As SpaceX approaches $100, Morgan Stanley still reiterates Overweight with a $300 price target

Overview

Morgan Stanley discusses the valuation implications if SpaceX's share price approaches $100/share under pressure from the lockup release. The report argues that current investors are applying a substantial discount to the value of the AI business, especially Grok, Cursor, and neocloud, or even treating it as zero or negative, while SpaceX's combination of launch, satellite connectivity, and potential AI infrastructure remains scarce.

Core views

The core view is that although the stock may continue to face short-term pressure from supply overhang and insufficient catalysts, a $100/share price would imply the market is buying the Space + Connectivity businesses at a reasonable or even conservative valuation, while getting the AI optionality almost for free. Morgan Stanley believes SpaceX holds more than three-quarters of global launched mass to orbit and maneuverable satellite inventory, giving it a strong moat, while Starlink, Starship, and expanding AI compute capacity together support long-term upside.

Analysis framework

The report primarily uses scenario valuation, comparable-company multiples, sum-of-the-parts, and a 15-year DCF approach. The analysis separates Space + Connectivity from the AI businesses and compares the implied EV/EBIT, EV/EBITDA, revenue growth, and segment value contribution at $100/share, the $300 price target, and under different bull and bear scenarios.

Methodology notes

• Valuation methods15-year DCF

  long-term discounted cash flow

  The main basis for the $300 price target is a 15-year DCF, with a valuation date of 2027-06-30, using an 11.1% WACC and 11.9% cost of equity, and applying a 50% execution-risk discount to Enterprise AI valuation.

• Valuation methodsSum-of-the-Parts

  sum-of-the-parts valuation

  The target price is broken down into Space $8, Connectivity $128, X & Grok $12, and Enterprise AI $152, indicating that AI and connectivity together are the main sources of value.

• relative_valuationEV/EBIT and EV/EBITDA comps

  relative valuation comparison

  The report compares the FY28 EV/EBIT implied by $100/share with that of S&P 500 non-financial and non-real-estate companies, as well as aerospace and technology infrastructure peers, to assess whether the market's implied expectations are overly pessimistic.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• SPCX.O / SPCX US

  covered asset

  Strengths

  It has leading share in launch and satellite connectivity, with vertical integration, low launch costs, Starlink user expansion, and AI infrastructure optionality.

  Weaknesses

  The economics of the AI business remain uncertain, capex is high, management attention is stretched, and near-term catalysts may be insufficient.

  Comparison

  At $100/share, it is about 18x FY28 EV/EBIT, which the report says is close to the peer median, but its 2025-2030 revenue CAGR is materially higher.

  Risks

  lockup release, slow progress in Starship reusability, slower Starlink growth, weak enterprise AI monetization, high capex, financing dilution, and regulatory delays.

• Space + Connectivity

  core valuation support

  Strengths

  Launch and Starlink are more predictable; the report estimates standalone value at about $136/share, supported by strong market share and EBITDA margins.

  Weaknesses

  Still affected by Starship commercialization, launch cadence, and network capacity expansion.

  Comparison

  Under the $100/share scenario, if AI value is zero, the market implies FY28 EBITDA for Space + Connectivity about 28%-30% below Morgan Stanley's base estimate.

  Risks

  Starship delays, Starlink subscription growth below expectations, and slow declines in launch costs.

• AI / X & Grok / Enterprise AI / neocloud

  long-term optionality and main source of upside

  Strengths

  Potential TAM is large and may benefit from lower cost per watt, faster time-to-power, Grok and Cursor adoption, and neocloud orders.

  Weaknesses

  Execution risk is high, the economics and monetization path are uncertain, and capital requirements are large.

  Comparison

  In the target price, X & Grok is valued at $12 and Enterprise AI at $152, but the current market assigns a very low value to AI.

  Risks

  weak enterprise AI monetization, slow compute deployment, costs higher than expected, financing needs, and dilution.

Key data

• RatingOverweightThe report reiterates an Overweight rating.
• Target price$300.00Based on a 15-year DCF and sum-of-the-parts valuation.
• Closing price$118.24As of 2026-07-23.
• Implied valuation at $100/shareapproximately 18x FY28 EV/EBITThe report says this valuation is close to the peer median, but SpaceX's 2025-2030 revenue CAGR is about 3x that of peers.
• FY28 base-case revenue estimate$157bnIncludes 6 GW average compute capacity, $16.5/Watt, and 35 million average consumer subscribers at $46/month ARPU.
• FY28 base-case EBIT estimate$69bnUsed to derive multiples under the $100/share scenario.
• Standalone valuation of Space + Connectivityapproximately $136/shareDCF implies 56x EV/EBITDA.
• Target price segment breakdownSpace $8; Connectivity $128; X & Grok $12; Enterprise AI $152AI-related businesses account for an important portion of the target price.
• Base-case share price$300The report's base case.
• Bull-case share price$600Assumes faster execution in Starship, orbital compute, and Terafab.
• Bear-case share price$75Assumes Starship delays and materially weaker-than-expected AI monetization and deployment.

Impact & implications

The investment implication of the report is that if the stock moves closer to $100, the market may already have compressed the AI business value to a very low level, making the risk-reward more attractive for long-term investors. However, this view depends heavily on Starship reusability, Starlink user growth, AI compute deployment speed, and delivery of enterprise AI monetization.

Risks

• Near-term supply pressure from the lockup release.
• Earnings may fail to answer investors' key questions on AI monetization, Starship progress, and Starlink growth.
• Starship reusability may progress more slowly than expected or commercialization may be delayed.
• Starlink user and capacity growth may come in below expectations.
• Monetization of enterprise AI, Grok, Cursor, or neocloud may be weaker than expected.
• AI infrastructure cost per watt may rise or time-to-power may lengthen.
• Capex and financing needs may increase, creating dilution risk.
• Regulatory delays may affect launch, connectivity, or orbital compute deployment.

What to watch

• Progress of Starship Test Flights 14 and 15, especially V3 Booster catch, the first orbital Starship flight, operational V3 satellite launches, and upper-stage recovery.
• Cursor ARR and Grok platform adoption, especially around the expected completion of the Cursor acquisition and ahead of 3Q earnings.
• New large neocloud orders, and whether compute capacity nearly doubles to 2 GW by year-end.
• Release timing and model capabilities of Grok 4.6 and Grok 5.0.
• Starlink subscriber numbers, DTC and enterprise adoption, capacity growth, and ARPU trends.
• Cost per watt, revenue per watt, and time-to-power for AI infrastructure deployment.