SpaceX Shares Slip as Midterm Results Threaten Terrestrial AI Data Center Expansion

Shares of SpaceX dropped 2% and Tesla fell 3% following United States midterm election results that signaled tightening political opposition to artificial intelligence infrastructure, according to an analysis reported by Yahoo Finance (https://www.tikr.com/blog/musk-says-data-centers-in-space-looking-pretty-appealing-right-now-as-spacex-sinks-on-blue-wave?ref=yahoofinance&tlnk=yf-261104-6mp9633w&.tsrc=rss).

The market contraction followed warnings from Yorkville analyst Dan Ives that political shifts threaten the pace of domestic data center construction. The headwind directly affects both SpaceX and Tesla, whose boards have established special committees to explore a potential merger. Responding to the mounting regulatory friction, SpaceX Chief Executive Elon Musk remarked on X that "data centers in space looking pretty appealing right now."

The political resistance was most visible in Texas, a state Ives estimates will account for 25% to 30% of total American data center capacity. Democrat Gina Hinojosa won the Texas governorship after campaigning on a moratorium against new data center construction, defeating incumbent Governor Greg Abbott. Opposition also spread across local ballots: Aleph co-founder Michael Eisenberg noted that roughly 41 municipal measures on data center development appeared across 10 states on Tuesday, with all but one failing by margins between 70% and 80% across both Democratic and Republican districts.

The wave of voter pushback directly confronts the assumptions underpinning aggressive private and institutional valuations. A bullish model published by Sequoia partner Shaun Maguire projected SpaceX's terrestrial compute to grow from 1 gigawatt in early 2026 to 21 gigawatts by late 2028, generating an estimated $731 billion in revenue. Financial research account Uncovered Alpha calculated that ground compute accounts for $569 billion, or about 78%, of Maguire's 2028 forecast. Crucially, Maguire's scenario allowed for only a 20% regulatory slowdown relative to the prior two years.

Wall Street consensus tracked by TIKR is more conservative, forecasting $336 billion in SpaceX revenue for 2028. Even that target requires rapid, sustained site additions, leaving the company vulnerable after trading at roughly 45 times forward earnings entering the election.

SpaceX has already committed vast resources to terrestrial infrastructure. The company's capital expenditures rose from $7.0 billion in the third quarter of 2025 to $19.6 billion in the third quarter of 2026. Its dedicated data center unit, Super Intelligence, consumed $40.0 billion of the $48.1 billion deployed across the first nine months of 2026, with executive guidance projecting another $35 billion to $40 billion in capital spending for the fourth quarter alone.

On the operational side, SpaceX maintains running clusters that could see pricing gains if rival construction stalls. The company had approximately 2.2 gigawatts of capacity active at the end of October, and Musk indicated its flagship Colossus 2 facility in Memphis will house roughly 1.2 million Nvidia Blackwell chips by year-end. SpaceX leases compute at spot-market rates, meaning constrained supply across the industry could bolster returns on existing assets, but current capacity remains far below the multi-gigawatt footprint needed to satisfy 2028 revenue projections.

Orbital compute offers no immediate financial replacement. Musk estimated that monthly orbital compute deployment will not surpass ground additions until around the end of 2028, while Maguire does not project space-based compute to become the company's primary revenue driver until 2030 or 2031.

Any near-term freeze remains subject to legislative negotiations. In Texas, Hinojosa must pass a formal moratorium through a state senate expected to retain a Republican majority. SpaceX's fourth-quarter financial report in early 2027 will offer the next concrete measure of its ongoing site approvals and deployment trajectory.