SpaceX Stock Is Down 33% From Its High. Here's Why Morgan Stanley Thinks There's 106% Upside From Here.

SpaceX shares have fallen 36% from their post-IPO peak, reducing its market capitalization from nearly $2.8 trillion to just under $2 trillion after the company raised more than $85 billion in its June IPO. Morgan Stanley reiterated its buy rating and $300 target on Sept. 15, implying more than 100% upside over 12 months. The bank attributes roughly half of its target to AI, while SpaceX estimates AI represents $26.5 trillion of its $28.5 trillion total addressable market and over 90% of long-term growth potential.

Analysis

The key investable issue is not the analyst target but whether SPCX can convert a capital-intensive infrastructure narrative into AI revenue with software-like margins. At a roughly $2T equity value, the market is underwriting a material share of future AI compute economics; any evidence that satellite/orbital compute remains a cost center rather than a lower-cost inference platform should compress the multiple sharply. The claimed addressable-market framing is not a revenue forecast and should be discounted until verified against customer contracts, power economics, utilization, and disclosed segment contribution.

Over the next days, the post-IPO drawdown creates a reflexive setup: analyst reiterations can support sentiment, but lockup dynamics, index eligibility and passive-fund demand will matter more than a target-price revision. Over 1-3 months, the relevant catalyst path is first post-listing results: recurring broadband revenue, launch cadence and margin, AI-related bookings, capex intensity, and financing needs. A 6-18 month bull case requires demonstrated cost-per-compute or latency advantages versus terrestrial hyperscalers; otherwise NVDA and the incumbent cloud platforms retain the economic rents while SPCX bears network buildout risk.

Contrarian view: the selloff may still be under-discounting execution and capital-cycle risk, because vertical integration is an advantage only if it lowers delivered compute cost after launch, replacement, spectrum, and ground-network expense. Conversely, a verified long-term enterprise AI contract or an independently measured cost advantage could force a rapid rerating given limited public-market pure-play exposure. MS benefits modestly from trading, market-making and potential capital-markets activity, but its earnings sensitivity is too small for the research call to be a standalone catalyst.

Key Decisions for Investors

• Do not initiate a directional SPCX position solely on the $300 target. Establish a research alert ahead of the first earnings release; require disclosed AI revenue/bookings, segment gross margin and capex-to-revenue trajectory before underwriting a 12-month long.
• If SPCX rallies more than 20% into first results without verifiable AI monetization metrics, consider a 1-3 month short or put spread, sized small for post-IPO borrow/volatility risk. Cover if management discloses contracted AI capacity with credible counterparties or guidance implies positive incremental gross margin.
• For AI exposure, prefer NVDA over SPCX over the next 1-3 months: NVDA captures near-term hardware demand with observable orders, while SPCX remains an execution-duration asset. Reassess the relative trade if SPCX demonstrates a delivered-compute cost advantage or material external AI backlog.
• Monitor registration statements, lockup expiration dates, insider-sales disclosures, free float and index-rebalance eligibility. These technicals can dominate fundamentals in the first 6-12 months and are missing from the current signal.