Morgan Stanley (MS) maintained its “overweight” rating on SpaceX (SPCX) shares and a $300 target price. This is more than twice the stock’s closing price on August 11. The investment bank cites the development of the company’s artificial intelligence business following the acquisition of the AI coding tool developer Cursor as one of the key factors for a revaluation.
In premarket trading on August 12, SpaceX shares rebounded after earlier-week declines and gained about 1%. According to Freedom analyst Natalia Milchakova, the acquisition of Cursor could strengthen SpaceX’s AI position by combining its own computing infrastructure, Grok models, and applied software products. Cursor already has a corporate customer base and a fast-growing business, so the deal gives SpaceX an opportunity not only to develop its own AI models but also to expand their commercial use. Over the long term, revenue growth from such products could increase the share of higher-margin software business and bring SpaceX’s AI segment closer to profitability.
Why Morgan Stanley has increased its bet on SpaceX’s AI business
Morgan Stanley believes investors are not yet fully pricing in the potential contribution of artificial intelligence to SpaceX’s future revenue. As new data emerges on Cursor and the company’s other AI projects, this business could command a higher valuation, which could also support SpaceX’s share price.
SpaceX agreed to buy Cursor’s developer for $60 billion in stock on June 16, a few days after the IPO. The deal complements the company’s AI direction after the merger with xAI, the developer of Grok. Cursor is an AI-powered programming tool that, according to Morgan Stanley estimates, is used by more than 60% of Fortune 500 companies and about 50,000 enterprises.
Morgan Stanley expects Cursor’s business to grow rapidly. In November 2025, the company’s annual revenue run rate exceeded $1 billion. The investment bank forecasts Cursor’s annual recurring revenue could reach $8 billion by the end of 2026 and about $33 billion by 2030.
After Cursor is integrated into SpaceX’s business, the developer could generate about $2.5 billion in revenue for the corporation as early as this year and $13 billion in 2027. That corresponds to roughly 10% and 19% of SpaceX’s projected AI-segment revenue, respectively.
SpaceX shares trade below the IPO price, but Wall Street maintains a positive outlook
Morgan Stanley’s optimistic forecast came after a pullback in SpaceX shares. At the close on August 11, the stock fell 3.9% to $133.29, dropping back below the $135 IPO price. Against this backdrop, Morgan Stanley’s $300 target implies upside of about 125% from the August 11 close.
Other market participants share the positive view as well. Of the 36 analysts tracking SpaceX, 29 recommend buying the company’s shares. Thus, despite the post-IPO decline, Wall Street overall continues to expect long-term business growth.
According to Freedom analyst Natalia Milchakova, SpaceX’s further performance will largely depend on the company’s ability to turn large-scale investments in artificial intelligence into a sustainable source of income. If AI products and services begin to make a noticeable contribution to financial results, this could become one of the factors driving the company’s value higher over the long term.
Morgan Stanley increased profit and assets under management
Morgan Stanley (MS) itself, which offers one of the most optimistic forecasts for SpaceX, significantly exceeded market expectations in the second quarter. The bank’s net profit rose from $3.39 billion a year earlier to $5.44 billion, and earnings per share came in at $3.46 versus the expected $2.94. Revenue increased from $16.79 billion to $21.35 billion.
Investment banking revenue rose to $2.44 billion from $1.54 billion, while asset management revenue reached a record $8.9 billion. Total client assets across wealth and investment management divisions reached $10 trillion.
Morgan Stanley participates in major IPOs in the U.S. market
The investment bank remains one of the active organizers of initial public offerings in the U.S. market. In June, Morgan Stanley joined the group of underwriters for the IPO of DPC Holdings Limited (DPC), operating under the Doncasters Group brand. The manufacturer of components and superalloys for aircraft engines and industrial gas turbines initially planned to raise about $700 million at a valuation of $4.15 billion.
The offering was priced at $33 per share, with total IPO proceeds reaching $919 million. Among the factors supporting the business, Freedom Broker analysts highlighted resilient demand from the aerospace and gas turbine industries.
Avalyn Pharma (AVLN) in late April completed an upsized IPO on Nasdaq: the company sold 16.67 million shares at $18 per share—at the top end of the initial range—and raised $300 million. After underwriters fully exercised an option for an additional 2.5 million shares, the total offering increased to 19.17 million shares and gross proceeds to $345 million. Avalyn is developing inhaled therapies to treat severe rare respiratory diseases, including pulmonary fibrosis.
Not an individual investment recommendation.