Cramer says SpaceX’s latest price target hike could signal something bigger

Wall Street is starting to validate the SpaceX bull case, CNBC's Jim Cramer said Wednesday — a sign that Elon Musk's ambitious vision may be becoming reality faster than investors expected.

"Taking price target up, Space Exploration Technologies," the "Mad Money" host said. "Get used to hearing it."

Goldman Sachs is among the latest to raise its SpaceX price target. In a Tuesday note, the analysts went to $230 per share from $220 and reiterated their buy rating. That new SpaceX target implies about 37% upside from Wednesday's close, and it's about $5 per share above the stock's all-time high of $225.64 on June 16, just days after its record-breaking initial public offering.

Cramer said the significance of the Goldman call goes beyond the additional $10 in share price.

Shortly after that record high, SpaceX fell on hard times. When it traded as low as $104.83 in early August, Cramer said Goldman's original $220 price target seemed more aspirational than analytical. The firm's decision to raise its target with shares still well below it suggests to Cramer that the original valuation is becoming more credible. "The $10 bump from $220 to $230 ratified their previous $220 figure, which means something with the stock at $167," he added. "Maybe there really is some rigor to this analysis."

Cramer has repeatedly defended SpaceX against critics who view it as an expensive stock favored by retail investors. The stock currently trades at roughly 137 times next 12 months' earnings per share estimates, according to FactSet. He said the valuation reflects a company with several avenues for growth, from its Starlink satellite internet network and reusable rocket business to its longer-term data center ambitions. SpaceX is also generating revenue by renting excess computing power to companies including Anthropic and Alphabet's Google.

That compute business is apparently on track to become an even bigger part of the bull case — as evidenced by media reports that SpaceX is seeking to raise an additional $40 billion to buy more Nvidia chips and expand its operation. The Financial Times, which was first on the story, said the deal could include $10 billion in bank loans and an additional $30 billion in investment-grade debt.

"Why not [do it]? Musk can immediately monetize these chips," Cramer said. "SpaceX could end up being Nvidia's largest client at this pace. That's fantastic news for both sides."

Cramer still doesn't consider SpaceX appropriate for his Charitable Trust, the portfolio used by CNBC's Investing Club, but he said the company's progress is making its once-ambitious potential increasingly tangible. "Club members, stay tuned, because it's becoming more and more likely that SpaceX could come to fruition a lot earlier than Tesla ever did," he said.