SpaceX is concluding its purchase of Cursor, an AI coding business that Elon Musk paid $60 billion (€52bn) for. SpaceX may change the name of the company, but the news prompted investment bank Morgan Stanley to look again at its valuation of SpaceX and an impressive $600 per share.

The purchase of Cursor is expected to close within days, and then be formally absorbed into SpaceX’s existing AI division.

Cursor has informed staff at an all-hands meeting that SpaceX could complete its buyout of the company imminently, while outlining plans to integrate teams and potentially phase out the Cursor brand for future software releases.

“Cursor’s journey from ‘harness’ to ‘frontier’ model may be a major factor bridging the 330% upside to our $600/share bull case,” said Morgan Stanley’s report (by analyst Adam Jonas).

“We view the SpaceX enterprise opportunity as a full end-to-end platform for builders spanning software, intelligence, compute, connectivity, and the physical world, where we expect network effects to accrue in the application layer more than in the models themselves,” continued the report. “As investors see more breadcrumbs on the Cursor/Grok story, we see potential for the implied valuation discount on SpaceX’s AI business to lift, driving potentially substantial appreciation of the stock. From our conversations, very few investors are bullish on SpaceX’s AI business beyond neocloud, resulting in an upside skewed catalyst path at these levels. The catalyst path is shaping up elegantly, in our opinion, as more progress on Cursor can be shared following closing of the transaction (expected within next few weeks) and we see further milestones with subsequent model releases.”

“As code generation becomes more commoditised, we think value may accrue to the layer that owns the data and deployment, which is where Cursor sits today. Over time that could support products beyond the editor, such as charging for work delivered rather than seats sold, unattended code maintenance, or a hosted platform for others’ tools. In the combined SpaceX enterprise platform, Grok provides the intelligence layer, X the real time data, SpaceXAI compute the infrastructure, Starlink the connectivity across global agents, and through partnerships with Tesla a path into physical AI, with space a scale accelerant over time. Our $33 billion 2030 Cursor ARR estimate does not assume any of this,” concluded the report.

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