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SpaceX stock could hit $300 as Morgan Stanley sees AI growth opportunity
Morgan Stanley sees SpaceX stock hitting $300 as investors overlook its AI potential, Cursor deal, Starlink growth and Starship opportunity.
SpaceX started trading publicly on June 12 with an IPO price of $135 per share. The stock opened at $150 and quickly climbed to $225 as investors rushed to buy shares. But the early excitement did not last. The stock has now fallen back to around $150, nearly 35% below its early high after about two months of trading.
Morgan Stanley has given SpaceX a $300 price target. The investment bank believes investors are not fully valuing SpaceX's artificial intelligence business. Analysts led by Adam Jones said the value being given to SpaceX's AI business at the current stock price is "extremely conservative," according to a Morgan Stanley research note. The analysts believe the AI business could eventually be worth much more than investors currently expect.
SpaceX AI business
Morgan Stanley said very few investors it spoke with are bullish on SpaceX's AI business beyond its neocloud operations. Neocloud refers to specialized cloud and data-center services built mainly for AI workloads. SpaceX already has data-center leasing deals involving Anthropic and Alphabet, according to The Motley Fool. Morgan Stanley believes these existing AI deals may be only the beginning of SpaceX's larger AI opportunity.
Starship launch plans
SpaceX's Space segment includes its rocket business and launch operations. The company uses reusable rockets, which can reduce launch costs and allow rockets to be used again more quickly. SpaceX had completed 78 launches in 2026 by the end of the second quarter. But the rocket business is still losing money. The Space segment generated $962 million in revenue during the second quarter but recorded a $542 million loss, according to the figures cited in the The Motley Fool.
SpaceX's massive Starship vehicle could become operational as early as the fourth quarter. Starship is expected to be much larger than SpaceX's current rockets. Lower launch costs could make space launches more attractive and increase demand.
Starlink subscribers
SpaceX's Connectivity segment is built around Starlink, its satellite internet and mobile connectivity business. Starlink uses thousands of satellites in low Earth orbit to provide internet and mobile services, including in remote areas. Starlink currently has about 12 million subscribers and around 10,200 satellites in orbit. Elon Musk believes the arrival of Starship could help Starlink expand faster by allowing SpaceX to put more satellites into orbit and reach more locations.
Starlink's Connectivity segment generated $4.29 billion in revenue in the second quarter. It also produced $1.65 billion in income, making it SpaceX's only profitable business at present.This gives SpaceX an important source of cash while it continues spending heavily on rockets, satellites and AI.
The biggest potential opportunity may be SpaceX's artificial intelligence business. SpaceX estimated in its prospectus that the Enterprise AI market could represent a $22.7 trillion opportunity. This market includes AI software that can automate work, improve productivity and help businesses complete tasks more efficiently, according to The Motley Fool. Morgan Stanley believes investors are not giving this potential enough value today.
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Cursor AI acquisition
Shortly after going public, SpaceX announced plans to buy AI startup Cursor for $60 billion. Cursor operates an AI coding tool that can generate software code using agentic AI. The tool is already used by major technology companies, including OpenAI, Nvidia and Adobe. The acquisition could give SpaceX a much bigger position in the AI software market.
Morgan Stanley believes investors may be underestimating what the Cursor acquisition could add to SpaceX. The analysts also pointed to new Grok AI models that use Cursor data as another reason for optimism. They believe the combination of Cursor's technology, data and Grok could strengthen SpaceX's wider AI business. In simple terms, Morgan Stanley sees Cursor as more than just another acquisition. It could become an important part of SpaceX's AI strategy.
Cursor's annual revenue run rate was around $4 billion in June, according to the analysts cited in the The Motley Fool. Morgan Stanley expects that figure to reach $8 billion by the end of 2026. The analysts then expect Cursor's annual revenue run rate to rise to $17 billion in 2027. By 2028, they project it could reach $33 billion. If those projections are achieved, Cursor could become a major revenue driver for SpaceX.
SpaceX stock outlook
The Motley Fool's analysis also warns that SpaceX has a long and expensive road ahead. The company is expected to spend heavily on AI, rockets, Starship, Starlink and other projects. Investors have recently become less willing to reward companies that spend huge amounts on AI without showing strong results, according to the analysis. That could become a problem for SpaceX if its AI investments take years to generate meaningful profits.
SpaceX is expected to record significant losses in the coming years as it continues investing in its businesses. Goldman Sachs, SpaceX's lead underwriter, has projected that the company could have negative free cash flow of $105 billion in 2029 before its finances improve. This means SpaceX may need to spend enormous amounts of money before its newer businesses start producing stronger returns. The large cash burn is one of the biggest risks to the bullish SpaceX stock story.
Morgan Stanley sees $300 per share as a realistic target because it believes the market is undervaluing SpaceX's AI potential. Starlink already provides a profitable business, while Starship could transform the company's rocket operations. The planned Cursor acquisition gives SpaceX another major opportunity in AI and could strengthen Grok. But SpaceX faces huge spending needs and potentially massive cash losses before those bets pay off. The key question for investors is whether SpaceX can turn its AI, Starlink and Starship ambitions into actual profits. If it can, the stock could have significant upside; if it cannot, the $300 target could remain difficult to reach.
