How to Play SpaceX Stock after Democrats Sweep Midterm Elections

Elon Musk spent big to shape the midterms, but the results did not go as planned. Musk was the biggest donor to GOP candidates and causes, with contributions topping $470 million, according to the Financial Times. Most of the candidates backed by Trump lost, according to a CNBC report. 

Wall Street noticed as shares of SpaceX (SPCX) and Tesla (TSLA) were down significantly. In fact, the two stocks lost more than $450 billion in combined value over the last two trading sessions. 

So is this dip a warning or a buying opportunity? The answer depends on which part of the SpaceX story you trust.

Why SpaceX Stock Fell After the Midterms

According to CNBC:

• Democrats won control of the House and the Senate, and the losses hit even closer to home for Musk.
• In Texas, where SpaceX and Tesla are headquartered, Democrats James Talarico and Gina Hinojosa beat longtime Musk allies Ken Paxton and Gov. Greg Abbott
• Investors now worry Musk could face new congressional probes and stricter rules for his companies.
• Hinojosa "made data centers a major campaign issue," Deutsche Bank analysts wrote. She called for a pause on new approvals until lawmakers pass stricter rules on water use, electricity costs, and local control.
• SpaceX and Tesla are building artificial intelligence (AI) infrastructure in Texas, which includes plans for Terafab, a data center and a chip factory in Grimes County. SpaceX also plans a supercomputer at Starbase.
• Deutsche Bank warned that SpaceX's Texas compute capacity could face delays and capital expenditures might also rise to meet tougher rules.

CNN also reported that Musk and SpaceX were told to preserve records about limits placed on a military version of Starlink in Ukraine. And scrutiny could complicate a SpaceX and Tesla merger. Musk said on the Oct. 20 earnings call that Tesla would need a vote of 50% of all shares to complete the potential merger.

Musk’s net worth topped $1 trillion soon after SpaceX went public. His net worth is currently estimated at $800 billion as per Forbes. 

What SpaceX's Q3 Results Show

Valued at a market cap of $1.7 trillion, SpaceX reported revenue of $14.6 billion in Q3 of 2026, an increase of 161% year over year. Over the last 12 months, it swung from a $1.1 billion loss to a net income of $4.4 billion in Q3. 

It reported an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $8.8 billion, an increase of 306% year over year. Starlink added 1.6 million consumer subscribers and ended Q3 with 13.6 million subscribers. 

The AI segment reported revenue of $7.6 billion, while the company ended the quarter with a backlog of $63 billion, $42 billion of which is expected within a year. SpaceX also guided first-quarter 2027 revenue to $33 billion to $37 billion. However, it also expects to spend more than $35 billion in capital expenditures in Q4 of 2026. 

Why AI Compute Demand Backs the Bull Case for SPCX Stock

CFO Bret Johnsen said new compute deployments pay back in under a year. Musk said short contracts are renewing at higher dollars per watt and explained that SpaceX could rent out its compute several times over.

Musk expects about 3 gigawatts of compute online by the end of this year. He is “highly confident” of adding another 10 gigawatts next year, which would bring the total to 13 gigawatts.

Johnsen said at the Goldman Sachs conference on Sept. 10 that most compute deals run about 90 days with a 90-day exit. Short contracts let SpaceX raise prices as demand grows. But they also let customers leave quickly.

Johnsen pointed to capacity coming online in Memphis and Southaven. The transcripts do not say what share of the 13 gigawatts is in Texas, which might be key for SPCX stock investors. 

Starship is also expanding to Louisiana, where Musk said the internal goal for a first launch is 2028.

How to Play SpaceX Stock Now

Here’s a framework that SpaceX stock investors can follow. 

• Separate politics from performance: The drop came from policy fear and not an earnings miss.
• Watch Starship Flight 15: Musk said on the Oct. 20 earnings call that Flight 15 is expected in November. SpaceX plans to try to catch both the booster and the ship. President Gwynne Shotwell said SpaceX expects the FAA license to cover a tower catch for both stages.
• Track Texas policy: A data center pause is the clearest threat to compute timelines and capex.
• Expect big swings: SpaceX and Tesla lost about $456 billion in combined market value in just days. Only invest what you could hold through a sharp drop.
• Note the orbital hedge: Johnsen said SpaceX targets its first orbital compute satellites next year, which could ease reliance on ground power and permitting.

The midterms changed the political weather around SpaceX. Investors should watch capex spending and whether Starship delivers another big win to change the mood. 

Out of the 40 analysts covering SpaceX stock, 27 recommend “Strong Buy,” three recommend “Moderate Buy,” eight recommend “Hold,” one recommends “Moderate Sell,” and one recommends “Strong Sell.” The average SPCX stock price target is $253, which is above the current price of $124. 

On the date of publication, Aditya Raghunath did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.