SpaceX: Using space infrastructure to hedge against resistance to ground-based AI data centers

Overview

This report is a company research/initiation of coverage report by Morgan Stanley on Space Exploration Technologies Corp. The theme centers on how NIMBYism, land-use, power, and regulatory resistance faced by AI data centers on the ground enhance the strategic value of space-based AI infrastructure. The report argues that if opposition to AI data centers continues to spread, AI companies will further increase investment and announcements related to space, helping validate SpaceX's investment and leadership in space-based AI infrastructure.

Core views

The core views include: first, AI data centers in the US have not been formally and comprehensively banned by any state, but state-level and local moratoriums, permitting restrictions, and public opposition are increasing; second, resistance in Europe is more focused on grid access, energy conditions, and limits on hyperscale projects; third, space, as a 'vast, cold, sunlit backyard,' can provide a long-term alternative path for AI infrastructure in terms of energy, real estate, and cooling; fourth, the moves by Google, NVIDIA, Amazon, Blue Origin, Meta, and related projects in China show that space computing has moved from concept into a competitive race; fifth, SpaceX's Starship, Starlink, connectivity capabilities, and potential Enterprise AI monetization together support its target price.

Analysis framework

The report uses an analytical approach that combines thematic catalysts with company valuation: it first examines AI data center policy and social resistance in the US, Europe, and China, then reviews the moves by major technology companies and space enterprises in orbital computing, satellite energy, and low-earth-orbit connectivity, and finally maps these trends to SpaceX's sum-of-the-parts valuation and risk scenarios.

Methodology notes

• Valuation methodsSum-of-the-Parts

  sum-of-the-parts valuation

  The $300 target price comes from the combined value of four segments: Space, Connectivity, X & Grok, and Enterprise AI, contributing $8, $128, $12, and $152, respectively.

• Valuation methodsMorgan Stanley ModelWare

  Morgan Stanley ModelWare framework

  The report states that unless otherwise noted, all metrics are based on the Morgan Stanley ModelWare framework.

• Valuation methodsWACC and terminal growth assumptions

  discount rate and terminal growth rate assumptions

  The valuation uses an 11.1% WACC, an 11.9% cost of equity, a forecast period through 2040, and terminal growth rates ranging from 3.0% to 5.0% for different segments.

• risk_adjustmentExecution-risk discount

  execution risk discount

  The Enterprise AI valuation applies a 50% execution risk discount, reflecting uncertainty around the commercialization and buildout pace of space-based AI infrastructure.

Asset mapping & comparison

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

• Space Exploration Technologies Corp. (SPCX.US)

  Core coverage target, directly benefiting from progress in space-based AI infrastructure, Starlink connectivity, and Starship reusability.

  Strengths

  It has advantages in space launch, low-earth-orbit connectivity, potential enterprise AI infrastructure, and ecosystem integration; the report argues that AI NIMBYism could validate its investment in space infrastructure.

  Weaknesses

  Valuation is highly dependent on long-term commercialization, the pace of Starship reusability, Starlink capacity growth, and Enterprise AI monetization.

  Comparison

  Compared with participants focused solely on orbital computing or satellite connectivity, SpaceX is more integrated across launch, constellation, connectivity, and potential computing infrastructure; however, Google, NVIDIA, Amazon, Blue Origin, Meta, and projects in China are accelerating their entry into related areas.

  Risks

  Regulatory delays, rising capital expenditures, high per-unit computing costs, longer time-to-power, financing needs, and dilution risk.

• Google Project Suncatcher

  Industry validation case, planning to deploy a prototype satellite carrying TPUs in 2027 in cooperation with Planet Labs.

  Strengths

  Participation by major technology companies enhances the credibility of the space AI computing theme.

  Weaknesses

  It is still at the prototype and planning stage, and commercial scalability remains to be validated.

  Comparison

  It is more of a technology company-led orbital computing experiment, whereas SpaceX has stronger launch and constellation infrastructure.

  Risks

  Technology validation, launch cadence, cost, and regulatory uncertainty.

• NVIDIA Vera Rubin Space Module

  Industry validation case, a space-qualified chip for orbital AI data centers.

  Strengths

  It indicates that the AI chip supply chain has begun considering space-based inference scenarios.

  Weaknesses

  Chip capabilities need to be matched with launch, power supply, heat dissipation, communications, and system software.

  Comparison

  NVIDIA is more focused on core hardware supply, while SpaceX is more focused on the infrastructure platform.

  Risks

  Reliability in the space environment, system integration, and demand realization risks.

• Amazon LEO / Kuiper

  Potential competition and industry validation case, with low-earth-orbit constellation expansion related to AI/data center connectivity.

  Strengths

  Backed by a large cloud and e-commerce ecosystem.

  Weaknesses

  Compared with SpaceX, its maturity in low-earth-orbit constellation deployment and operations still needs to catch up.

  Comparison

  Amazon's advantage lies in its cloud ecosystem, while SpaceX's advantage lies in launch, Starlink, and execution of orbital infrastructure.

  Risks

  Deployment progress, regulatory spectrum issues, capital expenditures, and competitive pressure.

Key data

• RatingOverweightMorgan Stanley equity rating, corresponding to expected risk-adjusted excess return versus the industry coverage group over 12-18 months.
• Industry viewAttractiveThe report lists the industry view for Space Technology as Attractive.
• Target price$300.00Target price history shows 300 on 2026-07-07.
• Current share price$136.08The report table lists the closing price on 2026-07-14; another disclosure page lists a price of $135.27 on 2026-07-15.
• Implied upside to target priceabout 120.5%Estimated based on the $300.00 target price and the $136.08 closing price.
• US state-level situation14 states have introduced moratorium-related legislation, and the New York State legislature has passed a 1-year moratorium on large data centersThe report states that no US state has actually banned AI data centers, but moratorium proposals are spreading.
• Local-level cases155 moratorium cases tracked this year, including 60 in cities and 55 in countiesThe remainder come from townships and towns.
• SpaceX target price segment breakdownSpace $8; Connectivity $128; X & Grok $12; Enterprise AI $152Enterprise AI is the largest contributor to the target price.
• Valuation date2027-06-30The report lists the valuation date as 6/30/2027.
• Forecast period end2040The report lists a 2040 ending forecast period.

Impact & implications

The investment implication is that ground-based constraints on AI data centers could push space infrastructure from a distant option toward a more realistic strategic hedging tool. For SpaceX, this not only enhances the narrative value of Starlink, Starship, connectivity networks, and future orbital computing platforms, but may also attract more technology giants and aerospace competitors into the field, creating a landscape where validation effects and competitive pressure coexist.

Risks

• Starship reusability progresses more slowly than expected.
• Starlink user and capacity growth is slower than expected.
• Enterprise AI monetization is weaker than expected.
• AI infrastructure capital expenditures or per-watt computing costs are higher than expected.
• Longer time-to-power reduces the attractiveness of space-based AI infrastructure relative to ground-based alternatives.
• Increased financing needs or potential equity dilution.
• Regulatory approvals and policy support fall short of expectations.
• More competitors enter the space AI infrastructure track, compressing long-term returns.

What to watch

• Whether US state-level and local-level AI data center moratoriums continue to increase, especially following cases in New York, Denver, Baltimore, Minneapolis, and elsewhere.
• Federal-level support for or restrictions on space AI systems and data center construction.
• The pace of Starship reusability, declining launch costs, and the speed of capacity expansion.
• Starlink capacity growth and adoption by DTC and enterprise customers.
• Actual deployment progress of orbital computing projects by Google, NVIDIA, Amazon, Blue Origin, Meta, and related projects in China.
• Commercialization orders, neocloud partnerships, and revenue visibility for SpaceX's Enterprise AI business.
• Capital expenditures, per-unit computing costs, power supply solutions, and time-to-power for orbital data centers.