SpaceX at $100 Would Mean Zero Value for Its AI Unit

SpaceX's stock market debut was supposed to be a triumphant proof point for Elon Musk's AI ambitions. Instead, the company's shares are edging toward a price that would tell a very different story. SpaceX closed Friday at $115.07, down nearly 50% from its June peak, and Morgan Stanley says a further slide to $100 would mean investors are assigning zero or even negative value to the company's entire artificial intelligence business, according to Bloomberg's reporting.

The scale of the reversal is genuinely striking. SpaceX raised a record $86 billion through its June IPO at $135 per share, and shares briefly surged to $201.80 within days, pushing the company's market capitalization to roughly $3 trillion. Since then, the stock has lost about $1 trillion in market value, wiping out nearly all of that early euphoria.

Morgan Stanley analyst Adam Jonas laid out the math behind the warning directly. "Most investors we speak with significantly discount Grok & Cursor," Jonas wrote, according to Forbes's coverage of the note. "Many ascribe zero or even negative value for AI given the high capex requirements relative to Space & Connectivity, largely uncertain economics, and the high degree of management time devoted to the business." Jonas holds a $300 price target on the stock, with more than half of that target attributed specifically to the AI segment, which includes Grok and the company's stake in coding tool Cursor, a comparison worth understanding alongside our broader look at what xAI has built and how investors are valuing it separately from SpaceX's core space business.

The company's own S-1 filing made an ambitious claim underlying much of the original excitement: "We believe we are the only company with a commercially viable path to building orbital AI compute at scale." SpaceX estimated its total addressable market at roughly $41.5 trillion, with AI products and services accounting for about $38.6 trillion of that figure, according to Invezz's reporting on the filing.

This selloff isn't happening in isolation. It reflects a broader rotation among investors away from technology firms that have committed hundreds of billions of dollars to AI infrastructure, a pattern we've tracked closely in our coverage of Tesla and Alphabet's own earnings-related selloff this week. A shaky macroeconomic backdrop and elevated tensions between the U.S. and Iran have pushed oil prices higher, fueling inflation concerns and souring risk appetite broadly across markets.

There's a specific technical factor adding pressure too. Only about 5% of SpaceX shares became available for public trading at IPO, and up to 911.5 million additional shares could become eligible for sale once lockup restrictions begin lifting around August 6, according to Startup Fortune's reporting on the timeline. That looming supply increase is part of why many investors expect the stock to keep drifting toward $100.

In my four years in sales at a research and advisory firm, I heard directly from CMOs and CEOs about what they wanted from AI, and one theme came up constantly: leadership wanted proof that AI investment translated into measurable value, not just impressive demos. SpaceX's stock decline is a real-time illustration of what happens when public markets stop taking that translation on faith. Even a company with Musk's track record and genuine technical credibility isn't immune to investors demanding clearer evidence that AI spending converts to actual returns.

For businesses evaluating their own AI investments, this is worth watching as a broader signal. If public markets are increasingly discounting AI ambitions that lack clear, near-term economic justification, expect that same scrutiny to filter down to private company valuations and vendor selection criteria too.

SpaceX shares have fallen nearly 50% from their June peak, and Morgan Stanley says a further drop to $100 would mean investors are valuing the company's entire AI business, including Grok and its Cursor stake, at zero or negative. The decline reflects a broader market rotation away from companies with massive AI infrastructure spending amid macroeconomic uncertainty. An estimated 911.5 million additional shares could become eligible for sale around August 6, adding further pressure on the stock.