• Morgan Stanley initiates coverage on SpaceX with an Overweight rating and a $300 price target.
  • The bank identifies enterprise AI as SpaceX's biggest growth opportunity, projecting AI revenue could reach $2.5 trillion by 2040.
  • Analysts highlight SpaceX's vertically integrated model as a key differentiator in AI infrastructure and services.

A Bold Bet on AI-Driven Growth

Morgan Stanley has kicked off coverage of SpaceX with a bullish stance, assigning an Overweight rating and a $300 price target. According to analysts at the firm, the company's biggest growth lever lies in enterprise AI, driven first by AI computing capacity and later by managed AI services. The bank projects that SpaceX's AI-related revenue could reach as high as $2.5 trillion by 2040, a staggering figure that underscores the potential of the space company's pivot toward AI.

SpaceX, known for its rocket launches and Starlink satellite internet, has been quietly building out its AI infrastructure and services. Analysts believe that the company's vertical integration—from launch and satellite operations to software platforms—positions it uniquely to capitalize on the exploding demand for AI compute and services. "The AI opportunity for SpaceX is enormous," said the Morgan Stanley analyst in a note. "They have the assets and the ambition to become a major player in this space."

Beyond Aerospace: A Tech Platform in the Making

The bullish call comes as SpaceX expands beyond its traditional aerospace business. Starlink, which already provides broadband connectivity globally, is seen as a foundational layer for AI-driven applications. The bank expects SpaceX to offer AI compute capacity via its satellite network, followed by managed AI services for enterprises, potentially challenging cloud giants like Amazon and Microsoft.

According to people familiar with the matter, SpaceX has been quietly developing AI-related partnerships and considering acquisitions to bolster its capabilities. The bank notes that if execution goes as planned, SpaceX could transform from an aerospace company into a diversified tech platform, akin to how cloud providers evolved from basic infrastructure to full-service ecosystems. However, the path to $2.5 trillion in AI revenue is fraught with risks, including regulatory hurdles, competition, and the need for significant capital investment.

Market Reaction and Implications

While SpaceX remains private, the coverage has already stirred interest among investors who see the company as a potential IPO candidate. The $300 price target reflects optimism about SpaceX's ability to scale its AI business alongside its core operations. "We believe SpaceX is at the forefront of a new paradigm in AI-driven space services," the note added.

Attempts to reach SpaceX for comment were not successful. The company has not publicly commented on the analyst report.

*Correction: An earlier version of this article misstated the AI revenue projection as $2.5 billion. The correct figure is $2.5 trillion.