Morgan Stanley expects SpaceX's stock to rise by more than 100%. What does Cursor have to do with this?

Morgan Stanley maintains a positive outlook on SpaceX shares and believes that the expansion of the company’s AI business—including the acquisition of Cursor—could drive significant share price growth. The bank reaffirmed its price target of $300, which implies more than a twofold increase from the closing price on August 11.

As investors learn more about the development of Cursor and related SpaceX AI projects such as Grok, the potential for narrowing the valuation discount on SpaceX’s AI business is becoming apparent, according to Morgan Stanley analyst Adam Jonas, whose views are cited by CNBC. According to Jonas, this could lead to a significant rise in SpaceX’s stock price.

A Morgan Stanley analyst maintained an "Overweight" (above-market) rating on SpaceX shares and a price target of $300, which implies a more than twofold increase from the closing price on August 11.

However, according to Jonas, most investors do not yet view SpaceX’s AI business as a standalone source of significant revenue growth outside the cloud provider market segment. Morgan Stanley believes this creates the potential for a positive revaluation of the stock as new data on the division’s progress becomes available.

On June 16, just a few days after its record-breaking IPO, SpaceX agreed to acquire Cursor, the developer of a popular AI programming tool, for $60 billion in stock. The deal is expected to strengthen the space company’s AI business following its merger with xAI, the developer of the Grok chatbot, and boost SpaceX’s competitiveness against leading AI labs OpenAI and Anthropic, CNBC notes.

According to Morgan Stanley’s estimates, more than 60% of Fortune 500 companies and approximately 50,000 businesses use Cursor. In November 2025, Cursor reported that its annual revenue, calculated at the current growth rate, had exceeded $1 billion. Morgan Stanley forecasts that by the end of the year, Cursor’s annual recurring revenue (ARR) will grow to $8 billion, and by 2030, to approximately $33 billion. Following the acquisition, the startup will generate $2.5 billion in revenue for SpaceX this year and $13 billion in 2027, accounting for approximately 10% and 19% of total projected AI revenue in those years, according to Morgan Stanley’s calculations.

SpaceX shares fell 4% at the close of trading on August 11 and are now trading below their IPO price of $135.

Morgan Stanley's positive outlook is in line with the general sentiment among Wall Street analysts. Of the 36 analysts covering SpaceX, 29 recommend buying the stock, according to CNBC.

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