Morgan Stanley: If SpaceX falls to $100, it’s like pricing the AI value of Grok and Cursor at zero

Morgan Stanley analyst Adam Jonas said that if SpaceX’s stock falls to $100, it means the market values its AI business at zero, or even a negative value. Therefore, he keeps a $300 price target, with more than half coming from the AI business.
（Background recap: SpaceX stock worth $116 billion is set to unlock! Shorts have locked in 30% of tradable shares）
（Background update: SpaceX shares continue to fall to a new post-IPO low! Space stocks plunge across the board, with the market holding its breath for “Starship” to restart test flights）

The market is using SpaceX’s share price to grade its artificial intelligence business. In a recent report, Morgan Stanley analyst Adam Jonas pointed out that if SpaceX’s stock falls to $100, investors have effectively valued the company’s AI business at zero—possibly even negative. In the report, Jonas wrote:

“The gap between increasingly pessimistic investor sentiment and fundamentals that have mostly not changed has created an attractive entry point for SpaceX shares.”

In other words, he believes SpaceX’s stock has already been oversold.

Zero-value AI—how is it calculated?

In mid-June, SpaceX completed one of the largest public offerings in history, raising about $86 billion. In the first three trading days after listing, the stock surged nearly 50%, but the rally failed to continue. Earlier this week, it hit a low of $110.85, 18% below the offering price.

Jonas gave SpaceX a $300 price target, with more than 50% coming from the AI business—namely Grok and the programming assistant Cursor under xAI. That means if the stock price falls to $100, after subtracting the value that the space and connectivity businesses should already have, the AI segment would be marked as zero—possibly even negative. He believes next month’s share unlock will be the biggest pressure point, when some insiders may sell their holdings.

Aggregated data shows that the first wave of unlock is set for August 6, involving about 911.5 million shares and a market cap of about $116 billion. The trigger is SpaceX’s first quarterly report after listing, which is expected to be released on August 4. So-called unlock, in simple terms, refers to the old shareholders and employee shares that were locked by contracts at the time of the IPO and cannot be sold; once the time comes, they can be dumped into the market.

Wall Street isn’t buying the AI story?

Jonas was blunt: “Most of the investors we have talked to are applying a significant discount to Grok and Cursor.” The reason is that the AI business, compared with the space and connectivity business, requires higher capital expenditures. In simple terms, the burn rate is faster than the rate at which it generates revenue, the profit model is highly uncertain, and management is also spending a lot of time on this part of the business—so the market naturally isn’t comfortable paying a premium.

This selling pressure isn’t only a SpaceX issue. Investors are pulling away from tech companies that promise to spend thousands of billions of dollars building AI infrastructure. Combined with geopolitical tensions between Iran and the U.S. that are pushing up oil prices and deepening concerns about inflation, the risk-asset sentiment worsens.

However, Wall Street overall is not bearish on SpaceX. Data compiled by Bloomberg shows that nearly 80% of analysts rate the stock as a buy. The average target price is about $232, which would mean an upside of more than 100% from the current price. The other four investment banks that led the IPO—Goldman Sachs, Bank of America, Citigroup, and JPMorgan Chase—are also all buying. Jonas’s $300 target ranks third highest among 33 analysts tracked by Bloomberg.