Morgan Stanley has initiated coverage of SpaceX (SPCX) with an Overweight rating and a $300 price target, marking the most bullish call among Wall Street’s biggest investment banks. This comes as SpaceX joins the Nasdaq 100 index, a milestone that has sparked significant interest among investors.
Lead analyst Adam Jonas’s target implies 87% upside from Monday’s close of around $160, a staggering prospect that has sent shockwaves through the financial community. Jonas and his team argue that SpaceX holds an ‘X of 1’ position in space infrastructure, with the rocket launch company poised to transform energy into intelligence (data centers using solar power) and leverage near-monopoly launch economics, the world’s largest LEO satellite network, and a fast-scaling AI infrastructure business.
Jonas structures SpaceX into four areas: Launch, Starlink, Terrestrial AI (land-based data centers), and Enterprise AI. The launch business depends on the development of Starship, SpaceX’s largest rocket, which is expected to become operational in the fourth quarter of this year. As Starship matures, launch costs are expected to fall to roughly $500 per kilogram by 2030 and under $150 by 2040, with the vehicle scaling from 46 launches in 2027 to more than 6,000 annually by 2040.
The team sees Starlink evolving into the default connectivity layer for virtually every device beyond the reach of terrestrial infrastructure. Morgan Stanley contends that the market underappreciates SpaceX’s data center economics, estimating cost per watt at half the industry average, excluding chips and deployment speeds six to eight times faster than peers, thanks to vertical-integration initiatives like Terafab (chip building) and Solarfab (solar equipment).
Enterprise AI is seen as a key growth area, with ‘neocloud rental deals’ giving way over time to more end-to-end AI services. The $60 billion Cursor acquisition, which boasts annual recurring revenue of $4 billion, up from around $500 million a year ago, is noted as an asset the market has yet to fully price.
Morgan Stanley sees revenue aggressively climbing from $45 billion this year to $319 billion in 2030 and $3.3 trillion by 2040, alongside operating margins approaching 59%. The price target depends on SpaceX inventing entirely new markets for connectivity and physical AI services that do not exist today. Jonas concedes the point, showing an intentionally wide range of options, from a $75 bear case to a $600 bull case, the latter implying a market value near $8 trillion.
Risks to Morgan Stanley’s model include capital expenditures reaching $300 billion per year by 2031, requiring an average of around $84 billion in external capital annually from 2027 through 2034. ‘If debt markets cannot absorb this financing need, SpaceX may need to issue equity, reduce growth investment, or slow deployment,’ Jonas noted. Other risks include dependence on founder and CEO Elon Musk, potential conflicts with Tesla-related ventures, unproven technologies, and regulatory exposure spanning the spectrum, orbital debris, export controls, and AI regulation.
Morgan Stanley and Jonas’s $300 price target is the highest among major investment banks that have issued research since the IPO quiet period lifted. Other major banks, including Wells Fargo, UBS, Goldman Sachs, Citi, and Bernstein, have also initiated coverage with varying price targets.
The inclusion of SpaceX in the Nasdaq 100 index has sparked significant interest among investors, with JPMorgan estimating up to $4.3 billion in inflows driven by index funds buyers of the stock.
