SpaceX shares jumped almost 8% on Monday to their highest level since mid-June, extending a powerful rebound in the newly public company and pushing Elon Musk’s estimated wealth back above $1 trillion.
The stock rose to $171.09 by the close after Morgan Stanley analysts described SpaceX as “cheap” at its current valuation and recommended investors buy the shares. The bank set a $300 price target, implying roughly 75% upside from Monday’s closing price.
Morgan Stanley identified several potential catalysts for the stock, including future artificial intelligence product launches, progress on SpaceX’s Starship rocket and additional contracts to provide computing capacity through the company’s growing AI infrastructure business.
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The recommendation comes less than four months after SpaceX’s initial public offering, giving investors an unusually early opportunity to reassess the company’s value as it expands beyond rockets and satellite communications into AI infrastructure and defense.
The company’s shares have already undergone a sharp reversal since the IPO. SpaceX went public on June 12 and reached a record closing price of $201.80 four days later before selling pressure pushed the stock lower. Shares bottomed in early August but have since gained about 58%, bringing the company back toward its post-IPO highs.
For Musk, the rally has an immediate personal consequence. Forbes’ real-time billionaire ranking put his net worth at about $1.03 trillion, based largely on his stakes in SpaceX and Tesla, returning him to trillionaire status as SpaceX’s market value climbs.
Starship Offers The Next Major Catalyst
Morgan Stanley’s bullish view is closely tied to Starship, SpaceX’s next-generation launch system and one of the most ambitious projects in the commercial space industry.
Starship is designed as a fully reusable launch system, with both its massive booster and upper-stage spacecraft intended to return safely to Earth. If SpaceX can demonstrate reliable reuse at scale, the system could substantially reduce the cost of putting satellites, cargo, and eventually people into orbit.
The ambition has direct implications for SpaceX’s existing businesses. Starship could allow the company to deploy Starlink satellites more rapidly and at lower cost while creating additional capacity for third-party payloads, including government and commercial missions.
SpaceX conducted several notable missions last week, including a crewed NASA mission to the International Space Station and a separate launch carrying Google AI chips into orbit. The sequence demonstrated the breadth of the company’s launch operations while highlighting the important connection between its space and computing businesses.
Morgan Stanley analysts suggested investors position themselves ahead of SpaceX’s next planned Starship test and its third-quarter earnings report, expected in late October.
A successful upper-stage ship catch could become a particularly important milestone.
“Should SpaceX attempt a Starship upper stage ship catch in its next test flight,” the analysts wrote, it could represent “the biggest positive catalyst since the IPO.”
SpaceX has previously demonstrated sophisticated Starship flight operations, but the upper stage has so far ended its test missions with ocean splashdowns rather than a demonstrated controlled return and reuse. A successful catch would mark more than another launch milestone. It would provide additional evidence that SpaceX is moving toward its long-term objective of a fully reusable heavy-lift system.
That could materially change investor expectations around the economics of Starship. Reusability is central to SpaceX’s strategy because it could allow the company to increase launch frequency while reducing the marginal cost of each mission.
AI Becomes A Second Growth Engine
SpaceX’s investment case is also tied to artificial intelligence. The company expanded into AI through its acquisition of Musk’s xAI and has subsequently broadened that business through the acquisition of Cursor. While the Grok model has struggled to match the visibility and adoption of leading systems from OpenAI and Anthropic, SpaceX does not necessarily need to win the consumer AI model race to benefit from the sector’s rapid expansion.
Instead, the company is increasingly positioning itself as an infrastructure provider.
SpaceX can supply computing capacity to AI companies that need large amounts of processing power, creating a business model that is less dependent on whether Grok itself becomes a leading consumer product.
Morgan Stanley’s reference to additional “neocloud contracts” highlights that opportunity. Neocloud companies provide specialized computing infrastructure, particularly large pools of GPUs and other accelerators, to AI developers that need capacity without building all of their own infrastructure.
The combination of AI computing demand and SpaceX’s existing satellite network could eventually give the company exposure to several layers of the AI economy, from models and applications to computing infrastructure and connectivity.
But the expansion also increases the expectations embedded in the stock. Investors are now valuing SpaceX not simply as a launch company or Starlink operator but as a diversified technology platform spanning satellites, launch systems, AI and government contracts.
Government Business Adds Another Layer
SpaceX also benefits from its extensive relationship with the U.S. government. The Pentagon appointed Musk last week as co-lead of Project Meridian, an initiative focused on identifying weapons, technologies and military capabilities the United States may require in future conflicts.
SpaceX already receives substantial government business through launch services, satellite communications and defense-related contracts. According to FedScout, the company has earned more than $12.7 billion from work with the Defense Department.
That government exposure gives SpaceX a potentially significant source of demand as Washington increases spending on space-based communications, surveillance, missile-warning systems and other defense technologies.
It also introduces political and regulatory considerations that investors cannot easily separate from the company’s commercial prospects.
Musk’s close relationship with the Trump administration has become relevant as SpaceX expands its role as a government contractor. The relationship could provide access to policy discussions and government programs, while also exposing the company to greater scrutiny over conflicts between Musk’s commercial interests and his political relationships.
The issue was visible Monday when Musk was absent from a New York City Council hearing on AI regulation, where representatives from OpenAI, Anthropic, Google and Meta appeared before lawmakers.
Councilmember Shekar Krishnan criticized the economic effects of the AI boom and specifically linked rising AI valuations with Musk’s wealth.
“AI has taken over our economy, inflated valuations, stealing our public land for data centers, and increasing the net worth of AI CEOs like Elon Musk, who became our first ever trillionaire,” Krishnan said.
Musk’s absence left the criticism unanswered at the hearing, even as the SpaceX rally provided a tangible illustration of the wealth creation surrounding the AI and infrastructure boom.
Musk also said over the weekend that SpaceX would rename its AI division from SpaceXAI to SpaceXSI, adopting the “super intelligence” terminology promoted by President Donald Trump.
The Valuation Question
The major concern for SpaceX investors is whether the company’s collection of businesses can justify the expectations now being built into its public valuation.
Morgan Stanley’s $300 target suggests the bank believes the market is not fully pricing the potential contribution from Starship, AI infrastructure, and government contracts.
The challenge is that several of those opportunities remain dependent on future execution.
Starship still has to demonstrate reliable upper-stage recovery and reuse. AI infrastructure requires substantial capital and access to computing hardware. Government contracts can be large but are subject to procurement cycles and policy changes. And the commercial performance of Grok remains weaker than that of the leading AI platforms.
That makes the coming months particularly important for investors. A successful Starship test, additional AI infrastructure contracts or stronger-than-expected earnings could reinforce the bullish case. Delays or technical setbacks could have the opposite effect after the stock’s sharp rebound.
SpaceX’s public-market story is therefore becoming broader than the rocket launches that built the company’s reputation. Starlink provides recurring connectivity revenue, Starship offers the possibility of dramatically lower launch costs, AI infrastructure gives the company exposure to one of the fastest-growing areas of technology spending, and government contracts provide a large institutional customer base.
The market is now being asked to value all of those opportunities simultaneously.