SpaceX at $108: Morgan Stanley Sees 177% Upside—Is It Finally Cheap?
SpaceX closed Friday at $108.37, versus its $135 IPO price and $225.64 post-listing peak. Based on approximately 13.16 billion diluted shares following the offering, its equity value has fallen to roughly $1.43 trillion.
Morgan Stanley argues that SpaceX's long-term story has not materially changed, but the stock is being driven by lockup expirations, cautious positioning and deteriorating sentiment. Its $300 price target implies 177% upside from the latest close.
The Lockup May Matter More Than Earnings
More than 930 million shares, worth approximately $100 billion, are expected to become eligible for sale on August 6. This is the first of eight tranches that could unlock nearly four billion shares through January 2027. Not all of them will be sold, but the potential new supply is larger than the existing public float.
Morgan Stanley therefore expects the first quarterly report to have limited impact unless management materially changes the long-term outlook. Consensus calls for approximately $6.9 billion in second-quarter revenue and $2.1 billion in adjusted EBITDA, but investors are likely to focus more on AI contracts, capital expenditure and compute deployment.
From $62 to $300: The Valuation Debate
The selloff has improved the risk-reward, but there is still little agreement on what SpaceX is worth.
Morningstar assigns SpaceX a $62 fair value estimate and a "Very High" uncertainty rating. Its core launch and connectivity businesses account for about $40 per share, while AI contributes only $16.50 on a probability-weighted basis.
Damodaran estimates equity value at approximately $1.3 trillion, or $100 per share, close to the current market price. His framework recognizes SpaceX's growth and margin potential but applies more conservative assumptions to AI economics.
Morgan Stanley is far more bullish. Its $300 target consists of: Space: $8; Connectivity: $128; X & Grok: $12 ; Enterprise AI: $152.
More than half of the target price therefore comes from AI-related businesses. The bullish interpretation is that Space and Connectivity alone are worth $136 per share, meaning the market is currently assigning a negative value to the AI opportunity. The cautious interpretation is that even the $136 estimate assumes years of strong Starlink growth and successful execution.
The relative valuation chart adds useful context. At the report's July 27 price, SpaceX traded at 20.2 times 2028 EV/EBIT, close to AMD at 21.2 times and GE Vernova at 20.8 times. It was well below Rocket Lab at 160.5 times, Tesla at 97.1 times and AST SpaceMobile at 25.8 times.
SpaceX is therefore no longer an extreme valuation outlier among high-growth space and technology stocks. However, it still trades above Alphabet, Amazon and Microsoft at roughly 14–16 times, and well above Nvidia and TSMC at around 10–11 times 2028 EV/EBIT.
The key limitation is that SpaceX's 2028 EBIT is not yet mature or highly visible. The multiple appears reasonable only if Starlink maintains rapid growth, Starship supports lower launch costs and AI investment begins generating substantial profit.
Starlink Sets the Floor; AI Drives the Upside
Starlink remains SpaceX's most proven source of value, while Starship and AI determine the upside. Morgan Stanley's bull case depends on faster compute deployment, new AI contracts and stronger Grok and Cursor adoption; the main risks are capex overruns, dilution and weaker-than-expected AI economics.
The Bottom Line
The stock has moved from "expensive under almost every framework"to "reasonably valued if execution succeeds." That is a meaningful improvement, but not the same as being obviously cheap. Morgan Stanley's $300 target provides substantial upside, yet half of that valuation relies on enterprise AI.
For long-term investors, the risk-reward has clearly improved—but the strongest setup may emerge only after earnings and the first major lockup release. A staged entry is more defensible than buying aggressively simply because the stock has fallen by half.
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