[Click e-Stock] "Blue Wave Concerns Overblown... Maintain Overweight on SpaceX"

Korea Investment & Securities maintained its “Overweight” rating, saying concerns about a “Blue Wave” surrounding SpaceX were excessive.

According to Korea Investment & Securities on Nov. 9, SpaceX shares on the New York Stock Exchange had fallen 12.5% over two days amid concerns that approvals for data centers in Texas could be halted. The decline wiped about $240 billion off the company’s market capitalization. The concerns over disruption to SpaceX’s Texas operations grew after Gina Hinojosa, the Democratic winner of the Texas gubernatorial election, campaigned on a pledge to halt data center approvals.

However, analyst Park Gwang-nam of Korea Investment & Securities said the drop was excessive relative to the impact on earnings. “Even assuming a one-year delay to 2.6 GW, the largest capacity at Starbase, the reduction in EBITDA in 2027-2028 would be about $3 per share,” Park said. “That is one-sixth of the $17.7 per-share decline over the past two days.”

Moreover, the data center freeze had already begun in August and September, before the election, when then-Republican Gov. Greg Abbott ordered it administratively. “Hinojosa can continue the freeze in the same way immediately after taking office, without any need to amend the law,” Park said. “But enshrining it in law would be difficult because Republicans retained 19 of the 31 seats in the state Senate.” He said a permanent ban was unlikely, given the composition of the state Senate and permitting agencies.

“Because the operating facilities are outside Texas, there will be no impact on 2026 earnings, and the impact of Texas on 2027 earnings will be limited to Starbase,” Park said. As of the end of September, all 1.7 GW of operational compute capacity was located in Tennessee and Mississippi. Lease revenue from Anthropic and Google also comes from these facilities. “Assuming a one-year delay, estimates for 2027 revenue from AI solutions and infrastructure would fall by 3.90-20.4%, but the total investment would remain unchanged, with only the timing of its deployment deferred,” he explained.

The key variables are the pace of securing new sites and power. “For 2027 earnings, the disclosure of previously undisclosed sites and the pace of securing power will have a greater impact than the Blue Wave,” Park said. “The near-term points to watch are this week’s hearing by the Mississippi permitting commission, the ERCOT audit results on Dec. 10, and the first directive issued immediately after the governor takes office on Jan. 19.”

This content was produced with the assistance of AI translation services.