Deutsche Bank: “Buy SpaceX”; price target: $250

[Financial News]  

Deutsche Bank recommended buying SpaceX on the dip, saying the sell-off sparked by the “blue wave” in the U.S. midterm elections had gone too far.
According to Investing.com on the 6th (local time), Deutsche Bank reaffirmed its “Buy” rating and $250 price target in an analysis note, despite SpaceX shares plunging after the midterm elections.
SpaceX plunged 3.8% to $135.92 on the 4th, the day after the midterm elections, then tumbled more than 9% on the 5th to $123.62.
However, that day the shares rebounded more than 7% and traded in the $132 range.
Deutsche Bank noted that concerns were mounting that SpaceX CEO Elon Musk’s substantial support for Republicans in this election would become a political liability for the company, but said that was not the case in practice. SpaceX has contracts for rocket launches and satellites with federal operating agencies—including the National Aeronautics and Space Administration (NASA), the United States Space Force, and the National Reconnaissance Office (NRO), which is part of the Department of Defense—that are outside Congress’s direct control.
It added that there were no suitable alternatives to SpaceX, so congressional budget cuts could only harm U.S. national interests.
Deutsche Bank also judged that the election of Democrat Gino Inohosa as Texas governor on a platform of regulating artificial intelligence (AI) data centers would not pose a major problem, since most of SpaceX’s computing capacity would be located outside Texas next year. Of the planned 10 gigawatts (GW) of capacity, 9 GW would be built outside Texas. Deutsche Bank also forecast that Texas would evaluate projects more rigorously than before rather than ban data center plans outright.
In an interview with CNN, Governor-elect Inohosa said the focus would be on protecting Texas residents while maintaining a pro-business stance.
Deutsche Bank emphasized that SpaceX would benefit if growth in U.S. computing capacity slowed. It explained that as constrained computing capacity supply drove prices up, SpaceX could build computing capacity faster and more cheaply than its competitors.

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