SpaceX shares soar 11% as Wall Street bets on Musk’s ’real-world’ AI ambitions

Investing.com -- SpaceX shares surged 11% following a major Wall Street endorsement of its artificial-intelligence capabilities and renewed investor enthusiasm over its expanding suite of enterprise software products.

The rally was sparked by a research note from Morgan Stanley arguing that public markets are severely underestimating SpaceX’s AI enterprise platform, alongside comments from Chief Executive Elon Musk teasing the launch of the company’s flagship model, Grok 4.7.

The market response highlights a shift in how institutional investors evaluate SpaceX, viewing it less as a pure-play aerospace and satellite hardware provider and increasingly as a vertically integrated tech giant combining proprietary data, global network infrastructure, and frontier AI models.

Wall Street Re-Evaluates SpaceXAI

In a note to clients, Morgan Stanley equity analyst Adam Jonas argued that recent product rollouts from the company’s AI division, SpaceXAI, demonstrate a broader software engine that the market has yet to properly price in.

Crucial to that thesis is the beta launch of Grok Bot—an always-on virtual assistant capable of executing complex workflows inside cloud environments. Currently available to SuperGrok Heavy, Cursor Ultra, and Cursor Teams Premium subscribers on desktop and iOS, the tool coordinates multi-agent systems to handle complex tasks automatically.

“Grok Bot is less a standalone product than early evidence of a broader AI platform combining unique real-time data with vertically integrated compute, connectivity, and intelligence, none of which the market is meaningfully valuing today,” Mr. Jonas wrote.

While critics have drawn comparisons between Grok Bot and competing agentic tools from standalone AI laboratories, Morgan Stanley stressed that SpaceX possesses two structural advantages that insulate it from commoditization:

1. Proprietary, Real-Time Data Pipelines: A continuous feedback loop spanning X (formerly Twitter), Starlink network telematics, and Cursor’s developer network.

2. A Physical-World Moat: A vertically integrated stack combining low-cost compute with Starlink’s global orbital connectivity, accelerated by multi-year infrastructure advantages in space.

The note followed a Morgan Stanley primer on SpaceX’s acquisition of code-editing platform Cursor. The firm estimates Cursor will reach $8 billion in annual run-rate (ARR) by the end of the year and scale to $33 billion by 2030, leveraging an enterprise foot in the door that already includes 50,000 businesses and roughly two-thirds of the Fortune 500.

Valuation Disconnect

According to Morgan Stanley’s sum-of-the-parts analysis, investors are currently pricing SpaceXAI at valuations below those of standalone "neocloud" peers.

Stripping out SpaceX’s core launch and Starlink connectivity businesses—valued by the bank at $127 per share, or 52 times estimated 2028 Ebitda—leaves a residual valuation of just $12 per share for its Consumer and Enterprise AI units. That equates to roughly 1 times estimated 2028 enterprise value-to-sales.

Mr. Jonas framed an upcoming lock-up expiration as an attractive buying window rather than a risk factor, calling it "a rare entry point into a generational compounder that converts energy into swarming."

Musk Points to ’Real-World’ Engineering Edge

Adding fuel to the market momentum, Mr. Musk took to social media to outline the roadmap for Grok 4.7, set for release later this month. He emphasized that SpaceX’s physical hardware operations and proprietary technical datasets give its models a distinct edge over rivals.

"Grok 4.7 will exceed all current models," Mr. Musk wrote on X. "That said, Anthropic is a great company and will probably release improved models soon. However, the SpaceX training corpus is so awesome & unique that I would be shocked if any model is better at real-world engineering than 4.7."

The comments align with SpaceX’s rapid release schedule. The company rolled out Grok 4.6, a 1.5-trillion parameter model designed for enhanced coding, terminal management, and enterprise workflows. Priced at $2 per million input tokens, Grok 4.6 scored a 61 ELO on the Artificial Analysis Intelligence Index, positioning it alongside top-tier frontier models.

With the Cursor acquisition expected to close within weeks, market attention now turns to SpaceX’s near-term product cadence, which includes the wider release of Grok 4.7 later this month and the planned launch of Grok 5 before the end of the year.