SpaceX Stock Fell to Its Lowest Level Since August After the Midterms. Is It Time to Buy?
Key PointsDemocrats in charge of key states and the federal legislature could curb the AI build-out at the center of SpaceX's growth.
Elon Musk's recent donation to Republican candidates following the midterm elections has raised concerns about potential regulatory challenges for his companies, including SpaceX and Tesla. SpaceX's stock price has fallen to its lowest level since August, prompting speculation about whether it is a prudent time to invest. The company's growth is heavily reliant on selling AI infrastructure to third parties, but Democrats have proposed moratoriums on AI data centers, which could impede SpaceX's expansion plans.
Musk has ambitious goals for SpaceX, aiming to deploy 10 gigawatts of compute capacity by the end of 2027, but this rapid growth could be hindered by regulatory obstacles. Additionally, SpaceX's dependence on a single customer, Anthropic, and the lack of sustainable revenue growth, given its reliance on a current supply shortage, raise questions about the stock's valuation of 51 times trailing sales.
While SpaceX's technology and capabilities are noteworthy, the stock appears expensive and susceptible to a cycle of growth and risk.
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