NextFin News - SpaceX’s stock has fallen far enough to turn Morgan Stanley’s valuation math into a blunt test of what investors think the company’s artificial intelligence arm is worth. The bank’s framing suggests that a $100 share price would leave essentially no value for the AI business, a striking conclusion for a company whose latest filing shows launch, satellite connectivity and AI now sit inside one public equity story. The issue is not only whether the stock can recover. It is whether the market has started to treat the AI piece as a capital sink rather than a growth driver.
That debate has sharpened because the numbers in SpaceX’s filing are hard to ignore. The company reported $18.674 billion of revenue in 2025 and $4.694 billion of revenue for the quarter ended March 31, 2026. It also reported a consolidated operating loss of $1.943 billion in that March quarter. Inside that filing, the AI segment - which includes xAI - posted $818 million of revenue, a $2.469 billion operating loss and a $609 million adjusted EBITDA loss in the first quarter. By contrast, the Connectivity business generated $3.257 billion of revenue and $1.188 billion of operating income in the same quarter, while the Space segment brought in $619 million and remained loss-making. The split is what makes the current valuation fight so sharp: one part of the company is already cash-generative, while the AI leg is still burning capital at scale.
SpaceX’s shares, meanwhile, have lost momentum quickly after their June debut. Bloomberg’s reporting on July 24 said the stock touched $110.85 earlier in the week, or 18% below the IPO price of $135. That is the kind of move that usually looks like a routine post-listing reset. But here the drop has a second meaning. Once the market starts putting a low or even zero value on the AI business, the share price becomes less about enthusiasm cooling and more about a fight over the equity’s internal pieces. The stock is not only being discounted; the company’s business mix is being repriced.
The question, then, is whether this is a temporary washout or the start of a more durable reassessment. The short answer is that the selloff itself looks cyclical: newly listed shares often move from narrative pricing to cash-flow pricing, especially when the first public filings reveal losses, capex and complexity that private-market investors could ignore. The AI discount, however, looks more structural. That is because the market is not reacting to a single bad quarter. It is reacting to a business line that has not yet shown a credible path to narrowing losses fast enough to justify a meaningful contribution to equity value.
Why The $100 Level Matters
The $100 level matters because it creates a clean sum-of-parts message. Above it, investors can still argue that the market is paying something for AI optionality. Around it, that argument weakens. Below it, the message becomes harsher: the market is valuing the profitable connectivity core and assigning little or nothing to the AI business. That is not the usual language of a growth stock. It is the language of a business that the market wants to separate into pieces.
SpaceX’s filing gives that separation real content. Connectivity produced $11.387 billion of revenue in 2025 and remained profitable in the March quarter. The Space segment, which includes launch, still depends on heavy spending and posted a $662 million operating loss in the quarter on $619 million of revenue. The AI business sits between those poles, but in the wrong direction: $818 million of quarterly revenue sounds promising, yet the $2.469 billion operating loss says the segment is far from self-funding. The value debate is not about whether AI matters in the abstract. It is about whether SpaceX can support an AI business that is still consuming far more capital than it generates.
That is why Morgan Stanley’s framing lands so forcefully. If the stock trades near $100, the market is making a statement that the AI unit has not earned a positive multiple. The connectivity business can already justify a large chunk of the equity on its own. The AI piece has to fight for the rest. In practical terms, the market is treating the company less like an integrated platform and more like a portfolio in which the most visible profits subsidize the least proven ambition.
The analysts said the selloff had driven SpaceX near a level that would imply investors are assigning no value to its artificial intelligence business.
That is the core message. The stock is not merely down. It is being used as a referendum on whether the AI business deserves to sit inside the same valuation framework as the company’s profitable core.
Is The Repricing Cyclical Or Structural?
The first move is cyclical; the second may be structural. SpaceX’s trading pattern after the IPO fits a classic post-listing fade. Shares often surge on debut, then lose altitude when the market shifts from story to disclosure. A 50% surge in the first three sessions followed by a sharp pullback is not rare for a freshly listed stock with a large valuation and a complicated balance of businesses. That part of the move can reverse if risk appetite improves or if buyers decide the selloff overshot fundamentals.
The AI discount is harder to dismiss as a temporary wobble. The loss profile is too large to ignore. SpaceX reported a $2.469 billion operating loss in the AI segment in the March quarter and $6.355 billion of losses for the AI segment in 2025. Those numbers do not describe a business that is merely early in its life. They describe a business that is still absorbing large costs without yet proving the scale required to narrow them. In that sense, the valuation reset is not just about sentiment. It is about whether investors believe the AI segment belongs in the company’s public equity story at all.
The strongest counter-thesis is straightforward: this is just the normal way expensive IPOs trade once the lockup-era enthusiasm gives way to the discipline of public markets. On that view, the selloff has less to do with AI and more to do with rate sensitivity, positioning and profit-taking after a huge debut. The stock can easily bounce if the broader market turns or if investors decide the connectivity business is strong enough to carry the rest. That is a real objection, and it fits the first few weeks of trading better than any grand thesis about structural skepticism would.
But the counter-thesis does not fully explain why the market is focusing on the internal business split. A normal de-rating would compress the whole company’s multiple; it would not necessarily force investors to ask whether the AI unit is worth zero. That question is the new piece. It suggests the market is not just asking how much the stock should trade down. It is asking whether the AI segment should be capitalized at all inside the current framework. If the next filing shows the AI loss falling below $1 billion in a quarter while revenue stays above $1 billion, the structural-discount thesis weakens. If losses stay in the billions, the market’s skepticism is likely to harden rather than fade.
What The Market Is Pricing Beyond The Headline
The second-order effect is bigger than one stock. Once the market assigns little or no value to the AI business inside SpaceX, it changes the template for other companies that try to bundle profitable infrastructure with high-burn AI initiatives. Investors become less willing to accept a simple "growth platform" label and more willing to demand separate proof for each business line. That matters for valuation, capital allocation and governance. It also matters for how quickly a company can keep raising capital when the market starts valuing the most mature unit and discounting the rest.
The mechanism is simple but powerful. The connectivity business throws off profits. The launch business absorbs capital. The AI business burns the most cash. When those pieces are housed together, the market anchors on the part it can measure best - the profitable connectivity core - and then applies a steep haircut to the rest. That is not just a direct response to losses. It is a second-order repricing of the company’s internal hierarchy. In other words, the market is deciding which business line gets to lead the valuation and which one has to earn its way in later.
That sequence matters across time horizons. Near term, the stock can rebound simply because post-IPO overshoots often mean-revert. Medium term, the value of the company will depend on whether the AI segment can narrow losses and show a more believable monetization path. Long term, the question is whether investors will keep tolerating a single equity story that combines a profitable satellite network, a strategic but loss-making launch business and an AI operation that still looks too expensive to carry its own weight.
SpaceX’s filing showed that its AI segment, which includes xAI, posted $818 million of revenue in the March 2026 quarter and a $2.469 billion operating loss.
That is the number that keeps pulling the debate back to earth. A business can be loss-making and still deserve a premium if the losses buy time and scale. But the premium shrinks fast once the market decides the losses are too large, too persistent or too detached from a clear payoff.
Who Is Exposed, Who Benefits, And What Changes The View
The most exposed investors are the ones who bought the IPO as a bundled story and assumed that AI would automatically lift the whole company’s valuation. They now face a market that is separating the cash-generating core from the capital-intensive edges. The immediate beneficiaries are the skeptics who want to value the connectivity business without paying much, if anything, for the AI unit until its economics improve. That is a narrower, more cautious way to own the story, but it is also the one the market seems to be gravitating toward.
The base case is continued valuation pressure as the market absorbs the filing, the losses and the possibility that the AI business will need more time and capital before it contributes meaningfully. The upside case is a stabilization if the stock finds a floor near the recent low and investors decide the connectivity business alone supports a substantial valuation. The downside case is a deeper de-rating if the AI segment keeps producing multi-billion-dollar losses and the market concludes that the zero-value framing was too generous, not too harsh.
The signals that matter are clear. In the short term, watch whether the stock can hold above $110.85, the recent low cited in the market reporting. In the medium term, watch the next filing for any meaningful reduction in AI losses. If the next quarter still shows losses in the billions, the market is likely to keep treating the AI business as a drag rather than an asset. If the losses narrow materially, the market can revisit the valuation and assign more than symbolic value to the AI piece.
The broader lesson is uncomfortable but simple. The market is no longer asking only what SpaceX can become. It is asking which parts of SpaceX deserve to be paid for now.
At $100, the company would not just look cheaper. It would look more like a verdict on the AI story than on the space story.
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