Morgan Stanley initiated coverage of SpaceX (SPCX) on Tuesday with an Overweight rating and a $300 price target, marking the most bullish call among Wall Street’s biggest investment banks. The move comes as SpaceX joins the Nasdaq 100 index, cementing its position among America’s most prominent publicly traded companies. Lead analyst Adam Jonas delivered the target in a note titled “AI’s Final Frontier” that landed Tuesday morning, implying 87% upside from Monday’s close of around $160.

The Morgan Stanley team argues SpaceX holds an “X of 1” position in space infrastructure. The firm frames the rocket launch company as one that can transform energy into intelligence through data centers using solar power. Jonas highlighted the company’s “near-monopoly launch economics, the world’s largest LEO satellite network, and a fast-scaling AI infrastructure business,” describing them as one integrated infrastructure stack. The lengthy research note structures SpaceX into four distinct operational areas that together form the basis for the ambitious valuation.

Starship Launch Economics Drive Future Growth

The launch business depends heavily on the development of Starship, SpaceX’s largest rocket to date. Jonas expects the vehicle to become operational in the fourth quarter of this year. Launch costs should fall to roughly $500 per kilogram by 2030 and under $150 by 2040. This dramatic cost reduction accompanies a massive ramp in operational capacity, with total Starship launches scaling from 46 in 2027 to more than 6,000 annually by 2040.

The Morgan Stanley team sees the Starlink network evolving into the default connectivity layer for virtually every device beyond the reach of terrestrial infrastructure. This satellite constellation represents a critical component of SpaceX’s long-term revenue model, extending internet access to remote regions and mobile platforms globally. The firm believes this connectivity advantage will drive substantial recurring revenue streams as adoption accelerates across consumer, commercial, and government sectors.

Terrestrial AI Data Centers Offer Hidden Value

Morgan Stanley contends the market underappreciates SpaceX’s data center economics, particularly in what the firm calls “terrestrial AI” or land-based data centers. The firm estimates cost per watt at half the industry average, excluding chips. Deployment speeds run six to eight times faster than peers thanks to vertical-integration initiatives. These initiatives include Terafab for chip building and Solarfab for solar equipment, giving SpaceX competitive advantages in both cost structure and time-to-market.

The enterprise AI segment represents the fourth pillar of Morgan Stanley’s SpaceX thesis. The firm sees “neocloud rental deals” – including recent agreements with Anthropic and Google – giving way over time to more comprehensive end-to-end AI services. The $60 billion Cursor acquisition stands out as an asset the market has yet to fully price, with annual recurring revenue of $4 billion, up from around $500 million a year ago.

Revenue Projections Reach Trillion-Dollar Territory

Morgan Stanley projects SpaceX revenue climbing aggressively from $45 billion this year to $319 billion in 2030 and $3.3 trillion by 2040, with operating margins approaching 59%. These forecasts depend on SpaceX inventing entirely new markets for connectivity and physical AI services that do not exist today. Jonas concedes this point, acknowledging the speculative nature of the long-term projections while maintaining confidence in the company’s execution capabilities and market positioning.

UK Assembles Major Taskforce for Tokenization Push

In a separate but equally significant financial markets development, the United Kingdom is pushing tokenization harder in a bid to integrate the technology with wholesale financial markets through an HM Treasury initiative. The group includes over 50 financial firms such as BlackRock, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley, and UBS. Chris Woolard, HM Treasury’s Wholesale Digital Markets Champion and former FCA chair, leads the initiative designed to position London at the forefront of financial innovation.

The 54-firm group, backed by the City of London Corporation, will spend the next year working on live tokenization use cases across UK financial markets. The initial focus centers on tokenized repo, according to the first of two reports by Woolard’s office. This practical approach aims to demonstrate real-world applications rather than theoretical frameworks, potentially accelerating institutional adoption of blockchain-based settlement systems.

Tokenization Market Could Reach $88 Trillion

The stakes in the race to tokenize financial markets are substantial. Estimates by Boston Consulting Group suggest the tokenized real-world assets (RWA) market could reach $88 trillion by 2035. That figure would dwarf the current crypto and stablecoin market of $3 trillion, representing a nearly 30-fold expansion over the next decade. Other jurisdictions including the United States and European Union are examining how to integrate tokenization into traditional finance, creating a competitive dynamic among global financial centers.

John Orchard, chairman of the Digital Monetary Institute at OMFIF, an independent research group for central banking, economic policy, and public investment, views the UK government’s commitment as potentially critical to London’s survival as a financial center. He highlighted what he sees as the most material distinction from other jurisdictions in an email statement.

“I would say the most material and interesting distinction from e.g. Europe or US is the commitment of the government to issue its own debt in DLT form (DIGIT), so that there is a high quality ‘safe’ asset to start to build a wholesale capital market around. This is meaningful and useful,” Orchard said via email.

Productivity Gains Drive UK Government Support

The main opportunities center on productivity and cost efficiencies which could benefit global trading centers like London. The UK government’s assumption that prowess in this area is no longer a niche sport represents a significant shift in policy thinking, according to Orchard. By committing to issue government debt in distributed ledger technology (DLT) form through the DIGIT program, the UK aims to create a high-quality “safe” asset that can anchor a broader wholesale capital market built on tokenization infrastructure.

The convergence of SpaceX’s ambitious space infrastructure plans and the UK’s tokenization push illustrates how traditional and emerging technologies are reshaping financial markets. Both initiatives depend on long-term vision, substantial capital investment, and willingness to build entirely new market structures. Whether Morgan Stanley’s $300 SpaceX target or the $88 trillion tokenization market materializes remains to be seen, but institutional commitment from major banks and governments signals serious intent behind both transformative opportunities.

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