After SpaceX Stock Plunge, Buying Opportunity Emerges? Tesla Bull: Market Has Almost Ignored AI Value

Morgan Stanley analyst says SpaceX's (SPCX-US) recent sharp stock decline has approached a level implying the market is almost not valuing its artificial intelligence (AI) business at all, suggesting an attractive investment opportunity has now emerged.

The company, operating across rocketry, space, and AI, has seen volatile stock performance since completing its $86 billion initial public offering (IPO) in mid-June. Shares surged nearly 50% in the first three trading days post-listing but have since declined steadily, hitting a low of $110.85 earlier this week—about 18% below its $135 IPO price.

SpaceX closed Friday (24th) down 2.7% at $115.07 per share.

Morgan Stanley analyst Jonas wrote in a report: "We believe current market sentiment is increasingly pessimistic, but company fundamentals have barely changed. This divergence offers investors an attractive entry opportunity."

Jonas noted that many investors expect SpaceX's stock to fall further to $100 as the first tranche of lock-up shares expires next month, allowing insiders to sell. If the stock reaches that level, it would imply the market is assigning near-zero or even negative value to SpaceX's AI operations.

Jonas's target price for SpaceX is $300, with over half of that valuation derived from its AI business.

"Most investors we've spoken to are heavily discounting Grok and Cursor," he said. "Many believe that due to the massive capital expenditures required, the AI business model remains uncertain compared to space and satellite communications, and given management's significant time investment, its value could even be zero or negative."

SpaceX's recent stock plunge aligns with a broader market shift toward caution on tech stocks. While many large tech firms have pledged hundreds of billions for AI and infrastructure, investors are increasingly questioning returns. Additionally, rising U.S.-Iran tensions have pushed oil prices higher, exacerbating inflation concerns and reducing appetite for high-risk assets.

Nonetheless, Wall Street remains broadly optimistic about SpaceX. According to Bloomberg, nearly 80% of analysts covering the company rate it a "Buy" or equivalent, with an average target price of around $232—implying over 100% upside from current levels.

Major investment banks that co-underwrote SpaceX's IPO—including Goldman Sachs (GS-US), Bank of America (BAC-US), Citigroup (C-US), and JPMorgan Chase (JPM-US)—all maintain buy-equivalent ratings.

Among them, Morgan Stanley's Jonas is one of the most bullish on Wall Street. His $300 target ranks third-highest among the 33 analysts tracked by Bloomberg.

Jonas is known for his long-standing bullish stance on Tesla (TSLA-US), having published several reports that significantly moved its stock, including naming Tesla the top pick in the U.S. auto sector two years ago. He stepped back from auto research last year to focus on AI and humanoid robotics.

In his latest report, he reiterated the Buy rating on SpaceX: "SpaceX has unique advantages in rocket launch, satellite communications, and AI. We believe the current valuation offers a highly attractive positioning opportunity."

SpaceX is set to release its first post-IPO earnings report on August 4. After that, a large volume of previously restricted shares will be released in phases, with tens of billions of shares expected to enter the market. With demand already weak, the increased supply could further pressure the stock.

Renaissance Macro analysts noted that SpaceX's phased lock-up release is more investor-friendly than the typical 180-day full unlock, but it cannot fully eliminate selling pressure. Historical trends show that large lock-up expirations often weigh on momentum stocks in the weeks before and after the event.