Morgan Stanley Says Investors Assign 'Zero or Even Negative' Value to SpaceX's AI Business

Wall Street investors are assigning little or no value to SpaceX's artificial intelligence arm, despite the company's heavy spending on the technology, according to Morgan Stanley, one of the banks that led its record stock market listing.

The warning comes just weeks before SpaceX publishes its first earnings as a public company, following a sharp share-price slide that has wiped about $1 trillion off its peak market value.

The assessment comes as SpaceX heads toward its first earnings report as a publicly traded company after a sharp post‑listing decline wiped roughly $1 trillion from its peak market value.

Morgan Stanley continues to rate the stock Overweight with a $300 price target, yet the bank said conversations with investors suggest many no longer see the company's AI operations contributing meaningful value to the business.

Morgan Stanley Sees Investors Discounting AI

In a note to clients, Morgan Stanley analyst Adam Jonas wrote that 'most investors we speak with significantly discount Grok & Cursor,' referring to SpaceX's artificial intelligence businesses.

Jonas said many investors 'ascribe zero or even negative value for AI given the high capex requirements relative to Space & Connectivity, largely uncertain economics, and the high degree of management time devoted to the business.'

The bank said some investors expect SpaceX shares could fall towards $100 after the first major lock‑up expires next month. At that level, Jonas argued, the market would effectively be assigning no value to the company's AI business.

Morgan Stanley nevertheless reaffirmed its Overweight recommendation and maintained a $300 price target. According to the note, more than half of that valuation is attributed to SpaceX's AI segment.

Financial Filings Show Why Investors Remain Cautious

SpaceX's registration statement filed ahead of its IPO showed the company's AI division remained deeply loss‑making despite generating substantial revenue.

During the first quarter of 2026, the AI segment generated $818 million in revenue but recorded an operating loss of $2.47 billion.

By comparison, Starlink, the company's satellite broadband business, generated positive operating income over the same period. The space launch division also remained loss‑making despite maintaining a dominant position in the commercial launch market.

The filing showed AI remains one of SpaceX's largest areas of investment as the company continues expanding Grok and Cursor alongside its core aerospace and satellite businesses.

Shares Retreat After Record IPO

SpaceX raised a record $86 billion when it listed in June. Shares surged nearly 50 per cent during their first three trading sessions before reversing. The stock reached an intraday high of $201.80 before falling to close at $115.07 on Friday.

The decline has erased about $1 trillion from the company's peak market capitalisation, leaving SpaceX valued at roughly $2 trillion.

The retreat has coincided with a broader pullback in companies committing billions of dollars to artificial intelligence infrastructure as investors reassess the sector's profitability.

Earnings and Lock-Up Expiry Could Test Sentiment

Attention is now turning to two events expected to influence trading over the coming weeks.

SpaceX is scheduled to report its first quarterly earnings as a public company on 4 Aug. The first major insider lock‑up expires on 6 Aug, allowing about 911.5 million previously restricted shares to become eligible for sale.

Despite the recent sell‑off, Wall Street remains broadly optimistic on the stock. Bloomberg data show nearly 80 per cent of analysts covering SpaceX maintain buy‑equivalent ratings, with an average price target of about $232.

Morgan Stanley's latest note suggests investors remain far less convinced about the value of SpaceX's AI ambitions than many analysts, even as the company continues to position artificial intelligence alongside launch services and satellite connectivity as a core part of its long‑term strategy.