Key Highlights

● Morgan Stanley analyst Adam Jonas reiterated his Overweight rating and $300 price target on SpaceX.

● Elon Musk confirmed early talks with Taiwan Semiconductor Manufacturing to join his Terafab chip venture.

● SpaceX outpaced peers Rocket Lab and AST SpaceMobile, which had no company-specific news.

SpaceX shares jumped on Monday, Oct. 5, after Morgan Stanley's Adam Jonas reiterated his bullish call with a $300 target and Elon Musk confirmed early talks with TSMC about his Terafab chip venture.

A bullish note and a busy day

Space Exploration Technologies (NASDAQ:SPCX) jumped on the Nasdaq-100 on Monday, though reports differed on exactly how far. Some showed a bigger gain at the close than others reported during the day.

The clearest driver was Wall Street support. Morgan Stanley analyst Adam Jonas reiterated his Overweight rating with a $300 price target. He reportedly called the stock "cheap and getting cheaper."

The rocket maker also kept up a busy launch pace. SpaceX completed three launches in 13 hours.

The Terafab angle

Elon Musk added to the buzz by confirming early talks with Taiwan Semiconductor Manufacturing (NYSE:TSM) about joining Terafab, his Texas chip-manufacturing venture. Terafab is meant to Supply chips to Tesla (NASDAQ:TSLA), SpaceX and xAI.

"Just discussions, but something may come of it," Musk said.

The news rippled across the chip sector. TSMC's US-listed shares rose, while Intel (NASDAQ:INTC) fell. Intel has been Terafab's only named manufacturing partner since April, and investors worried it could lose that exclusive role.

Separately, reports said SpaceX renamed its AI unit, though that detail was not confirmed by all sources.

SpaceX outpaced other space names. Rocket Lab slipped and AST SpaceMobile nudged higher, with no company-specific news for either.

SpaceX is part of the Nasdaq-100 but not the S&P 500. Its gain helped a Nasdaq-100 that closed at a record 31,076.44 on Monday.

The wider market

The Nasdaq Composite jumped 286.45 points to a record 27,477.31, led by mega-cap AI names. Nvidia (NASDAQ:NVDA) rose to a record close. The S&P 500 added 51.23 points to 7,773.95, just shy of its summer record, and the Dow rose 90.94 points to 51,267.90.

Treasury yields remained a headwind for many stocks, with the 10-year yield rising to its highest level since 2002. Friday's weak jobs report, showing payrolls up just 29,000, cut bets on an October Fed hike, but Monday's ISM services prices-paid index hit 74.0, the highest since July 2022.

Daniela Hathorn, senior market analyst at Capital.com, said: "growth stocks are rallying because Fed expectations have softened, while the Risk-Free Rate against which those valuations are judged remains exceptionally high."

The Musk ecosystem

Tesla also rose on Monday, and talk of a possible combination between Tesla and SpaceX continued to swirl. Musk has said publicly, "Obviously, we can't talk about combining companies." Analyst reports and prediction markets kept the topic in the headlines, but no deal has been announced.

Cerebras Systems (NASDAQ:CBRS), another AI-linked name, also rose after OpenAI CEO Sam Altman called it "a close partner" on social media, showing how quickly comments from tech leaders can move stocks.

For now, the Terafab talks and the Morgan Stanley note gave traders plenty to chew on, keeping SpaceX firmly in focus on the Nasdaq-100.

What to watch

Investors will watch for any update on the TSMC talks and whether Terafab adds a new manufacturing partner. Launch cadence and further analyst commentary could also move the stock.

On the macro side, minutes from the Fed's September meeting are due Wednesday, Oct. 7 at 2 p.m. ET, and the Fed meets again Oct. 27 to 28. Earnings season begins in earnest with the big banks from Oct. 13.