Following significant Democratic victories in the midterm elections, concerns have emerged on Wall Street regarding potential political retribution risks for Elon Musk, particularly affecting SpaceX. Despite a nearly 13% drop in SpaceX shares earlier in the week, they rose 6% in early trading on Friday.
Deutsche Bank analyst Edison Yu noted that the perceived risks might be more about public perception than actual threats, given Musk's dominant position in the rocket launch industry and his companies' primary dealings with the Republican-controlled executive branch. Yu maintained a buy rating on SpaceX stock with a price target of $250.
The recent election results in Texas, a traditionally Republican state, could impact the data center sector, where a significant portion of planned capacity is located. However, Yu indicated that SpaceX's computing operations are largely based outside Texas, mitigating any immediate impact on the company's estimates.
Ron Baron, a long-time supporter of SpaceX, also defended Musk against the backdrop of increasing Democratic criticism, highlighting the pressures Musk faces from newly elected officials