Morgan Stanley says the recent decline in SpaceX shares has created an attractive buying opportunity, arguing that investors are assigning little or no value to the company’s artificial intelligence operations.

The assessment follows a sustained pullback in SpaceX’s share price after its mid-June stock market debut. SpaceX raised $86 billion through its initial public offering, and its shares rose almost 50% during the first three trading sessions before reversing direction.

The stock later fell to a low of approximately $110.85, leaving it about 18% below its IPO price. Despite the decline, Morgan Stanley analyst Adam Jonas said the company’s underlying fundamentals have not materially weakened.

Morgan Stanley Maintains Buy Rating on SpaceX

Jonas maintained a “buy” rating on SpaceX and set a $300 price target for the stock. More than half of that valuation is reportedly tied to SpaceX’s AI business.

According to the analyst, the market is heavily discounting AI-related assets linked to the company, including Grok and Cursor. Investors have raised concerns about the high cost of developing AI infrastructure, uncertain revenue models and the risk that artificial intelligence projects could distract management from SpaceX’s aerospace and satellite communications businesses.

Those concerns reflect a wider debate around AI-heavy companies, where investors are weighing long-term demand for AI tools against the near-term capital required for chips, data centers, power and talent. For SpaceX, the valuation debate is also complicated by the company’s mix of businesses, spanning launch services, satellite communications and AI-related assets.

Jonas said those concerns have become excessive. He argued that a decline toward $100 per share would effectively imply that investors are assigning no value, or even a negative value, to SpaceX’s AI operations.

Some investors also expect additional selling pressure as early shareholder lock-up agreements begin to expire. Those expirations could allow employees, insiders and other early investors to sell shares, potentially increasing the amount of stock available in the market. Lock-up expirations are closely watched after IPOs because they can temporarily change supply-demand dynamics even when a company’s operating outlook is unchanged.

Broader AI Stock Pressure Adds to Decline

SpaceX’s share-price weakness has coincided with a broader pullback in technology companies making large investments in AI infrastructure. Investors have focused on the hundreds of billions of dollars needed to build data centers, computing systems and energy infrastructure for artificial intelligence. Rising oil prices, inflation concerns and geopolitical tensions have added further pressure to risk-sensitive assets.

Even so, Wall Street analysts are reportedly still largely positive on SpaceX. Goldman Sachs, Bank of America, Citi and JPMorgan have all assigned the company a “buy” rating following its IPO.

Jonas remains among the most bullish analysts covering the stock. He said SpaceX has multiple competitive advantages across rocket launches, satellite communications and artificial intelligence.

Source: https://coinpaper.com/33488/morgan-stanley-says-spacex-ai-valuation-is-being-overlooked