【SPCX Big Company Report】Morgan Stanley first set a target price of $300 for SpaceX, with the most optimistic at $600

Morgan Stanley initiates coverage of SpaceX (US: SPCX) with a “Buy” rating, setting a target price of $300, implying more than 80% potential upside from the current price. Morgan Stanley believes SpaceX has near-monopoly launch economics advantages, the world’s largest low-Earth orbit satellite network, and a rapidly expanding AI infrastructure business—one of the few platforms able to integrate orbital capacity, global connectivity, and computing capability into a single infrastructure architecture.

“We believe SpaceX can convert energy into intelligence at scale, and can flexibly monetize it through a range of consumer- and enterprise-facing solutions as it heads into the next AI era.”

Based on Morgan Stanley’s fundamental estimates, SpaceX revenue could rise from $45 billion this year to $319 billion in 2030, and is estimated to reach $3.3 trillion by 2040. The main growth potential comes from the capacity of Starship (Starship) and Starlink, ground computing, and on-orbit computing.

SpaceX is expected to be unable to achieve positive free cash flow before 2035

However, due to high spending requirements, Morgan Stanley estimates SpaceX’s annual capital expenditures will be $300 billion in 2031, so it expects free cash flow to be negative before 2035. The firm estimates that from 2027 to 2034, SpaceX will need an average of about $84 billion in external capital each year, and whether the company can secure the required funding is the biggest risk to its forecast.

Morgan Stanley says it remains optimistic about SpaceX long-term, and in the near term it will focus on this month’s Starship flight mission No. 13, the Starship flight mission No. 14 expected by the end of the third quarter, and the first batch of Starship payloads in the fourth quarter—these are all key launch milestones.

On the other hand, the firm expects investors to pay attention to periodic new cloud transactions, Starlink broadband updates every few months and user information for direct-to-consumer (DTC) users, government contract status, and new enterprise connection agreements in aviation, maritime, enterprise, mobility, and government-related markets.

Morgan Stanley’s base target for SpaceX is $300, with the valuation of its space and connectivity businesses accounting for about half, and the valuation of its AI business accounting for about half. In the most optimistic scenario, the target is $600, based on the assumption that Starship, orbital computing, and the Terafab project’s ramp-up speeds accelerate, and that the AI business’s valuation share exceeds 60%. In the most pessimistic scenario, the target is $75, mainly based on the assumption that the Starship program is delayed to 2029, AI commercialization and deployment speeds are slower than expected, and the space and connectivity businesses’ valuation share is about 90%.

Morgan Stanley says SpaceX’s outlook depends on several technologies that have yet to be validated at commercial scale, including fully reusable Starship that can launch thousands of times per year, orbital AI computing, direct network transmission, and large-scale AI infrastructure. Space exploration is full of challenges, and abnormal situations are hard to avoid.

At the same time, funding needs are also a major risk; limited market depth may delay deployment. Other risks include reliance on Musk, conflicts related to Tesla, and regulatory or geopolitical risks in areas such as launches, spectrum, orbital debris, export controls, network risks, anti-space threats, and AI regulation.