Morgan Stanley Analysts Predict Doubling of SpaceX Stock Value

Morgan Stanley believes that SpaceX shares could nearly double in price to $300 per share. SpaceX conducted the largest IPO in history in June, at $135 per share. Over four months, the stock price has increased by approximately 23% compared to the offering price. Bank analyst Adam Jonas maintained a "buy" recommendation and a $300 target in a note published on Monday. This is 89% higher than the closing price on Friday, $158.96. The valuation is based on two parts. Rocket launches and the Starlink satellite internet service were valued by the analyst at $127 per share. The remaining $32 is attributed to the artificial intelligence (AI) development business. This part includes the Grok chatbot and computing power that SpaceX leases out. With 13.2 billion shares, the AI stake is valued at approximately $420 billion. Jonas believes this valuation is understated. According to him, SpaceX's recent short-term contracts for leasing computing power brought in $30–50 per watt. Other analysts' calculations are $17.60. In other words, Jonas believes that today investors are primarily paying for the rocket business and Starlink, while the value of the AI division is practically not considered.

Jonas checked the interest in the shares. Last week, he asked 40 clients if they had these shares in their portfolio. "Not a single hand was raised," the Morgan Stanley analyst said in an interview. He highlighted the main concerns of investors: whether Grok can compete with other AI models and whether Starlink will receive the radio frequency spectrum for mobile service. Jonas noted that these risks are already factored into the current quotes. The current stock price is about 30% below the peak mark of $225.64 after the IPO. On September 24, the lock-up period for selling shares after the IPO expired. Shareholders gained access to sell approximately 328 million shares. Company President Gwynne Shotwell sold shares worth $52.5 million. Meanwhile, SpaceX's AI division continues to operate at a loss. Last quarter, it lost $1.26 billion and consumed 86% of the company's capital expenditures. Not all analysts are optimistic. Some predict the price could drop to $142. The average forecast from 33 analysts is $235.10.

What could bring investors back to SpaceX. Analyst Adam Jonas highlights Starship, Elon Musk's dream ship, which recently successfully completed an orbital flight. The 15th launch is expected at the end of October or early November. According to Jonas, if SpaceX manages to catch the returning ship, the shares will receive the biggest boost since the IPO. The financial report for the third quarter will be published at the end of October. Among other potential drivers are the launch of new versions of Grok and contracts for computing power. Jonas also outlined risks for the shares. The price could drop to $100 within a year in case of a slowdown in AI development, serious problems with Starship, or significant dilution of shares. Currently, the target price of $300 does not inspire anyone, and there are no supporters to back it.