Following a sustained post-IPO pullback, SpaceX (SPCX.US) shares have reached a level where the market seems to have completely ignored the value of its artificial intelligence (AI) business. Morgan Stanley believes the current market pessimism represents a clear disconnect from the company's fundamentals, presenting an attractive entry point for investors.

Since completing its massive $86 billion IPO in mid-June, SpaceX shares have experienced significant volatility. After surging nearly 50% in the first three trading days, the stock has steadily declined, falling to $110.85 this week, roughly 18% below its issue price.

Morgan Stanley analyst Adam Jonas noted in a recent report that while market sentiment has worsened, SpaceX's fundamentals have not changed materially, making the current valuation highly compelling. Jonas pointed out that many investors anticipate the stock could fall further to around $100 as the first lock-up period expires next month, potentially prompting some internal shareholders to sell shares.

He argues that if the stock drops to that level, the market is effectively assigning no value—or even negative value—to the company's AI business. Jonas has set a price target of $300 for SpaceX, with over half of that valuation coming from its AI operations. He stated that the market is currently significantly undervaluing AI assets like Grok and Cursor, with many investors believing these ventures carry enormous capital expenditure requirements, uncertain business models, and heavy management resource demands compared to the aerospace and satellite communications segments.

The recent pullback in SpaceX's stock price is also closely tied to broader market shifts. As investors worry about the need for trillions of dollars in AI infrastructure spending, combined with escalating US-Iran tensions driving up oil prices and fueling inflation concerns, capital has recently flowed out of tech companies heavily investing in AI infrastructure, putting pressure on risk assets overall.

Despite this, Wall Street broadly remains bullish on SpaceX. Data shows that roughly 80% of analysts covering the stock rate it a Buy or equivalent, with a consensus average price target of around $232, implying more than double the upside from current levels. Beyond Morgan Stanley, investment banks involved in SpaceX's IPO, including Goldman Sachs, Bank of America, Citigroup, and JPMorgan, all rate the stock a Buy.

Jonas remains one of Wall Street's most optimistic analysts. Among the 33 analysts tracked by media, his $300 target is the third highest. Jonas is known for his long-standing bullish stance on Tesla (TSLA.US), having previously served as an auto industry analyst and publishing several influential research reports on the company. Last year, he shifted his focus to AI and humanoid robotics. In his latest report, Jonas reiterated a Buy rating for SpaceX, stating that the company holds unique competitive advantages across rocket launch, satellite communications, and AI, and that the current valuation offers a favorable opportunity for investors to position themselves.