Musk Challenges Morgan Stanley: SpaceX to Hit $3.5 Trillion Revenue by 2033

SpaceX founder Elon Musk publicly responded to Morgan Stanley's latest research report, arguing that the bank's timeline for the company's revenue scale is overly conservative. This public discussion around SpaceX's valuation and growth potential has once again thrust the private space company's commercial prospects into the market spotlight.

Morgan Stanley analyst Adam Jonas gave SpaceX an "Overweight" rating with a $300 price target in the latest report, predicting the company's revenue will reach $3.5 trillion by 2040. After the report's release, X platform user Aaron Burnett pointed out that Morgan Stanley's forecast is based on assumptions that are almost half of SpaceX's own targets, and the timeline is about 10 years later than the company's internal plans. Musk responded on X: "My personal estimate is that revenue of around $3.5 trillion will be achieved around 2033."

This statement implies that Musk believes the company will reach that revenue scale about seven years earlier than Morgan Stanley's forecast. For investors, if Musk's judgment is closer to reality, the valuation discount implied by the current stock price would be even more significant. Morgan Stanley's report noted that SpaceX's current stock price is about $138, corresponding to roughly 10 times projected 2028 revenue, with the implied valuation of the enterprise AI business at nearly zero.

Morgan Stanley: SpaceX Undervalued, $300 Price Target

Morgan Stanley maintained its "Overweight" rating on SpaceX in the latest report, with a $300 price target, representing more than double the current stock price of about $137.95. The report uses a sum-of-the-parts valuation, breaking SpaceX into four major business segments: space launch, Starlink connectivity, AI (including X and Grok), and enterprise AI, with corresponding valuations of $8, $118, $8, and $165 per share, respectively.

The report argues that the current stock price assigns nearly zero value to the enterprise AI business, and the option value of the orbital compute business is also not priced in. Morgan Stanley estimates that each additional 1GW of orbital compute capacity (calculated at $50 per watt, 70% incremental margin, and 10x EBITDA valuation) would contribute about $27 to the stock price, equivalent to about 20% of the current price.

The report also notes that SpaceX currently trades at about 10 times projected 2028 revenue, corresponding to a revenue growth rate of about 70%; and at about 25 times projected 2028 EBIT, corresponding to a profit growth rate of about 113%. Morgan Stanley believes this valuation level is attractive for a company with such a steep growth trajectory.

Louisiana $100 Billion Base: Strategic Leap in Launch Capability

The direct trigger for the report is SpaceX's announcement to build a new launch site, Starbase LA, in Vermilion Parish, Louisiana, with a total investment of $100 billion, planned to break ground in 2027 and conduct its first launch in 2029. The site will feature up to 10 launch pads (5 launch complexes, each with 2 pads), along with propellant production facilities, power plants, and employee housing, expected to create about 3,000 direct jobs.

Morgan Stanley points out that even without relying on the Louisiana site being fully operational, its forecast of about 5,800 Starship launches per year by 2040 would require only about 8 launch pads. SpaceX currently has 15 planned launch pads across Texas, Florida, and Louisiana.

Choosing Louisiana has multiple strategic considerations. First, the state's geographic location allows polar orbit launches southward over the Gulf of Mexico, covering dawn-dusk sun-synchronous orbits that are difficult to achieve from Texas, Florida, or California, which has direct value for the orbital compute business. Second, Louisiana is the third-largest natural gas producing state in the U.S., and each Starship launch consumes over 1,000 tons of liquid methane. Third, amid bipartisan resistance to data centers and AI infrastructure in multiple states, diversifying the jurisdiction of launch facilities helps reduce regulatory risk. Additionally, Louisiana has tailored a series of incentive policies for SpaceX, including sales tax rebates for large space facilities, extension of industrial tax exemptions to space manufacturing, and liability protection clauses for specific lawsuits.

Starship: Core Support for Cost Reduction Logic and Launch Scale

Morgan Stanley's valuation logic relies heavily on Starship's cost reduction path and increased launch frequency. The report predicts that Starship's cost per kilogram to launch will drop from about $1,000 in 2025 (Falcon 9 internal cost) to about $500 by 2030 (corresponding to 341 launches), below $200 by 2035 (corresponding to about 2,600 launches), and further below $150 by 2040 (corresponding to about 6,000 launches).

Morgan Stanley likens reusable rockets to an "elevator to space," arguing that Starship, with a maximum payload capacity more than five times that of Falcon 9 and a fully reusable design where both the first and second stages can be recovered, has the realistic potential to compress launch costs by nearly another 10 times.

In specific assumptions, Morgan Stanley takes a relatively conservative stance. The report assumes that Starship spacecraft will have an effective service life of less than 2 flights between 2027 and 2029, 3 flights in 2030, 4 flights in 2031, and only reach about 43 flights by 2040; for boosters, the report assumes SpaceX will need about 8 years to achieve reuse levels of over 30 flights, roughly consistent with Falcon 9's historical iteration pace.

The report also notes that SpaceX has announced the completion of Falcon 9's final Starlink launch mission from Florida, and all future Starlink launches from Florida will be conducted by Starship. Since each Starship launch has a downlink capacity up to 25 times that of Falcon 9, this transition has a relatively limited impact on overall launch frequency.

Orbital Compute: The Next Trillion-Dollar Growth Engine

Morgan Stanley positions orbital compute as a core variable in SpaceX's long-term valuation, listing it in the report as the primary driver of launch demand after 2032. The report argues that the core competitive advantage of orbital compute is not absolute cost parity with terrestrial compute, but scalability and speed of deployment.

The report cites two new cloud computing contracts signed by SpaceX, noting that customers are willing to pay a significant premium for immediate access to large-scale, high-end GPU clusters, which mirrors the logic of SpaceX's launch business being able to raise prices periodically even as costs continue to decline. Morgan Stanley predicts that SpaceX's orbital compute capacity will reach 4.9GW by the end of 2027, while the company's own target is about 10GW.

Morgan Stanley also cautions that the $100 billion Louisiana site investment will be spent in tranches over 10 years, equivalent to the total capital expenditures for SpaceX's space business in its model from 2026 to 2035, but only about 2% of total capital expenditures including AI spending over the same period. The report acknowledges that large-scale capital expenditure plans are easy to announce on paper, but growth must actually materialize to continue justifying the investment for SpaceX and the debt markets.