SpaceX Stock Fell to Its Lowest Level Since August After the Midterms. Is It Time to Buy?

Key Points:

• Elon Musk donated over $445 million to Republican candidates in the 2024 midterms, including $200 million in Texas, but Democrats won control of the U.S. House, Senate, and Texas governorship, potentially increasing regulatory challenges for his companies SpaceX and Tesla.
• SpaceX shares fell below their June IPO price post-election, reflecting investor concerns about regulatory risks, particularly around AI data center moratoriums supported by incoming Democratic officials that could hinder SpaceX's planned rapid expansion of compute capacity.
• SpaceX's growth heavily depends on AI infrastructure sales to a few major customers like Anthropic and Alphabet, with contracts cancellable on short notice, posing customer concentration and revenue sustainability risks amid easing compute supply shortages.
• The company's ambitious plans for orbital data centers rely on the still unproven Starship rocket technology, which is critical for reducing launch costs and enabling scalable space-based compute deployment but remains in the testing phase.
• Despite Musk's optimistic revenue forecasts, SpaceX's stock trades at a high valuation (51 times trailing sales), suggesting that investors may be underestimating the cyclical risks and regulatory hurdles that could impact the company's future growth trajectory.