Key Highlights
- Shares of SpaceX advanced 1.6% Monday following Elon Musk’s disclosure that the firm will pursue power-turbine casting and blade production.
- GE Vernova shares declined 1.5% while Howmet Aerospace dropped 7.5% in response to the news.
- ARK Invest purchased approximately $27 million worth of SPCX shares; Wall Street consensus stands at “Moderate Buy” with a $220.20 mean price target.
- The company delivered 91.9% revenue growth year-over-year in its most recent quarter, surpassing EPS projections by $0.17.
- An upcoming September 9 lockup expiration will increase the publicly traded float to approximately 17.7%, potentially triggering downward pressure.
Shares of SpaceX (SPCX) gained 1.6% during Monday’s session, reaching an intraday peak of $144.13 before settling at $143.69, following CEO Elon Musk’s declaration that the company intends to expand into power-turbine casting and blade production.
Space Exploration Technologies Corp., SPCX
Through a social media statement, Musk indicated that “Casting of blades and vanes is the most limiting factor for power until solar AI satellites are launched at scale.” Investors interpreted this as a clear indication that SpaceX plans to compete directly with incumbent industrial manufacturers.
Market participants responded swiftly. Shares of GE Vernova retreated 1.5%, while Howmet Aerospace plummeted 7.5% during the trading session.
Manufacturing components internally is nothing new for SpaceX. According to RBC analyst Ken Herbert’s estimates, the firm fabricates approximately 90% of its rocket hardware in-house, a stark contrast to the roughly 40% internal production rate seen in Boeing aircraft. This aggressive vertical integration strategy sits at the heart of SpaceX’s operational philosophy.
Adrian Helfert, chief investment officer at Westwood Holdings Group, offered this perspective: “We’re going through a new consideration in manufacturing production.” He noted that conventional approaches involving streamlined supply chains and third-party component sourcing face mounting challenges.
The firm is simultaneously constructing a Texas-based foundry dedicated to gas-turbine components, a facility that could alleviate power-equipment bottlenecks connected to its artificial intelligence data center initiatives.
Wall Street Coverage and Fund Activity
Cathie Wood’s ARK funds acquired roughly $27 million in SPCX shares during Monday’s trading. Institutional accumulation accelerated throughout the second quarter, with entities such as Hyperion Asset Management establishing a fresh position valued at more than $201 million.
Among sell-side analysts, Bernstein reaffirmed its Outperform stance while Morgan Stanley continues projecting additional gains. Cantor Fitzgerald maintains a $246 price objective, and Bank of America holds a Buy recommendation with a $235 target. However, sentiment isn’t universally positive. Citigroup lowered its rating to Sell in August, and DZ Bank initiated coverage with a Sell designation alongside a $100 price objective. The aggregate view from 41 analysts registers as “Moderate Buy” with a mean target of $220.20.
In its latest quarterly results disclosed August 4, SpaceX reported $7.81 billion in revenue, reflecting 91.9% year-over-year expansion. The company recorded a per-share loss of $0.09, outperforming the consensus expectation of a $0.26 loss by $0.17.
Potential Challenges
Several obstacles merit attention. A lockup expiration scheduled for September 9 will expand the publicly available float to roughly 17.7% from current levels. Following an approximately 30% rally in August, this influx of shares could exert downward pressure on pricing.
Additional concerns surround the Cursor acquisition, the coding platform deal. OpenAI has allegedly moved to terminate model access for Cursor amid security issues involving Russian hackers. This controversy, partially linked to the continuing Musk-Altman tensions, may diminish the transaction’s perceived value.
During Tuesday’s premarket session, SPCX traded approximately 1% lower, while both the S&P 500 and Dow Jones Industrial Average declined roughly 0.5%.
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