Morgan Stanley (NYSE: MS) said SpaceX (NASDAQ: SPCX) is nearing a share price at which investors would effectively be assigning no present value to the company’s artificial intelligence business.

The bank’s argument centers on a possible decline to $100 per share, a level many traders are watching as an insider selling window approaches. According to Morgan Stanley analyst Adam Jonas, that price would imply that the company’s AI segment is not being valued at all.

SpaceX shares have struggled after an initially strong debut. The company raised a record $86 billion in its mid-June initial public offering, pricing shares at $135 each. Early demand drove the stock up almost 50% over three trading sessions to more than $225, but the rally did not last.

The stock has since fallen below its IPO price and is now trading at $110.85, about 18% under the offering level.

Morgan Stanley Links Most of Its SpaceX Valuation to AI

Jonas maintained a $300 price target on SpaceX, with more than half of that valuation tied to the company’s AI business. In a note on Friday, he wrote, “We believe the current disconnect between increasingly bearish investor sentiment and largely unchanged fundamentals creates an attractive entry point in SpaceX shares.”

The note said many investors are preparing for additional weakness when the lockup period ends next month. SpaceX is scheduled to hold its first earnings call on August 4. On August 6, insiders will be permitted to sell as many as 911.5 million shares.

That release would roughly double the number of shares available for trading and could increase pressure on the stock if early holders choose to sell. Lockup expirations do not require insiders to sell, but they can change the near-term supply of tradable shares and are often watched closely after large IPOs.

Jonas said the market is heavily discounting Grok and Cursor. “Most investors we speak with significantly discount Grok & Cursor,” he wrote. He added, “Many ascribe zero or even negative value for AI given the high capex requirements relative to Space & Connectivity, largely uncertain economics, and the high degree of management time devoted to the business.”

Those concerns extend beyond SpaceX. Investors have also been selling technology companies that plan to commit hundreds of billions of dollars to AI chips, data centers, power infrastructure, networks, and related systems. The debate is partly about timing: AI infrastructure spending is visible immediately in capital budgets, while revenue models and margins can take longer to prove.

Higher oil prices have added to the pressure. Tensions between the United States and Iran have increased inflation concerns, while uncertainty in the broader economy has made traders less willing to hold risk assets, including crypto and high-growth equities.

Wall Street remains broadly positive on SpaceX. Bloomberg data shows that nearly 80% of analysts covering the company rate the stock as a buy. The average price target is about $232, more than double recent trading levels.

Goldman Sachs (NYSE: GS), Bank of America (NYSE: BAC), Citigroup (NYSE: C), and JPMorgan Chase (NYSE: JPM) all assigned buy-level ratings to the stock after helping Morgan Stanley lead the IPO. Jonas is among the most bullish analysts, holding the third-highest target among 33 analysts.

Tesla Losses Add Pressure as Musk Delays Major Product Plans

Sentiment around Elon Musk’s companies shifted within weeks. One month after the SpaceX listing made him the world’s first trillionaire, investors began focusing more closely on the costs attached to his promises.

SpaceX has lost more than $1 trillion in market value from its peak. Even after that decline, its $1.57 trillion valuation and Tesla’s $1.26 trillion valuation keep both companies among the largest publicly traded firms in the United States.

Tesla (NASDAQ: TSLA) also came under pressure. The electric vehicle maker missed earnings expectations, reported negative cash flow for the first time in two years, and its shares fell 14.5% on Thursday. The decline erased about $215 billion from Tesla’s market value.

The results reinforced broader concerns that technology companies are spending heavily on AI before returns from those investments are clear.

During Tesla’s earnings call, Musk pushed back earlier timelines for the Robotaxi service, the Optimus humanoid robot, and the long-delayed electric Semi truck. Those delays matter to investors because product timelines are a key part of how markets assess whether expensive research, manufacturing, and AI investments can turn into commercial businesses.

Investors had been assigning premium valuations to ambitious plans at both companies, supported by Tesla’s position in electric vehicles and SpaceX’s rocket-launch business.

Supporters say Musk identifies markets before they fully develop. Musk has said he wants both Tesla and SpaceX to become major AI companies, even as they continue to compete with businesses that moved into the sector earlier.