SpaceX’s shares have fallen so sharply that the market is effectively ignoring the value of its AI business, analysts at Morgan Stanley say. Trading near $100, the stock price suggests investors assign near-zero worth to the AI division merged from Elon Musk’s xAI earlier this year.
Market Valuation Behind the Numbers
Following the February 2026 merger, SpaceX combined with xAI under a valuation around $1.25 trillion, aiming for an IPO price near $1.75 trillion. Previous funding rounds had priced shares at $421 each, tied to an $800 billion valuation and a $2.56 billion investment. Now the shares sit at roughly $100, a steep drop that Morgan Stanley calculates wipes out all implied value attributed to the AI business.
That means current pricing reflects only SpaceX’s existing aerospace and Starlink operations. Despite this, Morgan Stanley’s analysts believe the fundamentals behind SpaceX have not weakened materially. In fact, they view this as a solid investment opportunity given the significant undervaluation.
Why Investors Are Selling and What Lies Ahead
The decline appears linked to the lock-up expiration on August 6, 2026, when early investors and insiders can freely sell shares for the first time. Morgan Stanley suggests this increased supply, combined with cooling enthusiasm, led to the selloff, not an underlying drop in business prospects.
The bank’s forecast remains bullish about the AI unit, projecting it could generate around $190 billion in revenue by 2030 and potentially help push overall SpaceX revenues toward $3.4 trillion by 2040. Given these numbers, Morgan Stanley argues that pricing SpaceX’s AI segment at zero is an excessive market reaction.
As locked shares potentially flood the market, prices might dip further, tempting short-term profit-taking. Yet the long-term view from Morgan Stanley stresses the disconnect between current share prices and the business’s future earnings power.
This content is for informational purposes and does not constitute financial advice.
