Morgan Stanley Backs SpaceX (SPCX.US): MARS and PIE Open New Narratives, Starship’s 15th Launch Becomes Key Catalyst

According to Zhihui Finance APP, Morgan Stanley has maintained an "Overweight" rating on SpaceX (SPCX.US) in its latest research report, with a target price of $300. The firm believes that the market still views SpaceX as a new type of cloud service provider with space capabilities and has not yet fully realized that the company is transforming towards “Manufacturing, Autonomy, Robots, Space” (MARS) and the “Physical Intelligence Economy” (PIE). Meanwhile, the 15th Starship flight, which plans to simultaneously capture both the booster and the ship for the first time, is regarded by Morgan Stanley as one of the most important catalysts in SpaceX's 20-year history.

Research focus shifts from “why” to “what”

The report opens with a quote from Musk: “If you ask the wrong question, you won't get the right answer.” Morgan Stanley notes that previous SpaceX reports focused on “why”, but this time the focus is on “what”. The report points out that over the past two to three months, client inquiries about SpaceX have been unexpectedly subdued, and most questions were not about SpaceX itself but about how SpaceX might impact industries such as turbines, data centers, or telecommunications. However, following the Q3 results and conference call, client interest has revived.

The report believes that the market still sees SpaceX as a new type of cloud service provider with space capabilities, while the company is undergoing a transformation that the market has not yet fully appreciated.

Four Key Words: proentropic, MARS, PIE, DVFS

Morgan Stanley stated in the report that SpaceX is a “proentropic” company, meaning one of the few enterprises whose value rises during periods of chaos and uncertainty.

The report says that SpaceX’s mission is to leverage physical agents (robots) and infrastructure from earth to space to transform energy (e) into intelligence (i) on a massive scale, thereby accelerating economic growth and avoiding stagnation.

MARS stands for Manufacturing, Autonomy, Robots, and Space. The report questions: which other company can combine all four attributes under one roof? It also suggests investors give more thought to the MARS framework.

PIE stands for “Physical Intelligence Economy”. The report notes that market attention is mostly focused on digital assistants that negotiate prices with online agents, summarize emails, or plan vacations, while only a few companies focus on “moving atoms”. The report emphasizes that atoms matter: drones, humanoid robots, or surgical robots cannot materialize out of thin air through “vibe coding”; these must be manufactured. Only the makers can share in the PIE.

DVFS stands for Dimensionality (breadth), Verticality (depth), Flexibility (pivotability), and Speed (mission and execution alignment). The report cautions that speed does not necessarily mean being “the fastest”—speed can also be deadly.

Data centers and new cloud may no longer be the focus a year from now

The report predicts that a year from now, SpaceX investors may no longer be discussing data centers and new cloud businesses. It considers new cloud construction more like a “financing strategy”: SpaceX can leverage its comparative advantage to maximize “intelligence per watt, per dollar, per second”; letting others pay for the computing infrastructure that SpaceX will ultimately use to train its own robots is, in Morgan Stanley's view, a great idea.

SpaceX and Tesla: The data and manufacturing flywheel

The report states that Tesla can be seen as a world-class advanced robotics manufacturer, producing cars, humanoid robots, etc., while collecting data from the physical world. Tesla FSD is widely regarded as the world’s largest physical superintelligence (SI) deployment. The report believes that this rapid recursive cycle of data feedback into manufacturing and process know-how is unique, and SpaceX provides the infrastructure, computing power, and connectivity layer to further accelerate this flywheel.

Impact on the economy and AI narrative

The report anticipates that future developments in the coming weeks and months will prompt the market to focus more on AI’s ability to impact the physical world, as well as the possibility that the next industrial revolution in the US and globally could create millions or even tens of millions of jobs. Morgan Stanley agrees with Musk’s view: PIE has a significant economic multiplier effect—even if it is not an exponential increase. The firm also notes that AI/SI trades currently face considerable public skepticism, and SpaceX helps to improve this situation; its role is clearly underestimated by the market.

The report suggests that investors seeking exposure to MARS and PIE themes can start with SpaceX and also pay attention to the “picks and shovels” of space.

Starship's 15th flight: A key catalyst

The report notes that Starship’s 15th flight is expected to take place in early November, at which time an attempt will be made to capture both the booster and ship simultaneously. Management has confirmed on a conference call that the “dual catch” will be attempted, and Musk says success is “more likely than not”. The report believes this is both the ultimate test of Starship reusability and likely to reduce the Total Addressable Market (TAM) risk of broader operations, making it one of the most important catalysts in SpaceX’s 20-plus-year history. It also states that with fundamentals in all major business lines accelerating, investors have an opportunity to reassess SpaceX prior to the flight.