadership across launch,

connectivity, & AI. The financial profile further supports the multiple as we model