Morgan Stanley Bullish on SpaceX, but Short-Selling Guru Chanos Cools Enthusiasm: Burning $84 Billion Annually, Positive Cash Flow Unlikely Before 2035

Prominent short-seller and founder of Kynikos Associates, Jim Chanos, recently called out Morgan Stanley's latest research report on SpaceX via X, pointing to hidden financial risks. Although Morgan Stanley assigns SpaceX an 'Overweight' rating and a $300 per-share target price, its report explicitly warns in the 'Funding Risk' section that SpaceX will not generate positive free cash flow before 2035. It forecasts an average annual external financing need of approximately $84 billion between 2027 and 2034, totaling nearly $672 billion over eight years.

Morgan Stanley analysts note SpaceX's massive investments in physical infrastructure, including Starlink satellite deployment and Starship development, projecting that capital expenditures could peak at $300 billion in a single year by 2031. If debt markets cannot absorb such enormous funding demands, SpaceX may be forced to 'issue more equity, reduce growth investments, or slow project timelines,' listing funding capability as 'one of the biggest risks to its financial forecasts.'

Under a base-case scenario, Morgan Stanley projects SpaceX's revenue to reach $3.3 trillion by 2040. However, due to high capital barriers, it provides a wide valuation range: a bear-case target price of $75 per share and a bull-case of $600.

Chanos remarked that recommending a $300 target while acknowledging the need for hundreds of billions in external funding over six years presents a 'fascinating contradiction between bullish outlooks and potential financial strain.' His critique has prompted the market to reassess the capital intensity and liquidity risks behind large-scale infrastructure projects by private unicorn companies.