Morgan Stanley Sets $300 Price Target for SpaceX Stock

Morgan Stanley analysts set a $300 price target for Space Exploration Technologies Corp. stock, arguing that investors are undervaluing the company's artificial intelligence potential. SpaceX shares currently trade near $140, representing a decline of nearly 35% since the company's initial public offering on June 12.

The investment bank's bullish outlook is driven by the pending $60 billion acquisition of AI start-up Cursor. This move is expected to enhance the Grok large language model and significantly increase annual revenue.

Financial risks remain a concern despite the AI optimism. While the Connectivity segment led by Starlink is the only profitable division, the Space segment continues to operate at a loss. Goldman Sachs Private Wealth Management, the lead underwriter, projects that SpaceX will face negative free cash flow of $105 billion by 2029 due to heavy spending on rocket development and AI.