Morgan Stanley analyst Adam Jonas pointed out that many investors anticipate SpaceX's share price could fall to $100 once the first lock-up period expires. According to his analysis, a drop to that level would imply the market is assigning zero value to SpaceX's artificial intelligence operations. Jonas has set a price target of $300, with over half of that valuation derived from AI, arguing that the market significantly underestimates the worth of Grok and Cursor.

The analyst stated that SpaceX's recent stock decline has brought it near a level where investors are effectively giving no credit to its AI business. After completing a record-breaking $86 billion IPO in mid-June, SpaceX's shares have had a volatile trading history. While the stock surged nearly 50% in the first three sessions, it has since steadily retreated. On Thursday, the price touched a low of $110.85, down 18% from the IPO price, before closing at $115.07 on Friday.

Adam Jonas wrote in a client note on Friday, "We see a clear disconnect between the growing pessimism among investors and the largely unchanged fundamentals of the company, which creates an attractive opportunity to buy SpaceX shares." He noted that many investors expect further declines, potentially pushing the stock to $100 after the first lock-up period next month, when some insiders will be allowed to sell their shares.

Jonas argued that if the stock reaches $100, investors would be pricing SpaceX's AI business at zero or even negative value. He assigned a $300 price target, with more than 50% of the valuation coming from the AI segment. He wrote, "Most investors we speak with significantly underestimate the value of Grok and Cursor. Many see AI as having zero or negative value, due to the massive capital required and the uncertainty around its business model and profitability compared to the space and connectivity businesses."

Investors Reducing AI Positions, Analyst Remains Bullish on SpaceX

The decline in SpaceX's shares coincides with a broader reduction in investor allocations to tech stocks, particularly those committing billions to building AI models and related infrastructure. A weak macroeconomic environment and rising tensions between the US and Iran have pushed up oil prices, fueling concerns about inflation and dampening risk appetite.

Despite this, Wall Street analysts remain broadly bullish on SpaceX, according to data compiled by Bloomberg. Nearly 80% of analysts covering the stock rate it a "buy," with an average target price of around $232, implying the stock has more than double its current level in upside potential. The four other major banks involved in SpaceX's IPO—Goldman Sachs, Bank of America, Citigroup, and JPMorgan Chase—have all given it equivalent "buy" ratings.

Morgan Stanley's Jonas, a Long-Time Tesla Bull, Sets SpaceX Target at $300

Among Wall Street analysts bullish on SpaceX, Morgan Stanley's Jonas is one of the most optimistic. His $300 price target is the third highest among the 33 analysts tracked by Bloomberg. Jonas is known for his aggressive bullish stance, particularly his long-term support for Tesla, where he previously served as an auto analyst. His bold calls on Tesla have often triggered significant stock price moves, such as when he named it a top US auto stock two years ago.

Last year, Jonas shifted his focus from automotive research to covering artificial intelligence and humanoid robotics. He remains bullish on SpaceX, reiterating an equivalent "buy" rating in his Friday note. Jonas stated, "SpaceX has unique advantages in launch services, connectivity, and AI. We believe the current valuation presents an attractive entry point."