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Morgan Stanley posed two questions in the survey, the first one asking which of the two companies seemed a more attractive investment. The second question asked which company had a more valuable long-term potential.
According to a survey conducted by Morgan Stanley (NYSE: MS), SpaceX will eventually become more valuable than electric automaker Tesla Inc (NASDAQ: TSLA). The survey sought information from institutional investors and industry experts who consider the aerospace company a more attractive investment. Tesla and SpaceX, both owned and led by Elon Musk, currently have valuations of $858 billion and $100.3 billion, respectively. The latter attained its current market cap following a secondary share sale. However, Adam Jonas, an analyst at Morgan Stanley stated in a Tuesday note:
“The majority of our clients (by survey and client discussions) believe SpaceX could ultimately command a higher valuation and significance than even Tesla.”
Furthermore, Jonas cites the current economic and global optics as a major influencing factor in the survey’s responses.
“Investors are beginning to appreciate the potentially wide-ranging use-cases for SpaceX’s reusable launch architecture across communications, transportation, earth observation and other space-related domain,” said he.
Morgan Stanley posed two questions in the survey, the first one asking which of the two companies seemed a more attractive investment. The second question asked which company had a more valuable long-term potential. Out of 32 respondents of the Morgan Stanley survey, 63% picked SpaceX over Tesla for both questions. In light of this, Jonas concluded by saying:
“From our investor conversations, the sentiment on SpaceX has increased substantially along with the company’s valuation in the private market.”
Recent Project Developments at SpaceX Seem to Buttress Morgan Stanley’s Tesla Assertion
SpaceX is fast-asserting itself as a bigwig in the global space industry. In addition, its steadily-increasing valuation now makes it the second most valuable private company in the world, according to CB Insights. SpaceX’s valuation especially surged over the past few years, as the company raised enormous funds to work on projects. Two of its most capital-intensive ones, which gulped up billions, are Starship and Starlink.
The Starlink initiative encompasses SpaceX’s objective to build an ‘ecosystem’ of global internet networks. These interconnected internet networks will rely on thousands of satellites – dubbed “constellation” in the aerospace industry. Subsequently, the aforementioned constellation will provide high-speed internet to end-users anywhere on the planet. So far, SpaceX has launched 1,740 satellites, with over 100,000 consumers in 14 countries participating in a public beta. In addition, the service charge currently stands at approximately $100 per month.
SpaceX’s second massive project, Starship, is the gigantic, futuristic rocket that the company is developing. Starship will ferry people and cargo to the moon as well as Mars. SpaceX is currently testing prototypes at a southern Texas facility and has already conducted several short test flights. In light of this, the company is ready to explore orbit in its next rocket test and is awaiting regulatory approval.
Jonas stresses the importance of a steady influx of funds to actualize the set goals of the company.
“In our view, having access to nearly unlimited sources of capital will be an extremely important part of the narrative around building the space economy,” added he.