Damo shouted that physical AI and space will become the “new electricity” of the economy! The target price for increasing SpaceX (SPCX.US) holdings is $300

The Zhitong Finance App learned that Morgan Stanley released a research report on physical AI, space, and SpaceX (SPCX.US), believing that the robotics and space industry will reshape the global economic landscape, and that its role is similar to electricity in the modern economy. The bank gave SpaceX an increase in holdings, with a target price of 300 US dollars. There is significant room for upward movement from the current price. The bank pointed out that the current pricing in the market only reflects the value of Starlink and aerospace business, and that the option value of corporate AI and orbital computing power is hardly included in the stock price. At the same time, it also suggests that the industry has multiple uncertainties such as technological iteration, geography, and commercialization falling short of expectations, and investors need to look dialectically at long-term industrial opportunities.

The bank believes that robotics and the space industry are far more than just another type of emerging technology. The two are deeply linked at the economic level, have significant military value, and may also have disruptive social effects. If we put aside artificial intelligence and the space industry to discuss the economy, it would be like putting aside electricity to interpret the modern economy. This industrial transformation may take decades to fully implement, but investors can lay out the layout now to allocate assets for the next frontier era.

On the eve of an era where artificial intelligence is about to move from the digital world to the physical world, the bank has compiled ten core principles for investors to refer to:

1. Any field that can be automated is likely to eventually be automated. Machines without artificial intelligence will be left over from the old days, just like Victorian steampunk mechanical devices. All machines that have significant economic value and undertake actual production work should be robots that can collect data and rely on artificial intelligence reasoning to form large-scale clusters of physical intelligence.

2. China and the US are likely to need cooperation. News headlines will still be filled with geographical fluctuations, but the bank judged that it is difficult for Chinese products and supply chains to be completely isolated from the US market. In the next few years, there is likely to be a situation where Chinese brand cars are produced in US factories, and robots assembled in the US will use a large number of Chinese gears, motors, magnets, sensors, and batteries.

3. China is a leader in the field of physical artificial intelligence. The US has a leading edge in cutting-edge artificial intelligence models, but the core of the robotics circuit is manufacturing. Various robots (detection equipment) collect data, send it back to the factory, complete technical upgrades through rapid cycle iteration, and stage a “robot Darwin evolution”. Five years from now, China's leading position in the field of artificial intelligence robots will probably increase even more than it is now.

4. The dual-use properties of physical artificial intelligence are remarkable. There is a lot of overlap between consumer grade, industrial artificial intelligence robots, and the defense sector, and there is no need to go into too much detail. I recommend everyone to refer to the analysis report of Morgan Stanley American Airlines defense analysts Christine Levager and Justin Long on autonomous weapon systems. It can be said that they have been extremely busy this summer.

5. The US must rebuild its domestic manufacturing capacity. To remain competitive on the physical artificial intelligence circuit, the US needs to rebuild local manufacturing on a large scale. There is a contradiction here: China's ambition to develop physical artificial intelligence may be the biggest driving force behind the recovery of the US manufacturing industry since World War II. This process is also expected to create millions of jobs in the US.

6. America's critical minerals supply chain needs to be restructured. Billions of robots put into use and millions of tons of payloads sent into space will increase demand for critical minerals by orders of magnitude. Ordinary investors will have a deeper understanding of the periodic table in the future.

7. Re-examine skilled jobs and the vocational education and training system. Society needs more electricians, plumbers, welders, construction workers, HVAC technicians, as well as astrophysicists, geologists, metallurgical experts, and manufacturing professionals. Rebuilding America's manufacturing industry requires a large number of workers with practical skills. According to the bank, the bottlenecks brought about by human resources education are seriously underestimated by the market.

8. Artificial intelligence faces public relations problems: When will the physical AI version of “$5 a day” arrive? Currently, social movements against artificial intelligence and data centers are frequently appearing in the news. In the early days of development, the automobile industry also faced numerous protests against the environment, safety, and employment security. The conflict was not resolved until 1914, when Henry Ford introduced a daily wage system of $5, bringing millions of workers into high-paying jobs. The physical artificial intelligence industry also needs a similar landmark event.

9. Focus on cross-industry collaboration. In the second industrial revolution (late 19th century to early 20th century), industry giants chose to work together: steel (Carnegie), automobiles (Ford), petroleum (Rockefeller), electricity (Edison), tires (Firestone), and various companies jointly built the critical infrastructure that the bank still relies on. The next generation of artificial intelligence is also inseparable from complex industrial collaboration, driven by competition, fear, interdependence, and profit-seeking opportunities.

10. Space plays a key role in the smart economy. The market has underestimated the value of space infrastructure to transform energy into intelligent computing power on a large scale. Space can provide free energy, a natural cooling environment, and a large space. There is no problem of neighboring protests on the ground at all. If SpaceX can recover the starship (expected around the 15th flight), the cost of using orbital space may drop by another order of magnitude.

What do you think of SpaceX stock?

Judging from the broad development context, this forecast predicts that in the next 10 to 15 years, as America catches up with its geographical rivals and reconstructs scientific research and commercial space capabilities, the US space economy is expected to create hundreds of thousands of high-paying technical jobs; the physical artificial intelligence and robotics industry may spawn millions of jobs.

Currently, the fundamentals of the space, satellite communications, and enterprise artificial intelligence business are full of momentum. Combined with the second-quarter earnings report, the lifting of the stock ban has not suppressed stock prices as the market previously feared. Investors should re-examine the investment value of SpaceX.

The current stock price is slightly below $150. The market sales ratio corresponding to the enterprise's artificial intelligence business is only in single digits, and the stock price hardly takes into account the potential option value of orbital artificial intelligence.

According to sensitivity estimates, each additional GW of rated computing power (calculated based on 50 US dollars/watt, calculated at an incremental profit margin of 70%, capitalized at 10 times EBITDA) can increase the share price by 27 dollars, which is approximately 20% of the current stock price. The bank predicts that the computing power will reach 4.9 GW by the end of fiscal year 2027, while the company's own target is close to 10 GW.

SpaceX uses business segments plus total valuation: space business, communications business, artificial intelligence business (splitting X&Grok and enterprise-level AI). The target price of $300 consists of $8 for space business, $118 for communications business, $8 for X&Grok business, and $165 for enterprise artificial intelligence business.

The forecast period is until 2040, and the valuation reference date is June 30, 2027; the weighted average cost of capital is 11.1%, and the cost of equity capital is 11.9%. Due to implementation risk considerations, a 50% valuation discount was given to the artificial intelligence sector of the enterprise. In terms of long-term growth rate, space business is 4.0%, communications business is 4.5%, X&Grok business is 3.0%, and enterprise artificial intelligence business is 5.0%. The corresponding EV/EBIT/growth rate ratio is 0.46.

The risks behind the opportunities are also prominent. The upward trend is highly dependent on the progress of Starship reuse, the expansion of Starlink users, and the commercialization of enterprise AI; once rocket iteration slows down, computing power and capital expenditure exceeds expectations, and the project construction cycle lengthens, the company will face greater financing pressure, leading to the risk of equity dilution. Furthermore, delays in regulatory approval and changes in geopolitical policies may disrupt the pace of business implementation.

Physical AI and space computing power are all long-term racetracks. It will take decades for industrial dividends to be released, and short-term results are difficult to achieve. For investors, SpaceX represents the right to future growth. It cannot simply apply the traditional technology company valuation framework; it is necessary to fully consider the potential losses of technology failure and commercialization falling short of expectations.