The market is failing to assign any value to SpaceX's artificial intelligence (AI) business, according to an analysis, as the company's shares have shown weak performance since its listing.
According to Bloomberg on the 24th, Morgan Stanley analyst Adam Jonas said in an investor note that "the gap between increasingly bearish investor sentiment and the fact that the company's fundamentals have barely changed is creating an attractive buying opportunity in SpaceX shares now."
SpaceX, led by Elon Musk, has continued its decline after conducting an initial public offering (IPO) worth $86 billion (about 125 trillion won) last month. Bloomberg reported that SpaceX shares fell to as low as $110.85 during trading this week, roughly 18% below the offering price.
Jonas expects that when some of the lockup shares held by existing shareholders are released next month, insider selling will emerge and push the stock price down to around $100. The lockup shares set to be released early next month are known to account for about 20% of the total. This, he argues, effectively means the market is assigning a value of "zero" or negative to SpaceX's AI business.
"Most investors are heavily discounting the value of Grok and Cursor (the AI segment)," he said, adding, "Compared to the space and telecommunications businesses, the AI business requires enormous capital expenditure, has uncertain profitability, and consumes excessive management time and resources, which is why many investors reflect a low valuation." On the other hand, Jonas set a target price of $300, and he assessed that more than half of that comes from the value of the AI business.
Bloomberg's survey also reveals Wall Street's positive outlook. According to Bloomberg's compilation, about 80% of analysts covering SpaceX have issued buy recommendations, and the average target price of about $232 was assessed to have more than double the upside potential compared to the current stock price. Jonas is considered one of the most optimistic SpaceX analysts on Wall Street. Among the 33 analysts compiled by Bloomberg, his target price ($300) is the third highest.
Meanwhile, SpaceX also achieved its first successful test flight since going public. That day, in the 13th test flight of its ultra-large rocket "Starship," SpaceX smoothly completed the process from atmospheric reentry to splashdown, succeeding in communicating with satellites and downloading data. However, the fact that the first-stage booster rocket did not function perfectly was cited as a limitation.
Jonas emphasized that "SpaceX occupies a unique position spanning space launch, telecommunications, and AI," adding, "the current valuation is an attractive entry point for long-term investors."
