Morgan Stanley Bullish on SpaceX: "Tera’Merica" Potential Undervalued, Enterprise AI and Computing Power Expansion Unlock Growth Space

SpaceX's long-term growth potential may not only come from aerospace, satellite communications, and AI computing power, but also from the industrial opportunities brought about by the reconstruction of advanced manufacturing in the United States. Morgan Stanley believes that while the market is currently focusing more on the capital expenditure pressures of projects such as Terafab, it may be underestimating the connection between these investments and the manufacturing renaissance in the U.S., as well as the long-term growth potential arising from this link.

The report refers to the latest wave of U.S. manufacturing reconstruction as "Tera’Merica." This concept is not limited to the onshoring of the semiconductor industry; it also encompasses areas like rockets, satellites, ground stations, turbines, autonomous vehicles, industrial robots, humanoid robots, ships, and drones. As AI extends from digital applications to physical production, improving America's advanced manufacturing capacity will require not only chips, but also supporting factories, equipment, and critical supply chains.

This provides SpaceX with a broader growth outlook. The company's aerospace, satellite communications, and AI infrastructure businesses overlap with these industrial initiatives; projects such as Terafab could further strengthen its footprint in chip manufacturing and AI computing power. Morgan Stanley argues that the value of these investments should not be assessed solely based on short-term capital expenditures, but also on how they support the company's long-term business expansion.

Based on this judgment, Morgan Stanley maintains an "Overweight" rating on SpaceX, with a target price of $300.

“Tera’Merica”: The U.S. Manufacturing Renaissance Goes Far Beyond Chip Onshoring

The report connects this trend to the "Physical Intelligence Economy" (PIE), i.e., driving the expansion of AI from digital applications to real-world production activities. Achieving this transformation requires long-term investment in factories, equipment, and key material supply chains, with industries affected reaching far beyond semiconductors.

For SpaceX, this is not only related to manufacturing projects such as Terafab but may also provide broader development space for its aerospace, satellite communications, and AI infrastructure businesses. However, there remains a long way to go from technological breakthroughs to full-scale automated production.

Using Tesla’s Austin factory as an example, the report notes that it employs more than 20,000 people. According to analysts, the Cybercab production line has not yet utilized the Optimus humanoid robot; production still relies on a combination of robotic arms and human labor. This suggests that large-scale autonomous robotic manufacturing hasn't been fully realized, and practical implementation will take more time, requiring labor skill transformation and further maturity of AI manufacturing tools.

AI Computing Power & Enterprise AI: Another Growth Driver in SpaceX’s Valuation

In addition to the long-term opportunities presented by U.S. manufacturing reconstruction, Morgan Stanley is also optimistic about the potential value of SpaceX’s enterprise AI and computing power expansion. According to the report, capital expenditure on projects such as Terafab should not be viewed merely as a cost burden; the key lies in whether these investments can be converted into computing power supply and new business revenue.

Enterprise AI is one important source of value. According to the report, when the stock price is around $170, the implied sales multiple assigned by the market to SpaceX's enterprise AI business is only in the low to mid-single digit range, reflecting investor caution on commercial prospects.

Computing power expansion offers a more concrete upside for valuation. The report estimates that an additional 1 gigawatt (GW) of nominal computing power, with an investment of $50 per watt, a 70% incremental profit margin, and a 10x EBITDA valuation, could add about $27 per share. Morgan Stanley forecasts that by the end of fiscal 2027, SpaceX’s AI computing power will reach about 4.9 GW, compared to the company’s target of close to 10 GW. This gap indicates potential growth, but ultimate value still depends on construction progress, actual costs, and the ability to monetize computing power.

Based on a sum-of-the-parts valuation of its four main business segments—space, connectivity services, X and consumer AI, and enterprise AI—Morgan Stanley sets a $300 price target. While enterprise AI is a significant part of the valuation, the report applies a 50% valuation discount to reflect execution risks.

Risks should not be ignored; these include slower-than-expected progress for Starship and Starlink, delays in enterprise AI commercialization, rising costs of computing infrastructure, and greater financing needs. Overall, Morgan Stanley’s bullish thesis is twofold: enterprise AI and computing power expansion offer relatively direct growth potential, while the manufacturing renaissance represented by “Tera’Merica” provides a longer-term industrial growth story. Whether these opportunities translate into actual value still depends on SpaceX’s execution and commercial progress.