We're adding a new, high-profile AI play to our Bullpen stocks to watch list

With the CNBC Investing Club portfolio now down to 31 positions, we are working on new ideas to add to our Bullpen list of stocks to watch. One new idea we have is SpaceX , which Elon Musk founded in 2002. The tech giant went public in June. The offering was priced at $135 per share and opened for trading at $150. Shares have been volatile over the ensuing months, hitting an intraday peak of nearly $226 just days after going public before bottoming around $105 in early August. Since then, the stock has rebounded to the $140s. We could spend all day writing about SpaceX because it has so many layers, including a potential merger with Musk's Tesla in the not-too-distant future. But for now, let's focus on the nuts and bolts of its businesses. SPCX mountain 2026-06-11 SpaceX stock performance since mid-June IPO Space has three distinct segments: Space (rockets and satellites), Connectivity (Starlink), and SI (Super Intelligence), which was previously called AI. According to its S-1 initial public offering filing in late May, SpaceX estimates that it operates in a whopping $28.5 trillion total addressable market (TAM), which is broken out as $370 billion TAM for its Space business, $1.6 trillion TAM for Connectivity, and $26.5 trillion TAM for its SI business. We're not going to debate how realistic those estimates are, but at the very least, they illustrate the enormous opportunities the company sees ahead. In its SI business, SpaceX is on a mission to become a major artificial intelligence hyperscaler. The company is aggressively investing to build out its AI infrastructure in Memphis, including its Colossus and Colossus II supercomputers. SpaceX can monetize its AI infrastructure in a couple of ways. One is to use its computing power internally to train its Grok model and support other AI efforts. Or it can make money by leasing capacity to compute-hungry third parties like Anthropic. Earlier this week, Anthropic's S-1 revealed that it has agreed to spend up to $120.5 billion over the coming years on SpaceX compute. On SpaceX's most recent earnings call, Musk said he expects the company will bring an incremental 2.5 to 3 gigawatts (GW) of compute online by the end of 2026, with confidence to add another 10 GW of compute online in 2027. SI is by far SpaceX's fastest-growing business, with third-quarter revenue surging to $7.56 billion from $2.56 billion in the second quarter and just $813 million in the year-ago period. Connectivity is all about Starlink, which uses satellites that operate in low Earth orbit to provide high-speed broadband internet service for consumers, enterprises, and governments. Starlink has a clear competitive advantage over its satellite peers because it can leverage SpaceX's own rockets to launch satellites into orbit, helping reduce costs and accelerate network expansion. This is currently the most profitable of SpaceX, with $2.37 billion operating profit in the third quarter. Starlink launched its first satellites in 2019 — and since then, the service has rapidly grown in popularity and emerged as a competitor to broadband providers such as Verizon , AT & T , and Comcast , particularly in rural and underserved markets. Starlink also aims to become a major mobile carrier in the United States. The company added 1.6 million consumer subscribers in the third quarter, bringing its global reach to just under 14 million. That figure doesn't include an additional hundreds of thousands of enterprise subscribers and aviation customers, which is another exciting part of the business. Starlink has partnered with three of the four major U.S. wireless carriers and several leading international airlines to provide connectivity to passengers. More and more, we are seeing airlines partner with Starlink because they know access to high-speed internet is what their customers want. Take it from United Airlines CEO Scott Kirby, who said on its recent earnings call that Starlink has become a motivating factor for customers to choose which airline to fly. In Space , the company is the number one launch provider in the world. SpaceX outlines two different growth opportunities for this business. One is increasing launch payload capacity, while the other is to "establish the lunar economy, including cargo transport, manufacturing, and energy production on the moon." The Starship spacecraft generates sales through commercial launches and government contracts. As SpaceX works through the complex engineering challenges of making Starship completely reusable, it could dramatically increase the frequency of its launches. From a valuation perspective, SpaceX is not as expensive on forward earnings estimates as you may think. After turning in a third quarter in which the company made 35 cents per share on an adjusted basis, well above analyst forecasts of about 13 cents, SpaceX is now expected to make 32 cents per share for calendar year 2026 (the company lost money in Q1 and Q2). This puts the price-to-earnings multiple on 2026 numbers at 451. That is far from cheap. However, the combination of the company being more profitable today than what most people thought, coupled with those lucrative compute deals, has forced analysts to significantly raise their earnings estimate. In September, analysts estimated SpaceX would earn $1.59 on an adjusted basis in 2027, according to FactSet. But after that last quarter, analysts now expect the company will make $3.71 next year. This means the stock is currently trading at a P/E multiple of 38.5 times 2027 numbers, which is a lot more palatable in our eyes and commands our attention. Sure, SpaceX is a bit more speculative than we might typically own in the portfolio. And while some parts of those future estimates require a leap of faith — namely SI revenue growing from an estimated $26.7 billion in 2026 to $132 billion next year as more GW comes online — the stock looks attractively valued if the company can deliver on those expectations. Plus, betting against Musk has been a fool's errand. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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