Morgan Stanley analyst Adam Jonas has reiterated a Buy rating and $300 price target on SpaceX (SPCX), representing an 89% upside from Friday’s $158.96 closing price. However, institutional participation remains muted, with Jonas revealing that during a recent meeting with 40 clients, not a single investor indicated owning the stock.
AI Business Model and Core Valuation Split
SpaceX completed its initial public offering in June at $135 a share in the largest IPO on record. Four months later, SPCX trades about 23% above its listing price, though it remains 30% below its post-IPO peak of $225.64.
Jonas breaks down the $300 price target into two distinct operational segments:
- Rockets and Starlink: Valued at $127 per share.
- Artificial Intelligence Business: Valued at $32 per share across approximately 13.2 billion shares, implying a $420 billion valuation for the AI division.
The AI segment includes the Grok chatbot and short-term computing capacity rentals. Jonas contends that analyst models underestimate this unit by assuming computing power yields $17.60 per watt, whereas SpaceX has completed recent deals at $30 to $50 per watt. Broader corporate developments continue to evolve surrounding Elon Musk's SpaceXAI initiatives.
Headwinds, Insider Sales, and Upcoming Catalysts
Several factors account for current institutional hesitation. On September 24, approximately 328 million shares were unlocked following the post-IPO lockup expiration, while President Gwynne Shotwell sold $52.5 million in stock. Furthermore, the AI division posted a loss of $1.26 billion last quarter while consuming 86% of SpaceX's capital expenditure.
Wall Street estimates remain divided. According to TipRanks, the 33-analyst average price target sits at $235.10, with the lowest estimate at $142.
Near-term catalysts include the upcoming launch of Starship Flight 15 in late October or early November, alongside Q3 earnings in late October. Industry observers frequently note that massive tech expenditure presents unique macro risks, such as when analysts warn about AI capex disruption. Jonas noted that a severe slowdown in AI adoption or major Starship setbacks could depress the stock to $100 within a year.
Key Takeaways
- Morgan Stanley reiterated an Overweight rating and $300 target on SpaceX (SPCX), against a $158.96 close.
- Rockets and Starlink account for $127/share, while AI operations represent $32/share ($420B valuation).
- 328 million shares unlocked on Sept 24, and President Gwynne Shotwell sold $52.5M in shares.
- The AI division lost $1.26 billion last quarter, using 86% of corporate capex.
Why It Matters
Morgan Stanley's analysis underscores a sharp disconnect between Wall Street research models and institutional positioning in mega-cap technology listings. If SpaceX demonstrates sustained monetization of its Grok AI software and compute leasing at $30 to $50 per watt, equity markets may re-rate the business beyond its legacy launch operation. However, with 86% of capex absorbed by an unprofitable AI division, near-term stock trajectory heavily relies on execution during Starship Flight 15 and third-quarter earnings.
