SpaceX shares surge after Morgan Stanley labels stock undervalued

Why Morgan Stanley sees hidden value in SpaceX

SpaceX stock jumped 7.6% on October 5, 2026, closing at its highest level since mid-June following a bullish note from Morgan Stanley that called the company’s shares „cheap.” The rally pushed Elon Musk’s net worth back above the trillion-dollar mark for the first time in months, according to CNBC reporting. The gain reflects renewed investor confidence in SpaceX’s long-term growth prospects amid ongoing Starship development and Starlink expansion.

Morgan Stanley analysts argued that SpaceX’s valuation does not fully reflect its dominant position in launch services and satellite broadband, citing strong revenue visibility from government contracts and commercial demand. They noted that despite recent test flight setbacks, the company’s iterative development approach continues to de-risk the Starship program. The firm maintained an overweight rating with a price target significantly above current trading levels, suggesting further upside potential.

What risks remain despite the optimistic outlook?

The brokerage highlighted SpaceX’s vertically integrated model as a key advantage, reducing reliance on external suppliers and lowering launch costs over time. Analysts pointed to Starlink’s growing subscriber base, now exceeding 4 million globally, as a recurring revenue stream that could fund future R&D. They also emphasized the strategic importance of national security launches, which provide stable cash flow amid commercial market fluctuations. Internal projections cited in the note suggest operating margins could expand substantially as flight frequency increases.

Despite the upgrade, Morgan Stanley acknowledged risks including regulatory delays in launch licensing, potential setbacks in Starship’s orbital flight tests, and increasing competition in the satellite broadband sector. The firm noted that macroeconomic factors affecting consumer spending could influence Starlink’s growth trajectory in certain markets. However, they concluded that SpaceX’s technological lead and execution discipline position it to withstand near-term volatility while capturing long-term aerospace market share.

What caused SpaceX stock to rise sharply on October 5, 2026? The stock rose after Morgan Stanley issued a research note labeling SpaceX shares as „cheap” and maintaining an overweight rating, which sparked renewed investor buying.

Frequently Asked Questions

How did the stock gain affect Elon Musk’s net worth? The increase in SpaceX’s share price restored Elon Musk’s net worth to over $1 trillion, returning him to trillionaire status after a period below that threshold.

Is Morgan Stanley’s bullish view on SpaceX shared by other analysts? While Morgan Stanley took a notably positive stance, other firms have expressed more caution due to execution risks in Starship development and valuation concerns, though many agree on the company’s long-term potential.