• Morgan Stanley (MS) reiterates Overweight on SpaceX (SPCX) with a $300 price target, arguing shares trade at a roughly 40% growth-adjusted discount to mega-cap AI peers.
  • Analyst Adam Jonas sees upcoming Starship flights, Q3 earnings, and AI/cloud contract ramps as near-term catalysts, with a successful Starship catch potentially the biggest since the June IPO.
  • The bullish call rests on SpaceX’s unique combination of launch, satellite broadband, and AI infrastructure—but skeptics point to a near-$2 trillion valuation, widening losses, and hefty capital spending.

Morgan Stanley: SpaceX “Cheap and Getting Cheaper”

Morgan Stanley has reiterated its Overweight rating on SpaceX, maintaining a $300 price target and arguing that the stock looks unusually cheap once its growth profile is taken into account. Analyst Adam Jonas wrote that SpaceX trades roughly 40% below mega-cap AI peers on a growth-adjusted basis, a gap he attributes to the market valuing the company through a single lens—telecom, aerospace and defense, or AI—rather than appreciating the strategic value of their combination.

“Valuing the company through only one lens misses the strategic value of their combination,” Jonas said, according to people familiar with the matter. He expects upcoming developments to clarify SpaceX’s role in alleviating AI-era power and chip-computing constraints.

The immediate operational catalyst is further Starship progress. A recent Starship flight reached orbit and deployed 26 next-generation Starlink satellites, and reports characterize the forthcoming Starship Flight 15 as the next high-visibility event. A successful recovery or catch would materially strengthen the case for lower launch costs and faster satellite deployment—potentially the biggest catalyst since the company’s June IPO.

SpaceX’s third quarter ended September 30, but the company had not yet set an earnings-release date in the most recent reporting. The next report will be particularly important because it is expected to include the first full quarter of several recently initiated AI/cloud arrangements and post-IPO pricing changes.

The stock was about $152 in early October—approximately 13% above its $135 IPO price but roughly 32% below its 52-week high of $225.64. That decline is central to the “cheap and getting cheaper” narrative, but it also signals investor skepticism about execution and valuation.

A Sprawling Platform

SpaceX is an aerospace, satellite communications, and AI-infrastructure company led by Elon Musk. Its core activities include Falcon launch services, the Starship reusable heavy-lift program, Starlink low-Earth-orbit satellite broadband, and—following its broader AI expansion—Grok/X-related services and data-center capacity sold to external customers. It became a public company in June 2026 and trades as NASDAQ: SPCX.

The company’s investor-relations site lists its second-quarter 2026 earnings update and 10-Q, alongside its IPO-related SEC filings. Starlink scale reached 12.0 million subscribers at June 30, roughly double the prior-year count. But Q2 ARPU of $66 per month was unchanged sequentially and down from $85 a year earlier, as international expansion and lower-priced plans grow reach but pressure average revenue per user.

The AI solutions/infrastructure segment generated $2.2 billion in Q2 revenue, up from $475 million in Q1 and $311 million a year earlier—a segment Morgan Stanley believes is underappreciated. Cloud services accounted for $1.6 billion of that Q2 AI-related revenue, a newly launched activity whose durability and customer concentration will be revealed in subsequent quarters.

AI capital expenditure reached $23.6 billion in the first half of 2026, versus $3.3 billion a year earlier, showing the scale of the bet but increasing financing, execution, and return-on-investment risk. Q2 net loss was $541 million, countering the pure-growth narrative: revenues are scaling, but the company remains highly capital intensive. Launch activity totaled 37 Falcon launches in Q2, versus 40 in Q1 and 45 a year earlier.

The most consequential disclosed commercial AI arrangement is with Anthropic: reported terms call for payments of $1.25 billion per month through May 2029, initially ramping at lower levels. A further reported Google (GOOG) arrangement reaches $920 million per month beginning in October, subject to hardware-delivery conditions. These figures explain the market’s focus on Q3 cloud revenue, but they also expose the company to customer-concentration and deployment-timing risk.

The Bull and Bear Case

The Morgan Stanley thesis is essentially a wager on the collision of three large investment cycles: AI compute scarcity, low-Earth-orbit broadband expansion, and reusability and launch economics.

Jonas argues SpaceX can participate by combining AI products, data-center capacity, satellite connectivity, and launch capability. Starlink’s subscriber growth demonstrates demand for global connectivity, especially in underserved and mobile settings. Musk recently highlighted Starlink’s capability to support multiple simultaneous sports streams on a commercial flight; United Airlines (UAL) called the service a “game-changer.”

The long-term value of Starship depends less on a single launch than on repeatable, low-cost reusability. Faster and cheaper deployment would improve Starlink’s unit economics and potentially open markets such as in-space transport, satellite deployment, and other space-based infrastructure.

But there is a significant valuation conflict. The bullish case sees the stock as trading at a large growth-adjusted discount to mega-cap AI peers. The more cautious view notes that the business carries a valuation near $2 trillion while it remains loss-making, faces very high capital expenditures, and must prove that AI/cloud revenue converts into sustainable profits rather than merely large contracted top-line figures.

Competition is already visible in aviation connectivity. Delta (DAL) chose Amazon (AMZN)’s LEO internet service rather than Starlink, and Musk publicly criticized the decision—an example of how the sector is shifting from an early-mover advantage toward a contested market among satellite networks and airline partners.

What to Watch

Investors will focus on several near-term markers. Starship execution—successful orbital, recovery, and reusability milestones—could improve confidence in lower launch-cost assumptions and faster Starlink deployment. Q3 results will show whether Starlink ARPU holds at or above $66, subscriber additions remain strong, Falcon cadence recovers, and cloud revenue accelerates. AI contract realization, including Anthropic’s first full quarter of payments and the start of Google’s full monthly payments, will test demand, delivery, and revenue recognition. Capital discipline will be scrutinized as investors assess whether the $23.6 billion first-half AI capex is producing high-quality recurring revenue and a credible route to profitability. Finally, up to 1.3 billion additional locked-up shares could become tradable on the second full trading day after the next earnings release, potentially affecting the stock independently of operating results.

“It’s a great country to invest here because there are a lot of very good companies and the market here is not as competitive as other markets,” said Giampiero Mazza, head of Italy at CVC Capital Partners (CVC.AS), in a separate context. That sentiment may resonate with SpaceX bulls who see a similarly uncontested landscape.

A SpaceX spokesperson did not respond to a request for comment by publication time.

Correction: An earlier version of this article misstated the month of the Google payment start. It is October, not September.