• Morgan Stanley reiterates Overweight on SpaceX with a $300 price target and a $600 bull case.
  • The firm argues the market undervalues SpaceX's AI platform, including compute, connectivity, and real-time data capabilities.
  • The upcoming lock-up expiry is seen as an entry point, not a risk.

A Contrarian Call

As SpaceX shares face turbulence ahead of the lock-up expiry and its recent Nasdaq 100 inclusion, Morgan Stanley is doubling down. Analyst Adam Jonas reiterated an Overweight rating with a $300 price target and a $600 bull case, arguing that the market is underpricing the company's broader AI potential. In a note to clients, Jonas wrote that SpaceX is not just a launch provider but a networked platform with compute, connectivity, and real-time data capabilities that are "undervalued in the AI era."

The timing is notable: the lock-up period, which restricts insider selling, is set to expire soon, and the stock has been volatile. But Jonas flips the narrative, suggesting that the expiry could provide a buying opportunity for investors who have been waiting on the sidelines. "We view the lock-up as an entry point, not a risk," he said.

The AI Angle

Jonas's optimism hinges on SpaceX's potential to capitalize on the AI boom. The company's Starlink satellite network already provides global connectivity, and its growing compute and data capabilities could position it as a key player in AI infrastructure. Upcoming releases of the Grok model, developed in partnership with xAI, could help close the valuation gap, according to the note.

"SpaceX's unique combination of space-based assets and AI capabilities is not fully reflected in the current price," Jonas wrote. "As Grok models roll out, we expect the market to recognize this."

The note also points to the company's strong fundamentals, which are "largely unchanged" by the lock-up expiry or its inclusion in the Nasdaq 100. Despite the recent volatility, Morgan Stanley sees the stock as undervalued, with a potential upside of more than 100% from current levels if the bull case plays out.

Market Reaction

SpaceX shares have faced pressure in recent weeks as investors braced for the lock-up expiry, which could flood the market with additional shares. However, Jonas argues that the selling pressure is already priced in, and the fundamentals remain solid. "The market has been focused on the mechanics of the lock-up, but the underlying business is as strong as ever," he said.

The company did not respond to requests for comment on the analyst's report. Meanwhile, other analysts remain divided, with some expressing caution about the valuation and others seeing similar upside.

As the lock-up date approaches, investors will be watching closely. For Morgan Stanley, the message is clear: this is a moment to buy, not to flee.

This article was updated to reflect that Morgan Stanley's price target and bull case remain unchanged.