SPCX Stock Hasn’t Bottomed Out Yet, But It’s ‘A Really Great Time To Buy,’ Says This Asset Manager

• The asset manager said Morgan Stanley’s $300 price target ‘probably isn't that crazy,’ given SpaceX’s potential merger with Tesla and its ability to keep innovating.
• Morris said he isn’t ‘entirely convinced’ by SpaceX’s statement on payback period for its AI spend, adding the market goes beyond just SpaceX and there are bound to be ‘some losers’.
• Morris also dismissed concerns that SpaceX’s volatility could discourage other high-profile AI companies like OpenAI and Anthropic from going public.

SpaceX (SPCX) shares may see further downside in the near term, but one asset manager believes the recent pullback presents an attractive opportunity for investors willing to look beyond the current volatility.

“I don't think this is the bottom for the price that we’ve seen,” Alex Morris, CEO and CIO of F/m Investments, said in an interview with CNBC on Friday. “But if you’re looking at this as a long-term investment, now is probably a really great time to buy.”

The comments come after SpaceX shares have fallen about 27% since its listing as investors remain concerned about the company's aggressive AI spending.

Notably, the stock closed higher by over 6% on Thursday after the first lock-up expiration.

At the time of writing, SPCX stock was trading around 1.5% in pre-market trading on Friday.

Morris Backs $300 Price Target On A 5-10 Year Outlook

Morris said Morgan Stanley’s $300 price target “probably isn't that crazy on a five- or 10-year outlook,” given SpaceX’s potential merger with Tesla and the company’s ability to keep innovating.

Last month, Morgan Stanley analyst Adam Jonas reiterated the firm’s ‘Overweight’ rating on the stock as well as the $300 price target, describing SpaceX as “uniquely positioned across launch, connectivity, and AI.” 

Options, ETFs Could Lead To Volatility

However, Morris cautioned that the stock could remain volatile with more options and leveraged ETFs coming online.

“Certainly, as options come online, as the levered ETFs come online, as they become more popular, you're going to see more volatility,” he said.

AI Spending Remains A Key Concern

SpaceX reported second-quarter revenue of $7.81 billion, up 92% year over year and ahead of analysts’ expectations of $6.82 billion, according to Fiscal.ai. However, the company spent $15.8 billion on AI infrastructure during the quarter, lifting total capital expenditures to $18.4 billion.

While management said those investments should generate payback in less than a year, Morris remained cautious.

“I'm not entirely convinced by the payback period. Certainly, the addressable market for AI compute is massive… But there’s a lot of spend going on in the AI space beyond just SpaceX,” he said, adding that “there have to be some winners and some losers. And it’s really hard to guarantee to be a winner when everyone is running around spending as much money as they are.”

IPO Pipeline Intact Despite SPCX Volatility

Morris also dismissed concerns that SpaceX’s volatility could discourage other high-profile AI companies from going public.

He said OpenAI and Anthropic are still expected to pursue IPOs, adding that some SpaceX investors may already be selling shares to free up capital for those offerings.

“And certainly, I think we see some space investors who are selling to free up that capital. That said, there's going to be a rush for those securities when they come out. We expect them to have the usual first day pop that we've seen in SpaceX. And that's just IPO mania,” Morris said. 

Retail sentiment on Stocktwits flipped to ‘extremely bullish’ from ‘bullish’ amid ‘extremely high’ message volumes.

SPCX shares are down more than 48% from their all-time high of $225.64

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