Morgan Stanley recently made an unusual argument in favor of SpaceX (SPCX). Analyst Adam Jonas believes that at the stock’s current price, investors are getting SpaceX’s entire AI business for free. The analyst values SpaceX’s core space and satellite operations, the rockets and Starlink, at roughly $136 a share on their own. SPCX stock trades around $108 right now. So the market is paying less than what the space business is worth alone. In a sense, Grok, the Cursor coding tool, and the rest of the AI arm are not being valued at all. His view comes partly from speaking to investors, where he says that most of them write off the AI side entirely, due to its heavy spending and unclear economics. Jonas kept an “Overweight” rating with a $300 price target, calling the current stock price an attractive entry point for investors.
Despite the bullish outlook, the analyst warned that the stock could fall further in the near term. Jonas cited a large block of insider shares that is about to become sellable. He also believes that SpaceX’s first earnings report since going public will raise more questions than it answers. There are reasons the AI story could turn, though. On Friday, Elon Musk said Grok 4.6 arrives in two weeks and Grok 4.7 in four. More Starship test flights are coming, along with possible new cloud deals. For now, the market is treating SpaceX’s AI business as worthless. Jonas is betting that doesn't last.
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About SpaceX Stock
Space Exploration Technologies is a Starbase, Texas-based aerospace and technology company. The company operates through three business segments: Connectivity, Space, and AI. It offers global broadband services through Starlink, develops AI products, and launches spacecraft & rockets for government and commercial customers. It was incorporated in 2002.
Since its IPO on June 12, SPCX stock has experienced significant volatility. After climbing to $200, it dropped back to around $108, marking a decline of roughly 37% from its IPO price. The iShares US Aerospace & Defense ETF (ITA), on the other hand, generated gains of around 3% over the same period. The performance gap highlights the stock’s volatility compared with the relatively stable performance.
www.barchart.com SpaceX’s valuation cannot be read the usual way. The forward GAAP price-to-earnings ratio (P/E) is not meaningful because the company is not yet profitable. The forward price-to-sales (P/S) ratio of 38.57x is a better indicator. On its own, the P/S ratio suggests that the stock is reasonably expensive. The earnings outlook explains the steep premium. Analysts expect an extraordinary growth of 363% in 2027 and 420% in 2028, before easing off to 48% in 2029. If those numbers are met, SpaceX could soon turn profitable. The company holds $23.68 billion in cash against $30.60 billion in debt. The resulting net debt of $7 billion looks easily manageable for a company worth $1.52 trillion.
For a company investing heavily in Starship and AI compute, the balance sheet does not look problematic. Jonas values the space business alone at $136 a share, more than what the whole stock costs today. So while the price-to-sales makes the stock look expensive, there are reasons to believe it is not stretched.
What Do Analysts Expect for SPCX Stock?
On July 14, Evercore ISI started coverage of SPCX stock with an “Outperform” rating and assigned a $230 price target. According to the firm, SpaceX has significant long-term growth potential. It expects the company’s earnings and revenue to grow rapidly through 2028. Even though Evercore ISI acknowledges that some of its ambitious long-term goals still need to be proven. Following Evercore ISI’s update, Needham also raised its price target on the stock from $200 to $250 while keeping a “Buy” rating.
SPCX stock is currently covered by 33 Wall Street analysts and carries a consensus “Moderate Buy” rating. According to their estimates, it has a median price target of $228.06, which reflects an impressive 111% upside from the current share price. The most bullish estimate suggests that the stock could increase nearly eightfold from here.
www.barchart.com On the date of publication, Jabran Kundi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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