Morgan Stanley sees SpaceX stock hitting $300 on AI growth

Morgan Stanley has set a $300 price target for SpaceX, which went public on June 12 at $135 and after an early spike to $225 has fallen back to about $150. The investment bank believes investors are undervaluing SpaceX's artificial intelligence business, calling current valuations 'extremely conservative'.

SpaceX's AI opportunity includes its neocloud data-centre deals with Anthropic and Alphabet, and the planned $60 billion acquisition of AI startup Cursor, whose annual revenue run rate Morgan Stanley expects to rise from $4 billion to $33 billion by 2028. SpaceX's Starlink connectivity business is currently the only profitable segment, generating $1.65 billion in income on $4.29 billion revenue in the second quarter, while the rocket and space segment posted a $542 million loss.

SpaceX's massive Starship vehicle could become operational as early as the fourth quarter, which CEO Elon Musk says could accelerate Starlink's expansion. Morgan Stanley's analysts, led by Adam Jones, say the Enterprise AI market could represent a $22.7 trillion opportunity and that investors may be underestimating the Cursor acquisition's potential.