|
Wednesday, October 7, 2026 |
|
The Last Page.
The last page, first.
|
|
Morgan Stanley Says SpaceX Is Cheap at $2.3 Trillion
A top Wall Street bull on Musk’s companies sees $300 a share, betting on the AI half of the business. The skeptics say that half is where the money burns.
|
|
Every SpaceX share in your index fund sits in an account somebody else runs and reports on. A growing number of savers want one corner of their money kept outside that machine.
Priority Gold endeavors to provide the most accurate useful information and helpful advice to the audience at its best. But there is no 100% guarantees of completeness, accuracy, usefulness or timeliness in or about the content. Any advice offered by Priority Gold are just our opinions and not to be relied on by anyone or any purpose. Seek your own legal, financial, tax, investment, and advice before opening an account with Priority Gold. All decisions regarding the purchase or sale of precious metals are solely at your decision only.
|
|
The story
SpaceX went public in June at $135 a share. On Monday it jumped almost 8 percent to $171.09, its highest close since mid-June, and it edged higher on Tuesday.
Morgan Stanley analyst Adam Jonas pushed it there. He kept a $300 price target and called the shares “cheap and getting cheaper.”
His math says the market pays in full for the rockets and the Starlink internet service. The AI unit behind the Grok chatbot gets close to nothing in that price. He told clients the window closes with the next Starship test flight, a few weeks out.
On the other side sit bigger names. Aswath Damodaran of NYU, known on Wall Street as the Dean of Valuation, put SpaceX’s worth near $1.3 trillion. He called the company’s own market-size estimate a “hallucination.”
Jeremy Grantham of GMO said in July it may go down as “the craziest IPO in human history.”
You may own some already. SpaceX joined the Nasdaq-100 within weeks of its debut, so every fund tracking that index bought it.
|
|
$2.3T
SpaceX’s market value at Tuesday’s close of $171.92, per Yahoo Finance
|
$6.4B
Operating loss in SpaceX’s AI unit in 2025, on about $3 billion of sales
|
$300
Morgan Stanley’s price target, about 75% above Tuesday’s close
|
|
|
Free float
|
The slice of a company’s shares that can actually trade. SpaceX floated about 5 percent at its IPO, half the usual minimum, so modest trades can move the price.
|
|
|
Best case
OCTOBER 2027. The next Starship flew on schedule and came home in one piece, and launches came faster after that. Starlink kept signing customers in places no cable will ever reach.
Then the AI unit did what the bull case said the market was ignoring. It sold computing time to the biggest labs at prices that finally covered the chips, and the company-wide loss became a profit.
A profit opened the door to the S&P 500, which keeps out companies that lose money. So every S&P index fund had to buy a stock with very little of it for sale.
The price target was reached and then raised. Anyone who bought at the $135 offering price in June 2026 has more than doubled his money.
Grantham’s line still gets quoted at dinner. Mostly by people who own the stock.
|
|
Worst case
|
OCTOBER 2027. The next Starship slipped, then slipped again, and the few weeks the bulls had promised turned into two quarters.
Meanwhile the early investors’ lock-ups ran out in stages, the dates when insiders are finally allowed to sell. With so little of the company trading, every new batch of sellable shares landed on a thin market.
The AI unit kept losing money. Cheaper computing arrived from rivals, and the prices on SpaceX’s contracts came down to meet it.
So the stock drifted back toward Damodaran’s number. At $1.3 trillion, divided across today’s share count, a share is worth about $99.
Your Nasdaq fund held it all the way down. Index funds buy what the index says, and they never get to ask whether the price makes sense.
|
|
|
Jonas’s Musk bet is SpaceX itself. Jeff Brown of Brownstone Research has a Musk bet of his own, and it sits in a different company.
Jeff Brown believes Elon Musk is about to make it possible to retire on this single stock.And no, it’s not Tesla or SpaceX.
|
|
How it ends
You get a stock that swings on rocket headlines, unless the AI unit starts making money.
We ran it both ways, and the rocket is the smaller question. Launch and Starlink are the businesses even the skeptics are willing to value.
Starlink alone made $4.4 billion of operating income on $11.4 billion of revenue last year. That is a real business at a real price.
The whole fight is over the AI unit. Jonas says the market gives it almost nothing. The unit’s own 2025 numbers show why: an operating loss of $6.4 billion on about $3 billion of sales.
The second quarter of 2026 did narrow the company-wide loss to $541 million, from $1 billion a year earlier. That is the trend Jonas is paying for.
A clean Starship flight would make for a great week of headlines. The bull case still needs the AI unit to earn money, and the reports so far show a loss getting smaller.
If you own a Nasdaq-100 fund, you are already in this trade, in proportion to SpaceX’s size in the index. For you the next quarterly report matters more than the next launch.
The bulls and the skeptics will both be on television after the next flight. Both get paid for the segment whichever way the rocket comes down.
|
|
|
The AI unit’s operating loss in SpaceX’s third-quarter report, due around early November, since the last one came on August 4. It lost $6.4 billion in 2025 on about $3 billion of sales. A shrinking loss gives Jonas his case, and a growing one hands the stock to Damodaran.
|
|
|
One story each weekday, followed through to its ending. If you would rather leave yours open, the exit is below.
|
|
The Last Page.
The last page, first. Reply and name the story you want finished.
|
|
|
