AI Summary
5 min readMorgan Stanley Issues SpaceX Target Value of ~$4T
SpaceX joined the NASDAQ 100 index on Tuesday, just weeks after its record-breaking IPO, forcing tracker funds tied to the index to buy the stock. Companies typically must wait 12 months and show sustained profitability before entering major indices — SpaceX has done neither, but the rules were changed. On the same day, the quiet period ended for banks that underwrote the IPO, and a wave of Wall Street brokerages including Morgan Stanley, Goldman Sachs, and UBS issued their first coverage with bullish ratings. The stock, which had shot up from its $135 IPO price to as high as $225 before settling around $160, was down nearly 7% on the day to just under $150.
Morgan Stanley's $4 Trillion Bet
Morgan Stanley initiated coverage with an "overweight/attractive" rating and a $300 price target — representing roughly a $4 trillion market capitalization. The bank's analyst Adam Jonas, formerly the firm's Tesla and auto analyst who has been reallocated to what the Financial Times called a "free radical futurologist role," leads a team of eight analysts on the coverage. Bernstein gave an outperform rating with a $239 target, while UBS initiated with a buy and a 12-month target of $220.
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What you'll learn
- 1 (00:00) **SpaceX Joins NASDAQ 100 & Morgan Stanley Initiates Coverage** - SpaceX enters the NASDAQ 100 index, forcing tracker funds to buy the stock, while Morgan Stanley issues a $300 price target (~$4T market cap) as the quiet period ends.
- 2 (01:10) **Morgan Stanley's Sector Breakdown of SpaceX** - The bank values SpaceX's space business at just $8/share, with connectivity at $128, X/Grok at $12, and Enterprise AI at $152.
- 3 (02:15) **Wall Street Banks Issue Bullish Ratings as Quiet Period Ends** - Goldman Sachs, UBS, and others initiate coverage with buy ratings; UBS gives a $220 target, Bernstein $239.
- 4 (03:50) **Index Inclusion Rules Changed for SpaceX** - The company joined the NASDAQ 100 just weeks after its IPO, bypassing the usual 12-month wait for sustained profitability.
- 5 (04:57) **Morgan Stanley's Base-Case DCF Breakdown** - The bank's $300 target is built on a sector-by-sector valuation: Space $8, Connectivity $128, X/Grok $12, Enterprise AI $152.
- 6 (06:00) **Alphaville Commentary on Morgan Stanley's Note** - The FT's Alphaville critiques the promotional tone of the initiation note, calling it a "dream collaboration" with analyst Adam Jonas.
- 7 (07:46) **Morgan Stanley's Base-Case Revenue Projections** - The bank models revenue rising from $45B in 2026 to $319B in 2030 and $3.3T in 2040.
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Show Notes
John Johnston (JJ) breaks down how SpaceX has received bullish recommendations from Wall Street banks, including Morgan Stanley, which has given Elon Musk’s AI and rocket company stock a $300 price target. This would give SpaceX a market valuation of around $4 trillion.
Related episodes:
Aswath Damodaran: “SpaceX Looks AWFUL As An Investment” https://open.spotify.com/episode/5lheHMH1AuJ1YVYB3i3F8G
AI Bubble & SpaceX: What Could Happen in A Bust? | Grantham & Buffett https://open.spotify.com/episode/48X5eRowgV9GCTCnwabg5O
SpaceX & AI: “Bigger Than The Dot Com Bubble” | Jim Chanos https://open.spotify.com/episode/0hywOjJLjvIs53nOXHQorl
Disclaimer: I am not a financial adviser and nothing in this content is financial advice. This content is for general education and entertainment purposes only. Do your own analysis and seek professional financial advice before making any investment decision.
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