Morgan Stanley Reiterates $300 SpaceX Target, Citing Growth-Adjusted Valuation

SpaceX (NASDAQ:SPCX) trades at a discount to other large-cap AI-related companies when its expected growth is taken into account, according to Morgan Stanley analyst Adam Jonas, who reiterated an Overweight rating and $300 price target on the stock.

Jonas described SpaceX as “cheap and getting cheaper” on a growth-adjusted basis, despite the shares trading at a higher headline valuation multiple than a group of mega-cap AI-related companies.

According to the analyst, SpaceX trades at approximately 30 times estimated 2028 enterprise value to EBIT, compared with around 16 times for other mega-cap AI enablers.

However, Jonas calculated that SpaceX trades at approximately 0.3 times 2028 EV/EBIT/Growth, around 40% below the 0.5 times median for the comparison group.

At Morgan Stanley’s $300 price target, Jonas estimates the ratio would increase to approximately 0.6 times, which he said would be in line with Amazon (NASDAQ:AMZN) and below Alphabet (NASDAQ:GOOGL) and Meta (NASDAQ:META).

Morgan Stanley Notes Limited Investor Ownership

Jonas said investor interest in SpaceX shares has recently been limited. Referring to a meeting with 40 clients last week, he said “not a single hand went up” when he asked who owned the stock, adding that “it’s been really, really quiet on SPCX lately.”

The analyst said concerns including Grok’s performance relative to other frontier AI models and spectrum availability for Starlink Mobile are reflected in the current valuation.

Jonas described valuing SpaceX as “more of an ’and’ problem than an ’or’ problem,” referring to the need to consider the company’s interconnected businesses together.

At a share price of $159, Jonas estimated that the market is assigning most or all of the $127-per-share value he attributes to SpaceX’s Space and Connectivity operations, leaving approximately $32 per share attributable to AI.

He said that implied valuation is equivalent to approximately three times estimated 2028 enterprise value to sales for a neocloud-type business.

According to Jonas, a decline in the shares to $100 within 12 months would require a clear slowdown in AI development, a significant setback in Starship testing or a material dilutive event.

Compute Pricing Could Affect Revenue Estimates

Jonas identified compute pricing as an important variable in SpaceX’s valuation.

Consensus estimates assume pricing of $17.60 per watt across 4.1 gigawatts of capacity. On those assumptions, Jonas calculated that every additional $10 per watt would add more than $40 billion in revenue.

He said SpaceX’s recent short-term neocloud contracts have been priced at between $30 and $50 per watt.

The analyst identified several upcoming events that could affect investor expectations, including Starship Flight 15 in late October or early November. Jonas said a successful ship catch “could be the biggest positive catalyst since the IPO.”

Other events cited by Jonas include third-quarter earnings in late October, Starship Flight 16 before the end of the year, planned Grok 4.8, 4.9 and 5.0 releases and potential additional neocloud agreements.

Morgan Stanley identified risks including slower progress on Starship reusability, lower enterprise AI monetisation, higher compute costs per watt, longer time-to-power requirements, additional funding needs and regulatory delays.

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