SpaceX's long-term growth potential may extend beyond spaceflight, satellite communications and AI compute to include the industrial opportunities created by America's rebuilding of advanced manufacturing. Morgan Stanley believes the market is currently focused more on the capital expenditure pressure from projects such as Terafab, while potentially underestimating the link between these investments and the reconstruction of US manufacturing, as well as the long-term growth potential that this brings.

The report summarizes this round of US manufacturing rebuilding as "Tera'Merica." This concept is not limited to the reshoring of the semiconductor industry, but also covers fields including rockets, satellites, ground stations, turbines, autonomous vehicles, industrial robots, humanoid robots, ships and drones. As AI extends from digital applications into physical production, improving America's advanced manufacturing capabilities requires not only chips, but also supporting factories, equipment and critical supply chains.

This provides SpaceX with a broader space for growth imagination. The company's spaceflight, satellite communications and AI infrastructure businesses intersect with the above industrial layout; projects such as Terafab may further strengthen its positioning in chip manufacturing and AI compute. Morgan Stanley believes that when assessing the value of these investments, one should not look only at short-term capital expenditure, but should also consider their support for the company's long-term business expansion.

Based on this judgment, Morgan Stanley maintains an "Overweight" rating on SpaceX with a price target of $300.

"Tera'Merica": US Manufacturing Rebuilding Goes Far Beyond Chip Reshoring

The report links this trend to the "Physical Intelligence Economy" (PIE), namely driving AI to extend from digital applications into real-world production activities. Achieving this transformation requires long-term investment in factories, equipment and critical materials supply chains, involving industries far beyond semiconductors.

For SpaceX, this is related both to manufacturing projects such as Terafab and may also provide broader development space for its spaceflight, satellite communications and AI infrastructure businesses. However, there is still a long way to go from technological progress to large-scale automated production.

The report cites Tesla's Austin factory as an example, noting that the plant has more than 20,000 employees. According to analysts' understanding, the Cybercab production line has not yet used Optimus humanoid robots, and production still relies on collaboration between robotic arms and manual labor. This shows that there is still a gap before robot autonomous manufacturing reaches large-scale application, that technology implementation will take time, and that it also depends on workforce skill transformation and further maturity of AI manufacturing tools.

AI Compute and Enterprise AI: Another Growth Mainline for SpaceX's Valuation

In addition to the long-term opportunities brought by US manufacturing rebuilding, Morgan Stanley is also bullish on the potential value of SpaceX's enterprise AI and compute expansion. The report argues that the capital expenditure of projects such as Terafab should not be viewed only as a cost burden; the key lies in whether these investments can be converted into compute supply and new commercial revenue.

Enterprise AI is one important source of valuation. According to the report's estimates, at a share price of about $170, the market assigns SpaceX's enterprise AI business an implied sales multiple only in the low-to-mid single-digit range, reflecting investors' still cautious outlook on its commercialization prospects.

Compute expansion provides more specific valuation space. The report estimates that if 1 gigawatt (GW) of nominal compute is added, based on $50 per watt of investment, a 70% incremental profit margin and a 10x EBITDA valuation, it could add about $27 to value per share. Morgan Stanley expects SpaceX's AI compute scale to be about 4.9 gigawatts by the end of fiscal 2027, while the company's target is close to 10 gigawatts. The gap between the two implies potential growth space, but the ultimate value still depends on construction progress, actual costs and compute monetization capability.

Based on sum-of-the-parts valuation across four major business segments — spaceflight, connectivity services, X and consumer AI, and enterprise AI — Morgan Stanley gives a $300 price target. Although enterprise AI is an important part of the valuation, the report still applies a 50% valuation discount for its execution risk.

Risks should not be ignored either, including Starship and Starlink business progress falling short of expectations, slower commercialization of enterprise AI, rising compute construction costs and increased financing needs. Overall, Morgan Stanley's bullish logic has two layers: enterprise AI and compute expansion provide relatively direct growth potential, while the US manufacturing rebuilding represented by "Tera'Merica" constitutes a longer-term industrial imagination space. Whether the two can be converted into actual value still depends on SpaceX's execution capability and commercialization progress.