Morgan Stanley Research / Tesla Inc: Tesla vs. SpaceX: Sentiment Pushes the Final Frontier

19 Oct 2021 | Adam Jonas CFA | Kristine T Liwag | Landon Park | Simon Flannery | Matthew Sharpe | Billy Kovanis | Evan Silverberg CFA, CPA | Grace G Kim | Alexander Zoeckler
Tesla Inc: Tesla vs. SpaceX: Sentiment Pushes the Final Frontier
From our investor conversations, the sentiment on SpaceX has increased substantially along with the company’s valuation in the private market. Our client survey revealed nearly â…” feel SpaceX could be a more valuable company than Tesla (currently >$900bn cap). What happens after Starship is launched?

On Monday morning (Oct. 18th), we distributed a survey to our email distribution list, comprised of institutional investors and industry experts, asking two multiple choice questions:

Question 1: Which do you think is a more attractive investment from here: Tesla or SpaceX?

  • A. TSLA
  • B. SpaceX

Question 2: Which do you think has the potential to be a more valuable company over the long term: Tesla or SpaceX?

  • A. TSLA
  • B. SpaceX

We distributed the survey at 10:33 PM EST on Monday, October 18th and received 32 responses.

Survey Results:

  • 63% of survey responses believe SpaceX is currently a more attractive investment.
  • 63% of responses believe SpaceX has the potential to be a more valuable company than Tesla.

A few thoughts from our side:

  • It’s been 4 years since we published Space: Investment Implications of the Final Frontier. At that time, we really struggled to get any of our clients interested in the theme. Fast forward to 2021 and there is growing interest in Space with our equity investment clients… particularly around SpaceX.
  • 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 domains.
  • SpaceX is clearly seen as the ‘Apex Player’ in the global space business… to the point where it is now one of the most valuable private companies in the world.
  • While our client distribution list may not be representative of the entire market, the majority of our clients (by survey and client discussions) believe SpaceX could ultimately command a higher valuation and significance than even Tesla. Tesla is the world’s most valuable industrial/manufacturing company today.
  • 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.