SpaceX stock looks expensive on paper. At around 30 times estimated 2028 earnings before interest and taxes, it trades at nearly double the multiple of other mega-cap AI companies.

That kind of premium usually makes analysts nervous. Morgan Stanley isn’t nervous. In fact, it’s been doubling down.

Analyst Adam Jonas reiterated an Overweight rating and a $300 price target for SpaceX, which trades under the ticker SPCX, according to Investing.com. The stock was sitting at around $159 at the time of the report, which means Jonas is calling for roughly 90% upside from that level.

It’s a bold call on a stock that already carries a rich valuation by most traditional measures.

But Jonas’ argument isn’t really about the headline multiple. It’s about what that multiple misses. When you adjust for SpaceX’s expected growth rate, the stock actually looks cheaper than many of its peers, and the gap is widening in SpaceX’s favor.

Also read: OpenAI makes development moves to counter SpaceX and Meta

Why the SpaceX valuation looks different when you dig in

The comparable group of mega-cap AI companies trades at roughly 16 times 2028 estimated EV-to-EBIT, according to Jonas. SpaceX is at about 30 times.

On that basis alone, the stock looks stretched. But Jonas is focused on a different metric: enterprise value-to-earnings growth, which accounts for how fast a company is expected to expand rather than just where it sits today.

On that growth-adjusted basis, SpaceX trades at roughly 0.3 times its 2028 multiple, compared with a median of about 0.5 times for the rest of the mega-cap AI peer group.

In other words, you’re paying less per unit of growth with SpaceX than you are with most of the companies it gets compared to. Even at Morgan Stanley’s $300 target, the stock would sit at around 0.6 times that growth-adjusted measure, which is roughly in line with Amazon and below both Alphabet and Meta.

Jonas describes the valuation challenge as an “and” problem rather than an “or” problem. SpaceX isn’t one business. It’s a launch company and a satellite connectivity provider and a mobile communications player and an AI infrastructure business.

Investors have to think about how all of those pieces interact, not just what any one of them is worth in isolation. That complexity is part of why the stock is hard to value, and also part of why Jonas thinks the market is underpricing it.

It’s easy to read a Starship catch as a cool engineering moment and move on. But it matters for the business in a pretty direct way.

PATRICK T. FALLON / Getty Images

How SpaceX’s business breaks down at current prices

At $159 per share, Morgan Stanley estimates that SpaceX’s space launch and Starlink connectivity businesses account for around $127 of that price. This leaves roughly $32 per share attributed to AI, which works out to about three times estimated 2028 enterprise value to sales for a neocloud business.

That’s not a demanding AI multiple relative to what pure-play neocloud companies trade at.

Here’s where things get really interesting on the AI side. Consensus estimates are built around $17.60 per watt across 4.1 gigawatts of capacity. Jonas ran the numbers and found that every additional $10 per watt could tack on more than $40 billion in revenue above that baseline.

Now consider that SpaceX’s recent short-term neocloud contracts are reportedly coming in somewhere between $30 and $50 per watt. That’s a lot higher than what the market is currently pricing in.

That doesn’t mean the upside is guaranteed. SpaceX still has to build the infrastructure, secure enough power and actually convert demand into profitable contracts. AI data centers eat capital.

The gap between what SpaceX could earn and what it will earn depends on execution, and execution risk is real at this scale.

What catalysts could move SPCX stock?

Jonas flagged several near-term events that could shift sentiment on SPCX. Starship Flight 15 is expected sometime in late October or early November. Third-quarter earnings are also due in late October. Flight 16 is expected before year-end.

Beyond the launch schedule, new Grok model releases, additional neocloud agreements, and continued progress on Starship reusability are all on Jonas’ radar as potential catalysts.

SpaceX:

• SpaceX analyst plots path to bold $100 billion claim
• JPMorgan resets SpaceX price target after earnings

A successful Starship catch, Jonas said, could be the biggest positive catalyst for the stock since its IPO. Morgan Stanley gave Flight 14 a B+ and has been tracking the program closely.

Faster vehicle reuse means lower cost per launch and more launches per year, which strengthens the economics of the space business and gives Starlink more capacity to grow.

It’s easy to read a Starship catch as a cool engineering moment and move on. But it matters for the business in a pretty direct way.

Every time SpaceX reuses a vehicle instead of building a new one, the cost per launch drops. More launches per year, lower cost per launch.

That’s what makes the whole economics of the space business actually work, and it’s why no competitor has been able to close the gap.

What could go wrong?

Jonas sees the upside clearly, but he’s also put a bearish scenario on the table. If AI momentum slows, Starship hits a serious wall in testing, or SpaceX needs to go back to investors for a big equity raise, Jonas said the stock could slide toward $100 within 12 months.

That’s a real loss from where it’s trading now. And given how much of the $300 target depends on everything going more or less according to plan, it’s not a scenario you can just dismiss.

Slower Starship reuse, weak enterprise demand for AI services, higher computing costs, delays in connecting power to data centers, large future funding requirements, regulatory setbacks, and challenges monetizing AI models are all on the risk list.

Not every analyst agrees on the valuation, and the bearish case isn’t hard to construct when a stock is priced for aggressive execution across multiple high-stakes businesses simultaneously.

The interrelated nature of SpaceX’s businesses cuts both ways. It gives the company multiple shots at value creation, but it also makes the investment harder to analyze and harder to hold through a rough patch in any one segment.

For investors already in SPCX, Morgan Stanley’s message is that the growth math still works in your favor. For those still on the sidelines, the case rests on whether you believe SpaceX can execute on all of it at once.

Related: SpaceX CEO Elon Musk has 7 words for Delta Airlines after snub