Morgan Stanley analyst Adam Jonas wrote that investors have only a few weeks of window to seize the buying opportunity in SpaceX. After a well-known bullish Wall Street analyst issued a buy recommendation, SpaceX shares received a significant boost.
Jonas published a research report titled "SPCX: At $159 Now, Valuation Is Low and Getting Cheaper," reaffirming an Outperform rating with a price target of $300. He stated that before a series of major milestone events arrive, investors have only a few short weeks to seize the buying window for the stock. In early trading on Monday, SpaceX shares surged 5%.
Jonas said: "We believe that in the coming weeks (before the 15th Starship test flight), investors will have a rare opportunity to buy this unusually cheaply valued stock." SpaceX has just completed its 14th Starship test flight, with Starship reaching low Earth orbit for the first time and successfully deploying Starlink satellites.
The senior Morgan Stanley analyst also expects that multiple business developments in the coming months will give investors a clearer picture of SpaceX's role in artificial intelligence and chip manufacturing, "potentially unlocking the company's earnings growth and driving up its stock valuation multiples."
Jonas faces a major practical challenge in trying to convince investors to buy the stock: most investors do not understand the technical difficulties SpaceX faces. He said he has attended many client meetings, and almost no clients hold this stock. He stated: "Only a very small number of people in the world can understand the engineering challenges of Starship's heat shield, or the internal principles of a full-flow staged combustion rocket engine, and thereby objectively assess its testing progress. And those who can predict how the growth in Token demand driven by intelligent agents will affect computing power pricing are even rarer."
Morgan Stanley uses a sum-of-the-parts valuation method to analyze SpaceX. The report shows that the vast majority of investors only fully assign value to the "Space and Connectivity Business" (Starlink). Jonas explained that if one evaluates SpaceX only from the perspective of AI computing power or a telecom operator (Starlink), while ignoring the complex rocket launch business, one would conclude that the stock is overvalued.
According to Jonas's sum-of-the-parts valuation logic: the market has already fully priced in the space and Starlink connectivity segment, but has not yet assigned value to the AI business opportunity, which includes computing power partnerships, chip manufacturing, and other AI-related businesses. "We believe that subsequent AI product launches, progress in Starship research and development, and the new-generation cloud business (neocloud) continuing to secure new contracts at $30-50 per watt are all upward catalysts that could drive the stock price toward our $300 per share target."