SpaceX shares near level Morgan Stanley says erases AI bet

SpaceX shares are trading near levels that Morgan Stanley says leave little value for AI after a sharp slide from its June IPO.

The bank’s case rests on a valuation gap: investor mood has weakened faster than the company’s reported fundamentals. Morgan Stanley analyst Adam Jonas wrote Friday, "We believe the current disconnect between increasingly bearish investor sentiment and largely unchanged fundamentals creates an attractive entry point in SpaceX shares."

AI value drives valuation gap

Jonas carries a $300 price target on the stock, with more than half of that target tied to SpaceX’s AI segment. That makes the AI debate central to the stock’s post-IPO reset, not a side issue for model builders.

Many investors expect the shares to fall toward $100 when the first lockup expires next month, according to Jonas. At that price, he argues, the market would be assigning zero or even negative value to the AI operation.

The pressure point is not whether AI is strategically fashionable; it is whether Grok & Cursor can justify the capital they may require. Jonas wrote, "Most investors we speak with significantly discount Grok & Cursor," adding that many give the AI unit no value because of heavy capex needs, uncertain economics and management attention diverted from Space & Connectivity.

June offering meets fast reversal

SpaceX raised $86 billion in a record offering in mid-June, according to the source article, then rallied almost 50% in its first three trading sessions. The reversal since then has been sharp: the shares touched $110.85 earlier this week, 18% below the IPO price.

That kind of price action puts the company in a difficult window. A hot debut created expectations for scarcity and growth; the subsequent slide has made the market focus instead on dilution risk, lockup supply and whether AI spending will consume cash before it produces reliable returns.

The selloff also fits a wider shift in risk appetite. The source article linked the move to a broader pullback from technology companies planning hundreds of billions of dollars of AI infrastructure spending, while higher oil prices and US-Iran tensions have added inflation pressure to the market backdrop.

Banks still lean bullish

Wall Street coverage remains heavily positive despite the share decline. Data cited in the source article showed nearly 80% of analysts covering SpaceX recommend buying the stock, while the average price target of about $232 would imply the shares more than double from recent trading levels.

Goldman Sachs Group Inc., Bank of America Corp., Citigroup and JPMorgan Chase & Co., which helped lead the offering with Morgan Stanley, have all issued buy-equivalent ratings. Jonas is still among the most aggressive bulls, with the third-highest target among 33 analysts cited in the source article.

The split is really over how to price optionality. Space and connectivity may offer investors a clearer revenue story, while AI adds a larger but harder-to-model claim on future value, especially if capex rises before margins become visible.

Lockup supply tests AI case

If the lockup expiry pushes the stock toward $100, the immediate company effect would be a weaker public valuation and a tougher test for Jonas’s AI-led target. For the wider AI sector, that would sharpen pressure on companies with large infrastructure budgets to show unit economics rather than narrative momentum; at the macro level, it would reinforce the current preference for lower-duration, less rate-sensitive assets.

If the stock stabilizes above the recent low and investors accept that fundamentals have not changed materially, SpaceX would have more room to defend its AI valuation. The broader sector would get a modest reprieve from capex skepticism, while the macro read-through would be narrower: less a growth rebound than a sign that investors are willing to pay for AI where the core business still has credibility.

The next markers are concrete: the lockup expiration next month, any disclosure on AI capital intensity, and evidence that Grok & Cursor can move from optionality to economics. Until then, SpaceX shares are trading less like a simple space story and more like a referendum on how much public markets will pay for AI before the cash flow is visible.