Elon Musk’s announcement that SpaceX (SPCX) will produce its own turbine blades triggered market concerns over potential order losses and weakened bargaining power for aerospace precision parts giant Howmet Aerospace (HWM), sending Howmet’s stock price down more than 7% in a single day. However, multiple Wall Street institutions believe the market reaction is overblown. The sharp current stock price volatility more reflects an immediate emotional宣泄 over uncertainty, while the actual fundamental impact still requires observation of subsequent specific developments.
In a weekend post, Musk stated that SpaceX and Tesla are each working to build 100 gigawatts of solar power capacity annually, but natural gas power generation will remain a key support for bridging the power gap in the coming years. He pointed out that the casting of turbine blades and vanes is the primary bottleneck constraining turbine production increases, and that if SpaceX produces these components in-house, it could advance the commissioning timeline of natural gas turbine units by up to 18 months. Previous reports had already indicated that SpaceX was building a blade and vane casting facility in Bastrop, Texas, and Musk’s remarks officially confirmed this strategic intent for the first time at the official level. The facility is reportedly set to serve a planned 20-gigawatt power project, primarily supplying electricity to artificial intelligence data centers, with a target completion date by the end of 2027.
Howmet is one of the very few companies globally with the capability to cast high-temperature-section blades and vanes for industrial gas turbines, forming a highly concentrated supply landscape alongside Berkshire Hathaway’s Precision Castparts and others, with Howmet being the only publicly traded company among them. The gas turbine business has become Howmet’s fastest-growing segment: first-quarter revenue surged 39% year-over-year, with full-year 2025 growth at 25%. The robust demand from AI data centers for rapidly deployable power has created a supply shortage for turbine components, supporting Howmet’s pricing power and stock performance. SpaceX’s entry could theoretically divert future orders from Howmet and erode the pricing advantage currently driven by supply shortages.
Bernstein unequivocally views the selloff as overdone, with analysts pointing out that SpaceX’s move actually confirms the tightness of the turbine blade market supply rather than any dissatisfaction with Howmet’s products. Bernstein emphasizes that Howmet has long-term supply agreements with major industrial gas turbine manufacturers, with some contracts extending through 2030; the company has already brought new capacity online since the second quarter, and at least six additional expansion plans are expected to be implemented before the fourth quarter, collectively boosting blade production capacity by as much as 38% compared to the first quarter of 2025. The firm also questions whether SpaceX can achieve mass production at scale within 18 months, arguing that these components have extremely high technical barriers and that SpaceX is unlikely to engage in the full process chain, including complex coating processes. Bernstein maintains an “Outperform” rating and has raised its price target sharply from $248 to $328.
Jefferies offers a more cautious timeline estimate, with analysts calculating that SpaceX’s in-house products are expected to take approximately four years to reach the market. Deutsche Bank believes the market concerns are “far less daunting than they appear on the surface,” stating that SpaceX may still choose to collaborate with existing blade manufacturers, and even if it succeeds in building its own capabilities, its positioning is more likely to be vertical integration to meet its own power needs rather than becoming a commercial supplier to the industry.
