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$SpaceX has fallen sharply since its IPO, but Wall Street remains divided on whether the pullback is a buying opportunity or simply brings the stock closer to fair value.
The stock closed Friday at $108.37, down from its $135 IPO price and well below its post-listing high of $225.64. Based on roughly 13.16 billion diluted shares, SpaceX’s market value has fallen to about $1.43 trillion.
Morgan Stanley believes the long-term investment story remains intact and argues the recent weakness has been driven more by lockup concerns, cautious positioning, and deteriorating sentiment than by fundamentals. The firm maintains a $300 price target, implying roughly 177% upside from current levels.
The biggest near-term catalyst is the August 6 lockup expiration, when more than 930 million shares worth about $100 billion become eligible for sale. This is only the first of eight lockup releases that could unlock nearly 4 billion shares through January 2027. While not all shares will be sold, the potential supply is larger than the current public float, creating significant overhang on the stock.
Because of this, Morgan Stanley believes earnings may matter less than the lockup unless management significantly changes its long-term outlook. Wall Street expects Q2 revenue of around $6.9 billion and adjusted EBITDA of about $2.1 billion, but investors will focus more on AI contracts, Starlink growth, capital spending, and AI compute deployment.
Valuation remains the biggest debate.
Morningstar assigns a $62 fair value, giving SpaceX a Very High Uncertainty rating. It values the company’s traditional businesses—launch services and Starlink—at about $40 per share, while assigning only $16.50 per share to AI using probability-weighted assumptions.
Valuation expert Aswath Damodaran estimates equity value at roughly $1.3 trillion, or about $100 per share, close to today’s market price. His model recognizes SpaceX’s strong growth potential but uses more conservative assumptions for AI profitability.
Morgan Stanley is substantially more optimistic. Its $300 target breaks down as:
Space business: $8/share
Starlink Connectivity: $128/share
X & Grok: $12/share
Enterprise AI: $152/share
More than half of Morgan Stanley’s valuation comes from AI, highlighting how much future upside depends on successful commercialization of AI services. Under this framework, Space and Starlink alone are worth about $136 per share, implying today’s market is assigning little or even negative value to the AI business. However, that estimate still assumes years of strong Starlink growth and successful execution.
Relative valuation also looks more balanced after the correction. At recent levels, SpaceX trades at about 20.2x 2028 EV/EBIT, close to $AMD (21.2x) and $GE Vernova $GEV (20.8x). It remains far cheaper than $Rocket Lab $RKLB (160.5x), $Tesla $TSLA (97.1x) and $AST SpaceMobile $ASTS (25.8x), but still trades at a premium to $Alphabet $GOOG, $Amazon $AMZN, $Microsoft $MSFT (roughly 14–16x) and above $NVIDIA $NVDA and $TSMC $TSM (around 10–11x).
The key question is whether 2028 earnings will materialize as projected. Today’s valuation only looks attractive if Starlink continues growing rapidly, Starship successfully lowers launch costs, and AI investments begin generating meaningful profits.
For now, Starlink provides the strongest valuation floor, while AI, Grok, enterprise AI, and Starship represent the largest upside opportunities. The main risks remain heavy capital spending, shareholder dilution from future lockup expirations, and AI monetization falling short of expectations.
Overall, SpaceX has shifted from being expensive under almost every valuation framework to reasonably valued if management executes well. The long-term risk/reward has improved significantly, but with earnings approaching and the first major lockup release on August 6, a staged accumulation strategy may offer a better entry than buying aggressively after the recent 50% decline.