Is SpaceX a defensive AI stock?

Amid rising controversies over AI safety and doubts about the prospects of foundational models, Morgan Stanley emphasized that SpaceX possesses relatively stronger defensive attributes within its AI portfolio, maintaining its overweight rating and a target price of $300.

Calls from outsiders for foundational model developers to self-regulate their speed have put overall pressure on AI-related trades. According to Morgan Stanley research, SpaceX demonstrated stronger resilience against declines compared to major AI peers such as Meta, Nvidia, and Broadcom over the past week and month. Analyst Adam Jonas noted that SpaceX is not a pure AI play; its diversified business structure provides the stock with a certain buffer during periods of AI sentiment volatility.

The analyst also highlighted that at the current stock price of around $148, the implied sales multiple for the corporate AI business is merely in the low single digits, and the value of the orbital AI option is almost treated as zero. Investors now face an opportunity to "re-examine" SpaceX shares with better fundamentals.

Morgan Stanley believes that SpaceX is not a pure AI company. The analyst characterizes it as a manufacturing and infrastructure enterprise that vertically integrates aerospace launches, satellite communications, and computing stacks, enabling large-scale energy transformation into intelligence.

Many of SpaceX's near-term catalysts are largely unrelated to the overall health of the AI industry.

Starship’s 14th flight (expected September 22) and 15th flight (expected mid-October to early November) are independent events. Meanwhile, Starlink’s connectivity business has achieved over 100% year-over-year user growth and is the current core cash flow driver, not reliant on industry-wide AI capital expenditures.

From a valuation breakdown, out of the approximately $2 trillion total market value, analysts estimate around three-quarters of it are driven by aerospace and connectivity businesses. According to its sum-of-the-parts valuation model, the aerospace segment accounts for about $8 per share, and the connectivity business about $118 per share. Based on the current share price, the implied valuation for the AI business is only about 10% of Morgan Stanley’s AI valuation (i.e., about 10% of the $183 per share valuation).

Morgan Stanley points out that what long-term holders of SpaceX are betting on is the commercialization of space-based AI infrastructure, and the main inflection point for this logic is expected to emerge only after 2030, belonging to long-dated option value.

For more recent strategic moves, SpaceX’s partnership with Tesla focuses on robotics, while its collaborations with Nvidia and Intel are geared toward domestic semiconductor manufacturing—both considered long-term options in adjacent tracks, and the market currently assigns little or no value to these opportunities.

On the balance sheet, by the end of Q2 2026, SpaceX will hold about $10 billion in total cash and around $6.1 billion in net cash.

Morgan Stanley expects the company to pursue debt financing in the future, keeping its debt/EBITDA ratio between 1.5 and 2 times, but emphasizes that the management retains significant flexibility regarding the timing and scale of capital expenditures—the company will borrow and proceed with spending only when business plans are viable.

AI Computing Capacity Elasticity: Each 1GW Adds $27 to Stock Price

Morgan Stanley’s sensitivity analysis of AI computing capacity shows that each additional 1GW of rated capacity (at a cost of $50 per watt, a 70% incremental profit margin, and 10x EBITDA capitalization) could contribute approximately $27 to the share price, equivalent to 15% to 20% of the current price.

The firm’s forecast for AI computing power at the end of FY2027 is 4.9GW, while the company’s own goal is “close to 10GW.” If SpaceX meets or exceeds this internal target, the upside potential for the share price will significantly exceed baseline projections.

Morgan Stanley explicitly lists Elon Musk himself as one of SpaceX’s sources of defensive attributes. The report notes that, based on two decades of observing the SpaceX CEO’s management style, he is not inclined to squander the opportunities crises bring.

The report cites historical examples: Tesla delivered impressive operational and share price performance during both the "production hell" in 2018–2019 and the pandemic in 2020–2021, despite high market uncertainty.

Morgan Stanley believes that in today’s pressured AI sentiment environment, a management team with outstanding market insight and execution is likely to help SpaceX stand out among its peers.