Omanghana
Morgan Stanley has maintained its base-case price target of $300 for SpaceX shares, a projection that would place the aerospace and technology company’s potential market valuation at approximately $4 trillion.
The investment bank also outlined a more optimistic bull-case scenario of $600 per share, reflecting expectations that SpaceX could derive substantial long-term value from its growing artificial intelligence operations.
At the center of the bullish assessment is SpaceX’s $60 billion all-stock acquisition of Anysphere, the technology startup behind the AI coding platform Cursor. The deal represents a major expansion beyond SpaceX’s established operations in rocket launches, satellite communications and space-based infrastructure.
SpaceX announced the acquisition agreement in June 2026, with the transaction structured to bring Cursor under its wider technology ecosystem. The deal is expected to strengthen cooperation between Cursor and xAI, the artificial intelligence business integrated into SpaceX’s operations.
Morgan Stanley believes investors may not yet be assigning sufficient value to SpaceX’s emerging AI business. Much of the company’s market identity has traditionally been linked to its launch services and Starlink satellite network, but the Cursor transaction signals an attempt to establish a stronger presence in enterprise software and AI-assisted development.
Cursor allows software developers to write, review and modify code using artificial intelligence. Its integration with SpaceX’s computing resources and Grok models could support the creation of new tools for developers while expanding the company’s recurring software revenue.
Morgan Stanley estimates that Cursor’s annual recurring revenue could reach $8 billion by the end of 2026 and climb to approximately $33 billion by 2030. The bank also projects that the platform could contribute about $2.5 billion to SpaceX’s revenue in 2026 and $13 billion in 2027.
Those projections remain estimates and will depend on Cursor’s ability to retain subscribers, attract enterprise customers and manage the significant computing expenses associated with developing and operating advanced AI systems.
Morgan Stanley identified several developments that could determine whether SpaceX moves closer to its base or bull-case valuation.
Investors are expected to pay close attention to the company’s third-quarter financial disclosures. The results could provide more information about Cursor’s revenue, operating expenses and integration into SpaceX’s broader business.
The market will also be looking for details about the financial structure of the acquisition and the extent to which the issuance of shares affects existing investors. Any updated guidance on AI infrastructure spending and potential returns could influence sentiment toward the company.
Another important catalyst will be the release of performance data for the Grok 4.6 and Grok 4.7 models. Strong benchmark results and evidence of commercial adoption could support Morgan Stanley’s view that SpaceX’s AI operations deserve a higher valuation.
Grok 5, which is anticipated before the end of 2026, is also expected to play a central role in the company’s AI strategy. Its performance, cost efficiency and ability to compete with other leading models could help determine the commercial prospects of the wider business.
Morgan Stanley is additionally monitoring the possible launch of Composer 3, the next expected version of Cursor’s proprietary model. Improvements in coding accuracy, speed and operating efficiency could encourage wider adoption among individual developers and large organizations.
Periodic updates on Cursor’s annual recurring revenue will offer another measure of whether the platform is growing at the pace assumed in Morgan Stanley’s projections. A failure to meet those milestones could weaken the valuation case, while stronger-than-expected growth could support further upside.
The bank expects Cursor’s gross margin to turn positive and gradually improve as more workloads are directed through Composer and Grok models. By 2030, it projects margins in the low-60% range, although achieving that level would require SpaceX to control infrastructure costs while continuing to expand the platform.
The $300 target remains Morgan Stanley’s central estimate rather than a guarantee of future performance. Its $600 bull case assumes that SpaceX successfully integrates Cursor, expands recurring AI revenue and converts its computing infrastructure into a high-growth commercial platform.
Despite the optimism, the strategy carries considerable risk. SpaceX faces intense competition in AI development, high capital requirements and uncertainty over how rapidly enterprise customers will adopt new coding products.
The company’s ability to combine its launch, satellite, computing and AI operations will therefore be critical. If the integration succeeds, Morgan Stanley believes SpaceX could evolve from a company known primarily for rockets and satellite connectivity into a broader technology group with a significant position in global AI infrastructure.
Source: Omanghana
