Key Points:
- Morgan Stanley stated that a $100 share price values SpaceX solely on launch and Starlink cash flows.
- Wall Street analysts maintained an Overweight rating on SpaceX with price targets reaching up to $800.
- The investment bank argues orbital AI data centers represent a multi-trillion-dollar market opportunity.
- Short sellers generated $15.5 billion in paper profits during SpaceX’s recent stock decline below its IPO price.
Investment banking giant Morgan Stanley published a provocative equity research report on SpaceX, arguing that if the company’s stock falls to $100 per share, Wall Street is assigning zero financial value to Elon Musk’s artificial intelligence initiatives. Following a post-IPO price correction that pushed shares below their $135 offering price, Morgan Stanley analysts published a valuation analysis to reassure institutional investors. The bank maintained an Overweight rating on SpaceX stock, emphasizing that current market prices reflect only baseline satellite communications and rocket launch operations while completely ignoring a multi-trillion-dollar space-based AI computing opportunity.
The research note arrives following a volatile trading period for SpaceX shares. After completing a record-breaking $85.7 billion public offering at $135 per share, the stock briefly surged to an all-time intraday peak of $225.64, pushing SpaceX’s total valuation past $2.64 trillion. However, aggressive profit-taking and broader technology sector headwinds triggered a sharp 49% selloff from those high-watermarks. As the stock slid toward $115 per share, short sellers accumulated an estimated $15.5 billion in paper profits, turning SpaceX into one of Wall Street’s most heavily shorted equity positions.
Morgan Stanley equity analyst Adam Jonas addressed the stock slide by breaking down SpaceX’s fundamental sum-of-the-parts valuation. Jonas explained that a $100 share price translates to an equity market capitalization of roughly $1.3 trillion. According to the bank’s financial model, $1.3 trillion represents the isolated, standalone value of SpaceX’s core commercial operations: Starlink global satellite internet subscriptions and Falcon 9 rocket launch contracts. Consequently, buying or holding SpaceX stock near $100 allows investors to acquire the company’s futuristic space AI and orbital compute infrastructure essentially for free.
The central pillar of Morgan Stanley’s long-term bull thesis focuses on deploying artificial intelligence data centers in low Earth orbit. As terrestrial data center builders face severe land shortages, transmission grid delays, and rising local electricity prices, operating high-density AI servers on Earth is becoming increasingly expensive. Musk’s long-term vision involves using Starship to launch massive solar-powered server clusters into space. Operating servers in low Earth orbit provides continuous access to unfiltered solar energy, uses zero-gravity radiative cooling, and bypasses terrestrial power grid bottlenecks entirely.
Reaffirming its long-term confidence in the space technology giant, Morgan Stanley maintained a base price target of $300 per share, with an optimistic bull-case valuation reaching $800 per share. The bank projected that if SpaceX successfully establishes a dominant orbital AI compute network, space-based server infrastructure could generate hundreds of billions of dollars in recurring high-margin software revenue. Analysts argued that Starship’s massive 100-metric-ton payload capacity provides SpaceX with an unbeatable cost advantage for launching high-density graphics processing units and liquid-cooled server racks into orbit.
SpaceX is actively restructuring its commercial operations to accelerate Starship’s operational deployment. The company recently informed commercial satellite operators that it will not accept new dedicated bookings for its workhorse Falcon 9 rocket beyond 2028, freezing its popular SmallSat Rideshare program. Furthermore, manufacturing teams halted production lines for Falcon 9’s expendable second-stage hardware. By phasing out Falcon 9, SpaceX is forcing global satellite clients to transition to Starship, guaranteeing high payload volume for upcoming Starship launch manifests.
The operational shift coincides with final preparations for Starship Flight 13 at Starbase in South Texas. The 400-foot-tall vehicle features a Super Heavy booster powered by 33 Raptor engines. Unlike earlier test flights that carried inert mass simulators, Flight 13 carries 20 operational, next-generation Starlink V3 satellites equipped with high-speed optical laser links. The mission aims to evaluate new thermal heat shield tiles during atmospheric reentry while simultaneously testing high-density satellite deployment mechanics required for future orbital data center clusters.
While space AI compute represents future upside, Starlink’s core broadband business continues to generate massive operational cash flow. Starlink’s active subscriber base surpassed 5 million global users, generating over $10 billion in annual high-margin revenue. Furthermore, SpaceX is expanding its Direct-to-Cell satellite service in partnership with global telecom carriers, allowing standard mobile phones to connect directly to Starlink satellites without specialized ground hardware. These reliable broadband revenues provide SpaceX with the internal cash flow necessary to fund multi-billion-dollar Starship development programs without relying on debt markets.
Morgan Stanley’s valuation analysis provides institutional investors with a clear framework for evaluating SpaceX’s stock price fluctuation. While short-term market bears continue to focus on quarterly cash burn and Starship development delays, long-term fundamental investors view price dips near $100 as an attractive entry point. By pairing an established global satellite broadband monopoly with the physical hardware required to build orbital AI infrastructure, SpaceX remains uniquely positioned to capture two of the largest technology growth markets of the next decade.
