Morgan Stanley analyst Adam Jonas has reiterated a bullish stance on SpaceX, setting a price target of $300 per share, implying roughly 125% upside from current levels. The call comes as the stock, which trades under the ticker SPCX, recently pulled back to around $133 after hitting a high of $139.8 this week. Despite the slight dip, the shares remain 27% above their lowest point this month.
Jonas's optimism is largely tied to SpaceX's artificial intelligence operations, particularly the recent acquisition of Cursor, a coding assistant platform. In a research note, he argued that as investors see more evidence of the Cursor and Grok story, the implied valuation discount on SpaceX's AI business could narrow, potentially driving substantial appreciation in the stock. He highlighted that Cursor's tools are now used by 60% of Fortune 500 companies, and its annualized revenue has surged to over $4 billion as of June, up from $3 billion in April, despite intense competition from OpenAI and Anthropic.
The analyst's $300 target is notably higher than many of his peers. Guggenheim initiated coverage with a buy rating, while Argus raised its target to $160. Bernstein sees the stock climbing to $248, and Needham projects $250. This broad optimism reflects a belief that SpaceX's growth trajectory remains strong across multiple segments.
One of the key catalysts is the company's data center business, which has become a major competitor to CoreWeave and Nebius. SpaceX has already secured high-profile clients like Google and Anthropic. Additionally, its AI chatbot Grok, though holding a modest market share, is expected to expand over time. The Starlink division also continues to perform well, with over 12 million customers worldwide and second-quarter revenue of $4.2 billion, up from $3.25 billion a year earlier. The space business generated $962 million in Q2 and $1.58 billion in the first half of the year.
However, the investment thesis is not without risks. SpaceX is burning significant cash due to its AI investments, with capital expenditures reaching $18 billion in the second quarter. The company's valuation is also stretched, with a market capitalization exceeding $1.76 trillion against last year's revenue of $18.6 billion. Analysts project revenue to jump to $44.5 billion this year and $95 billion next year, but such growth expectations are aggressive.
Another overhang is the potential merger with Tesla, a move that the Wall Street Journal reports could be a shortcut for Elon Musk to secure his $1 trillion pay package. Combining two companies in vastly different industries would likely present integration challenges and unclear synergies. Additionally, competitive pressures are mounting across SpaceX's businesses, with Grok holding just 5% market share and Rocket Lab attracting more customers in the launch market.
Investors have seen recent volatility in SpaceX shares, and the upcoming lockup expiry could add further pressure. Yet, the company's strong fundamentals and AI momentum have drawn comparisons to other high-growth tech names. As AI earnings shifts continue to drive market narratives, SpaceX appears positioned to benefit from the broader trend.
While the bull case is compelling, investors should weigh the potential rewards against the significant risks, including valuation, cash burn, and competitive threats. The company's ability to execute on its AI and space ambitions will be critical in determining whether it can reach the lofty targets set by analysts.
This article is for informational purposes only and does not constitute financial advice.
