On Wednesday, SpaceX (SPCX.US) shares surged more than 5% in early trading, reaching $140.13, and have accumulated a gain of nearly 30% from their post-listing low. This rally comes after Elon Musk made a bold statement during a SpaceX all-hands meeting, projecting that AI revenue would "definitely" surpass all other SpaceX business segments by September of this year. He also set a target to achieve 10 gigawatts of AI computing power by the end of next year, which could unlock potential annual revenue of $300 billion to $500 billion.

Musk declared, "We must win in AI; the future will be a world of AI and robots." This marks his most explicit timeline and scale forecast for SpaceX's AI operations. He further elaborated, "In the long run, within the next four to five years, AI will account for 99% of SpaceX's value. I dare say that in five years, AI will represent 99% of SpaceX's value, and SpaceX's total value will be astronomical."

Morgan Stanley analysts believe the market has been overly conservative in pricing SpaceX's AI business. They note that after stripping out the space operations, the implied valuation for AI is only about $12 per share. The acquisition of Cursor is seen as a crucial step in building an end-to-end enterprise AI platform, leveraging synergies in computing power, data, and the ecosystem. Cursor's annual recurring revenue is projected to reach $33 billion by 2030. Morgan Stanley maintains a base target price of $300 per share, with a bull case scenario of $600, representing a potential upside of 350% from the current stock price.