Morgan Stanley expects SpaceX revenue to hit $3.4 trillion in 2040, WSJ reports

Morgan Stanley is projecting SpaceX revenue could reach $3.4 trillion by 2040, with AI-related revenue seen at $190 billion in 2030 versus total revenue of about $330 billion. SpaceX’s 2025 revenue rose to $18.67 billion from $14.02 billion, though it swung to a $4.94 billion net loss from a $791 million profit, while its AI segment generated $3.2 billion. The article also highlights SpaceX’s IPO roadshow and a planned $75 billion raise, potentially making it the largest IPO ever.

Analysis

The market is not really pricing a rocket company here; it is pricing a new financing and underwriting cycle for frontier-tech assets. If the implied AI take-rate is accepted, the beneficiaries are less the issuer itself than the capital-markets toll collectors and the adjacent “picks and shovels” ecosystem: bulge-bracket underwriters, private-market holders seeking monetization, and hyperscale suppliers that can sell into a suddenly legitimized demand curve. That matters because the tradeable impact shows up first in fee pools and sentiment spillovers, not in the long-dated operating numbers being quoted.

The second-order risk is reflexivity. A mega-IPO with aggressive long-dated revenue optics can temporarily widen the spread between public-market multiples and realistic cash-flow generation for other AI/space names, especially those with weaker balance sheets or less credible monetization paths. That creates a late-stage froth dynamic where winners are determined by access to capital, not just fundamentals, and where any disappointment at the roadshow can hit “AI narrative” names harder than the issuer itself because they trade on similar scarcity premia.

The key catalyst window is days to weeks, not years: bookbuilding, anchor allocations, and early aftermarket performance will tell us whether this is a true institutional bid or a momentum-led launch. If the deal prices too tightly, expect a short-lived squeeze in underwriters and AI proxy names; if it is met with pushback, the unwind could rotate into the most speculative profitable small-cap AI beneficiaries first. The contrarian view is that the Street may be overestimating how much of this revenue can be translated into durable, high-margin cash flow; that gap between narrative and monetization is exactly where post-IPO mean reversion usually starts.

Key Decisions for Investors

• Long MS / GS into the roadshow completion window, with a 2-4 week horizon; upside is fee-led and sentiment-driven, while risk is limited to deal failure or aggressive pricing that dents aftermarket enthusiasm.
• Pair trade: long MS, GS vs short a basket of high-multiple AI narrative names with weaker earnings quality (use SMCI and APP as proxies) over the next 1-2 months; thesis is that capital will rotate toward quality intermediaries if the IPO validates risk appetite.
• Consider a tactical short-dated call spread on SMCI or APP only if the IPO books strongly and the first pricing print is rich; this is a momentum-sensitive hedge against a temporary AI-beta squeeze, with defined premium risk.
• If the IPO is priced at a large valuation discount to the quoted long-dated revenue path, fade the initial pop in the first 3-5 sessions via a short-term put spread on the most levered sentiment names rather than the issuer itself.