Morgan Stanley: SpaceX's $100B Louisiana Site an Unpriced Catalyst for Orbital AI

Morgan Stanley believes SpaceX's planned $100 billion Starbase facility in Louisiana is a strategic milestone that investors have yet to fully appreciate, positioning the company as a major, undervalued play on orbital artificial intelligence infrastructure. Analyst Adam Jonas stated in a note, "We do not believe investors appreciate the scale of what SpaceX is planning with Starship."

A Strategic Milestone

The proposed facility, to be located on former ExxonMobil property in Louisiana's Vermilion Parish, represents a massive expansion of SpaceX's launch capabilities. Construction is slated to begin in 2027, with the first launches targeted for 2029.

Key details of the planned complex include:

• Up to 10 launch pads across five launch complexes.
• The creation of an estimated 3,000 direct jobs.
• A strategic location in the third-largest natural gas producing state, critical for sourcing the liquid methane fuel required for Starship launches.

Morgan Stanley noted that the headline $100 billion investment is a cumulative figure spread over a decade, from 2026 to 2035. While this represents nearly all of the firm's modeled space-related capital expenditures for SpaceX in that period, it accounts for just 2% of the company's total projected capex when AI infrastructure is included.

The Orbital AI Thesis

Ad

The core of Morgan Stanley's argument is that the expanded launch capacity is not just for traditional missions but is a crucial enabler for a future orbital computing business. The firm projects that orbital compute will account for more than 80% of SpaceX's launch revenues starting in 2032, far surpassing satellite deployment and resupply missions.

According to the bank's model, each incremental gigawatt (GW) of orbital compute capacity could add $27 to the SPCX share price. Morgan Stanley's own forecast for SpaceX's compute capacity by the end of fiscal 2027 is 4.9GW, well below SpaceX's internal target of nearly 10GW, suggesting significant potential upside if the company executes on its plans.

Financial Context and Risks

Morgan Stanley's analysis frames SPCX, trading near its IPO price, as an "orbital AI call-option" that the market has yet to value. The firm maintains a $137 price target on the stock. To fund its ambitious expansion, the bank's model assumes SpaceX will require an average of roughly $80 billion per year in net debt issuance.

However, the note acknowledges significant execution risks. "Large capex numbers are easy to announce on paper, but the growth needs to materialize for SpaceX and the debt markets to continue to justify it," Jonas wrote. Investors will be closely watching for the start of construction in 2027 and the company's progress toward its AI compute targets as key tests of the thesis.