Morgan Stanley backs SpaceX as Wall Street sees massive upside ahead

Elon Musk’s SpaceX has secured fresh buy ratings from several major Wall Street banks, with Morgan Stanley assigning a base-case price target of $300 as the stock prepares to join the Nasdaq-100 Index.

According to research notes released by Morgan Stanley, Goldman Sachs, Citigroup, and other investment banks, analysts expect further gains for SpaceX despite the stock pulling back after its recent rally.

The latest recommendations come just before the company enters the Nasdaq-100, an event that JPMorgan estimates could trigger about $4.3 billion in automatic purchases by passive investment funds.

Morgan Stanley sees Starship and Starlink driving long-term value

Morgan Stanley initiated coverage of SpaceX with an Overweight rating. Analyst Adam Jonas set a $300 base-case price target and a $600 bull-case target, implying substantial upside from the stock’s latest trading price.

According to Jonas, SpaceX’s investment case is supported by the economics of the Starship launch program, the expansion of Starlink’s satellite network, and the company’s role in building infrastructure for space-based artificial intelligence.

Goldman Sachs also started coverage with a Buy rating and a $205 price target. Analyst Eric Sheridan wrote that SpaceX is well positioned across the space, connectivity, and artificial intelligence industries, adding that each of those markets has the potential to become “multiple trillion-dollar opportunities over a 5+ year time horizon.”

Bullish coverage extended beyond those firms. Citigroup assigned a Buy rating with a 12-month price target of $200, while UBS and Wells Fargo also initiated coverage with positive recommendations, adding to growing institutional support for the newly listed company.

Nasdaq-100 entry could drive billions in passive fund buying

Attention has also turned to SpaceX’s scheduled inclusion in the Nasdaq-100 Index on July 7. 

According to a Nasdaq announcement, the company qualified under updated index rules that allow certain large newly listed companies to enter the benchmark after just 15 trading days following their public debut.

JPMorgan estimates that exchange-traded funds and index funds tracking the Nasdaq-100 will need to purchase about $4.3 billion worth of SpaceX shares once the rebalancing takes effect.

The bank said the buying is expected to occur around the July 6 market close and July 7 opening, as passive funds such as the Invesco QQQ Trust are required to match the revised index regardless of their view on the company’s valuation. SpaceX is expected to enter the benchmark with an index weighting below 1%.

Despite the wave of bullish analyst ratings, SpaceX shares came under selling pressure. The stock closed Monday down 0.98% at $160.42, trimming its weekly gain to just over 2% after profit-taking. By early Tuesday afternoon, however, the stock had fallen 5.31% to $151.90 after the market opened, extending losses even as investors digested its Nasdaq-100 inclusion.

Derivatives trading also pointed to cautious sentiment. SPCX USDC perpetual contracts on Hyperliquid traded about 3.15% lower at $159.17, with trading volume reaching roughly $284 million at press time.

Meanwhile, the crypto market remained firm alongside developments surrounding SpaceX. 

Bitcoin held above its 200-week moving average at $62,865 and traded near $63,300 after reaching a 24-hour high of $64,597. Trading volume stayed more than 70% higher as Grayscale argued that Strategy’s recent Bitcoin sales could help establish a market bottom.