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Space Exploration Technologies (SpaceX) could see its stock price more than double as investors begin to price in the company’s expanding artificial intelligence division, according to a Morgan Stanley report issued Monday by analyst Adam Jonas. The Wall Street firm maintained an overweight rating and a $300 price target on the stock, pointing to the $60 billion acquisition of AI coding startup Cursor and the recent merger with xAI as major catalysts for future growth.
Morgan Stanley Targets $300 Valuation on AI Integration
On June 12, CEO Elon Musk’s $2 trillion initial public offering for SpaceX was managed by Morgan Stanley, which acted as a lead underwriter. According to Jonas, very few investors are currently bullish on the company’s artificial intelligence business beyond basic neocloud services.
"As investors see more breadcrumbs on the Cursor/Grok story, we see potential for the implied valuation discount on SpaceX’s AI business to lift, driving potentially substantial appreciation of the stock," Jonas wrote to clients.
Following the June IPO, SpaceX agreed to acquire Cursor for $60 billion in stock. Cursor develops a widely used AI coding tool that has achieved rapid enterprise adoption. Data from Morgan Stanley shows that more than 60% of Fortune 500 companies and 50,000 total enterprises utilize the coding platform. That high usage rate has driven significant financial returns, with Cursor reporting annualized revenue topping $1 billion in November 2025.
"The catalyst path is shaping up elegantly, in our opinion, as more progress on Cursor can be shared following closing of the transaction (expected within next few weeks) and we see further milestones with subsequent model releases," analyst Adam Jonas wrote in his Monday client report.
Morgan Stanley
Wall Street Consensus and Recent Market Performance
The bullish outlook from Morgan Stanley aligns with broader sentiment across the financial sector. Out of 36 analysts covering SpaceX, 29 currently rate the stock a buy or strong buy.
Despite the positive analyst sentiment, SpaceX shares have faced downward pressure recently. The stock traded down about 6% over the trailing month, hovering just above its June IPO price of $135. However, additional investment bank coverage highlights strong underlying business segments. Citi reported that SpaceX’s second-quarter 2026 financial results exceeded expectations across all three main operating segments, with adjusted EBITDA for the AI division beating bank estimates by nearly $1.5 billion. Citi currently rates the stock a buy with a $200 price target.
Other financial institutions have adjusted their outlooks upward. Argus Research analyst Steve Silver upgraded SpaceX from a hold to a buy with a $160 price target, while Bernstein raised its price target for the company from $239 to $248.
Pro Tip: When evaluating high-growth aerospace and AI conglomerates, monitor upcoming product releases and transaction closing dates, as these milestones frequently serve as near-term catalysts for institutional revaluation.
Insider Share Lock-Up Expiration and Terafab Investment
SpaceX recently navigated a major test of market liquidity when its first batch of 911.5 million insider restricted shares unlocked, releasing roughly $100 billion in market capitalization. Despite expectations of a widespread sell-off, market demand absorbed the supply. SpaceX closed up 6.14% on Thursday following the unlock, posting a full-day trading volume of 255 million shares and a trading value of $28.2 billion—the highest turnover rate since July 7.
Jonas characterized the share unlock as an entry opportunity rather than a warning signal, describing SpaceX as "a potential generational compounder capable of converting energy into networked/swarm intelligence at scale."
Concurrently, SpaceX and Tesla announced an initial investment of $16.8 billion to construct Terafab, an integrated artificial intelligence semiconductor factory located in Grimes County, Texas. The facility aims to address projected deficits between global chip supplies and the more than 1 terawatt of computing power SpaceX and Tesla expect to require in coming years. Official company announcements indicate that future expansion phases will increase total capital deployment while creating at least 3,000 jobs.
Did You Know? Cursor’s coding platform surpassed $1 billion in annualized revenue in November 2025, driven by adoption across more than half of all enterprises in the Fortune 500.
Frequently Asked Questions
What is driving Morgan Stanley’s $300 price target for SpaceX?
Morgan Stanley attributes the potential for stock appreciation to the expansion of SpaceX’s artificial intelligence business, specifically the acquisition of coding startup Cursor and its merger with xAI.
How has the market reacted to the recent insider share unlock?
Despite the release of 911.5 million restricted shares representing about $100 billion in market capitalization, SpaceX stock rose 6.14% on heavy trading volume, avoiding the anticipated sell-off.
What is the Terafab project?
Terafab is a joint $16.8 billion semiconductor manufacturing facility in Grimes County, Texas, backed by SpaceX and Tesla to supply future computing power required for artificial intelligence operations.
What percentage of Fortune 500 companies use Cursor?
According to Morgan Stanley data, more than 60% of Fortune 500 companies utilize Cursor’s AI coding tool.
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