Elon Musk’s SpaceX has received new buy ratings from several major Wall Street banks, with Morgan Stanley offering a $300 price target as the stock prepares to join the Nasdaq-100 Index.
Summary
- Morgan Stanley leads Wall Street’s new buy calls with a $300 base-case and $600 bull-case target for SpaceX.
- JPMorgan estimates that the Nasdaq-100 listing could result in approximately $4.3 billion in passive fund purchases.
- SpaceX shares fell ahead of the index’s opening despite bullish analyst estimates and strong institutional interest.
According to research notes issued by Morgan Stanley, Goldman Sachs, Citigroup, and other investment banks, analysts expect more profits for SpaceX despite the stock retreating after the recent meeting.
The latest recommendations come shortly before the company’s entry into the Nasdaq-100, an event that JPMorgan estimates could generate as much as $4.3 billion in automatic purchases by passive investment funds.
Morgan Stanley sees Starship and Starlink driving long-term value
Morgan Stanley initiated coverage on SpaceX with an Overweight rating. Analyst Adam Jonas set a $300 price target and a bull case target of $600, indicating a significant upside from the stock’s recent trading price.
According to Jonas, SpaceX’s investment case is supported by the economics of the Starship launch program, the expansion of the Starlink satellite network, and the company’s role in building space-based artificial intelligence infrastructure.
Goldman Sachs resumed coverage with a buy rating and a $205 price target. Analyst Eric Sheridan wrote that SpaceX is well positioned in the space, connectivity, and artificial intelligence industries, adding that each of those markets has the potential to be “multi-trillion-dollar opportunities over the next 5+ years.”
Bullish coverage has extended beyond those firms. Citigroup assigned a buy rating with a 12-month price target of $200, while UBS and Wells Fargo resumed coverage with positive recommendations, adding to growing institutional support for the newly listed company.
The entry of the Nasdaq-100 can drive billions to buy a useless fund
Attention also turned to the planned inclusion of SpaceX in the Nasdaq-100 Index on July 7.
According to Nasdaq’s announcement, the company qualified under revised index rules that allow certain large newly listed companies to enter the bench after 15 trading days following their public offering.
JPMorgan estimates that exchange-traded funds and index funds that track the Nasdaq-100 would have to buy about $4.3 billion worth of SpaceX shares once the valuation takes effect.
The bank said the purchase is expected to take place at the close of the market on July 6 and the opening of the market on July 7, as passive funds such as 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 bench with an index weight of less than 1%.
Despite a wave of bullish analyst ratings, SpaceX shares have come under selling pressure. The stock closed Monday down 0.98% at $160.42, trimming its weekly gain to just over 2% after taking profits. By Tuesday afternoon, however, the stock was down 5.31% to $151.90 after the market opened, extending losses 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 about $284 million at press time.
Meanwhile, the crypto market remained strong alongside the developments surrounding SpaceX.
Bitcoin held above its 200-week moving average at $62,865 and traded near $63,300 after hitting a 24-hour high of $64,597. Trading volume remained over 70% higher as Grayscale asserted that Strategy’s recent Bitcoin sales could help establish a bottom in the market.
