Everyone knows SpaceX because of the massive metal cylinders blasting off from Texas and Florida. You watch the boosters land back on earth, and you think you're witnessing the commercial foundation of a multi-trillion-dollar aerospace empire. Wall Street thinks you're missing the point entirely.
Morgan Stanley analyst Adam Jonas just initiated coverage on the newly public SpaceX stock with a massive $300 price target. This comes right after the company shattered records with its June 2026 IPO on the Nasdaq. If you look closely at the math behind that bullish $300 target, you find a shocking detail. The actual rocket launching business, the space bit that gave the company its name, is valued at a measly $8 per share.
That means the entire global monopoly on rocket launches accounts for just under 3% of what Morgan Stanley thinks the company is worth.
If you bought into the stock thinking you were investing in a futuristic transport company that will ferry humanity to Mars, the market has a harsh reality check for you. You aren't buying a rocket company. You're buying a data and intelligence conglomerate that happens to own its own delivery trucks.
The Rocket Business is Just an Expensive Delivery Truck
To understand why the launch business is valued so low, you have to look at the underlying economics of modern space flight. SpaceX has won the launch wars. The Falcon 9 handles more payloads than the rest of the planet combined. Starship is preparing to scale up completely reusable orbital flights.
That incredible success is exactly why the standalone launch business isn't where the big money is.
Elon Musk has spent the last decade intentionally driving down the cost of getting mass into orbit. Morgan Stanley expects launch costs to collapse by more than 99% compared to historical averages over the next ten years. While that sounds amazing for the space industry, it creates a massive structural paradox for SpaceX as a commercial business.
When you collapse your own pricing structure, you shrink your addressable market for external customers. Jonas notes that while operating margins on launches will likely swing from negative 50% up to a healthy 40% as reusable infrastructure matures, 40% of a tiny market isn't a lot of money.
The launch segment isn't built to maximize external revenue. It functions as an internal cost center. SpaceX builds rockets so it can deploy its own hardware without paying a middleman. The rocket is the delivery truck. You don't value Amazon based on the number of cardboard boxes its vans drop off. You value it based on the prime ecosystem and AWS.
Starlink and the Global Internet Monopoly
If the rockets are only worth $8, where does the other $292 of the stock price come from? The first major answer is Starlink.
The satellite internet constellation has evolved far beyond a niche service for rural cabins and off-grid campers. Wall Street views Starlink as the future connectivity layer for every data-transmitting device on Earth. We are talking about planes, cruise ships, military hardware, and eventually, the billions of internet-of-things devices scattered across global infrastructure.
Morgan Stanley models Starlink pulling in a staggering $687 billion in revenue by 2040. To put that in perspective, the satellite network generated about $11.4 billion last year. That is an explosive growth trajectory that depends heavily on the company's ability to maintain its low-earth orbit real estate.
Because SpaceX owns the launch vehicle, it can dump thousands of satellites into orbit at a fraction of what competitors like Amazon's Project Kuiper or European consortia have to pay. Every time an engine fires, SpaceX builds its moat wider. The data flowing through that network becomes highly valuable because it bypasses traditional terrestrial fiber optic networks, offering lower latency across long distances.
The Real Play is Ground and Space Compute
The biggest surprise in the recent Wall Street research notes isn't about satellites or rockets at all. It centers on physical artificial intelligence infrastructure.
The mega-merger between SpaceX and Musk's AI startup xAI changed the entire thesis for institutional investors. Wall Street is looking at a massive, vertical integration of energy, compute, and space real estate.
Jonas argues that the market completely ignores the speed and cost efficiency with which SpaceX can build terrestrial data centers. Because the company controls its own supply chains and manufacturing, it can build compute clusters faster than traditional tech giants. The revenue from these AI services is projected to balloon from roughly $3.2 billion to nearly $190 billion by 2030. High-profile data contracts with companies like Google and Anthropic show that this isn't just theory. The run-rate numbers are real, and they are scaling right now.
The plan gets wilder when you look out toward 2028. The company is laying the groundwork for orbital compute deployments. These are data centers literally floating in space.
By 2040, Morgan Stanley estimates SpaceX could have 364 gigawatts of computing rigs operational in orbit. That is close to the total operating nuclear capacity of the entire planet today. Running servers in space solves one of the biggest crises facing the AI industry on earth: electricity and cooling. In orbit, solar power is abundant, and the cold vacuum offers an interesting environment for heat rejection, provided the thermal engineering holds up.
If SpaceX successfully shifts massive AI workloads into orbit, it stops being an aerospace company. It becomes the foundational utility company for the global intelligence economy.
Navigating the Musk Risk and Corporate Overlap
Investing in this vision isn't a straightforward bet. There are major corporate governance issues that you need to watch closely.
Elon Musk controls roughly 42% of the equity in SpaceX but holds more than 80% of the voting power due to a dual-class share structure. He can do whatever he wants, regardless of what public shareholders think. The merger with xAI is a perfect example of this dynamic. The deal valued xAI at $125 billion and folded it into the broader corporate structure, a move that critics argue served to rescue a capital-intensive AI startup by backing it with stable Starlink cash flows.
There are also immense conflicts of interest with Tesla. Both companies rely on heavy compute clusters. Both are working on physical robotics and autonomous systems. Musk has a habit of shifting engineering talent and expensive Nvidia microchips between his various entities based on current priorities.
If you own the stock, you have to accept that you are buying into a chaotic ecosystem. The dependencies on a single individual are absolute. If Musk faces health issues, political blowback, or regulatory crackdowns, the premium built into the stock price could evaporate overnight.
How to Position Your Portfolio Around the New Space Economy
You shouldn't buy the stock expecting a pure-play space exploration asset. If you want to build a position in the company now that it trades on the public markets, you need to treat it like a speculative technology conglomerate.
Diversify your exposure. Do not make this a core holding that dictates the health of your retirement savings. The valuation relies on assumptions about technologies that do not exist at scale yet, like commercial orbital data centers and fully realized space-to-earth physical AI systems. Morningstar analyst models place the fair value of the current business closer to $780 billion, suggesting the current market price is heavily inflated by retail hype.
Watch the quarterly earnings data closely. The absolute best way to gauge if the Morgan Stanley thesis is right is to ignore the rocket launch schedules and look at the non-satellite enterprise revenue. If the cloud compute contracts and data center buildouts slow down, the $300 price target falls apart.
Focus your eye on the data infrastructure. That is the metric that matters. The rockets make for great internet videos, but the unglamorous data centers on the ground and the silent satellites in orbit are the things that will actually pay for your investment.
