Morgan Stanley Draws $100 Line Under SpaceX Stock's Sinking AI Premium

Fifteen dollars of share price now separate SpaceX from a market verdict that its artificial intelligence business is worth nothing. That is the arithmetic Morgan Stanley put in front of clients last week, in a note reported by Bloomberg on July 24, arguing that if the newly public company's shares fell to $100, investors would effectively be assigning zero value to an AI division the bank itself appraises at more than $150 per share.

Markets keep testing the proposition. SpaceX stock closed at $115 on Friday after a 2.7 percent drop, and on Monday it touched an all-time low of $108.66 in early trading before recovering toward $111, Yahoo Finance reported, even though the company had just completed a Starship test flight widely judged a success. Engineering triumphs, in other words, are no longer moving the tape. Tuesday's session kept the debate at the top of trading desks' agendas, six weeks after one of the largest listings in market history, with the note's central threshold functioning as the market's reference point.

Sum of the Parts, Minus the Rockets

Morgan Stanley's dissection of the company is striking for what it leaves out. Crypto Briefing reported that the bank's model assigns only about $8 per share to the launch business itself, despite an estimated 80 percent share of the global launch market, because Starship development keeps the segment deeply unprofitable. Forbes cited first-quarter figures showing a $662 million loss in space launch, against $1.19 billion of operating income at Starlink, the lone consistently profitable division.

Then there is the AI unit built around xAI, folded into SpaceX before the June listing. Forbes reported it lost $2.47 billion in the first quarter on revenue of $818 million, meaning the business currently burns roughly three dollars for every dollar it takes in. Analyst Adam Jonas wrote that many holders "ascribe zero or even negative value" to the segment given its capital requirements, per Forbes. Bloomberg quoted the same note observing that investors he canvasses "significantly discount Grok & Cursor," the division's consumer chatbot and coding products.

Cash Burn Behind the Discount

Selling pressure built through last week in stages. FX Leaders reported a 5.32 percent slide to $116.97 on July 22 as capital spending estimates circulated, and the stock has not sustained a bounce since. At current prices, TS2's analysis suggests, the market credits the AI franchise with only about $200 billion of value, a fraction of what private funding rounds implied for xAI before the merger.

Skepticism has a concrete basis. TradingKey reported Morgan Stanley's estimate that the xAI operation could consume as much as $120 billion in cash across 2026 and 2027, after first-quarter AI spending of $7.7 billion. Announced plans for a new Texas data center on the gigawatt scale of the existing Memphis campus extend that trajectory rather than tempering it, and the company has floated a Starmind constellation intended to place AI compute in orbit aboard Starship launches next year.

Each project deepens the strategic logic that justified stapling xAI to a rocket maker, and each widens the near-term funding gap. Bond investors have already been tapped for $20 billion, TradingKey noted, and the equity market's response since has been to compress the multiple rather than reward the ambition. Cheaper Chinese models and the far larger balance sheets of rival hyperscalers give the bears additional material.

Lock-Up Clock Ticks Toward August

Timing amplifies the pressure. SpaceX priced its initial public offering on June 12 at $135 per share, an implied valuation near $1.8 trillion, and briefly traded at a market value above $2 trillion before the retreat began. From the first-day close of $160.95, Forbes calculates, the stock has surrendered 28.5 percent, erasing on the order of $1 trillion from the company's peak worth.

Underneath the volatility sits a business that was solidly profitable before the AI build-out accelerated. Crypto Briefing cites 2025 revenue of $15 billion to $16 billion and net profit of roughly $8 billion, driven by Starlink's subscriber growth. The same outlet notes a curiosity on the balance sheet: 18,712 bitcoin worth about $1.29 billion as of March 31, a legacy holding that registers as a rounding error against the company's market value.

Two catalysts land within days of each other. First quarterly earnings as a public company arrive on August 4, followed two days later by the expiration of the IPO lock-up, which Proactive Investors reports could free early holders and employees to sell up to 911.5 million shares, roughly a fifth of the eligible locked stock. Supply of that scale hitting a falling tape explains much of July's grind lower, whatever the fundamentals say.

Bull Case Jonas Refuses to Drop

Morgan Stanley itself is not capitulating. Jonas maintains an Overweight rating and a $300 price target, arguing the gap between depressed sentiment and stable operating fundamentals creates opportunity, according to Gurufocus. His sum of the parts still credits Starlink's subscription machine, Starship's optionality and the AI franchise with far more than the current quote implies, and rival desks are engaged too, with Goldman Sachs refreshing its own target on the name last week, per TheStreet.

Longer-range projections from the bank border on the astronomical. Crypto Briefing reports Morgan Stanley modeling scenarios in which the company's annual revenue reaches $3.4 trillion by 2040, a figure that assumes orbital data centers, global connectivity dominance and AI services all mature together. Forecasts on that horizon are closer to thought experiments than estimates, but they explain why the bank treats today's price as a mispricing of duration rather than a verdict on the franchise.

Whether SpaceX stock finds its floor above the $100 line may be decided less by spreadsheets than by the August calendar. Numbers on the fourth, float on the sixth: by the second week of August, holders will know how much of Morgan Stanley's dormant AI premium survives contact with the market. Until then, every dollar of decline reads as a referendum on whether orbital ambition and a cash-hungry chatbot belong inside the same capital structure.