SpaceX made waves this week by hinting it might enter the power equipment business to help solve supply chain bottlenecks that are slowing down AI computing.
Shares of several power equipment companies reacted to the news, but most analysts think established suppliers face little immediate risk. Competing in this field takes a lot of time and technical know-how.
SpaceX shares fell only slightly on Wednesday, moving with the overall market. The bigger swings were in turbine blade makers, as investors tried to decide if Elon Musk’s comments were good or bad news for the sector. SpaceX seems interested in this area because of a supply shortage, which usually means strong demand and higher prices, not too much supply.
By Wednesday, shares of casting companies like Howmet Aerospace and DPC had dropped for the week, along with utility-scale turbine makers GE Vernova and Siemens Energy. Companies with power generation divisions, such as Caterpillar and Cummins, also saw small declines.
Even though investors reacted negatively, some Wall Street firms disagreed with the selloff. Citi saw Howmet as a possible buying opportunity, saying the drop was too much. Deutsche Bank also picked Howmet as its favorite aerospace supplier and was positive on the stock. Still, Howmet shares stayed down for the day.
Jefferies estimated that it could take at least four years to significantly expand casting technology, since turbine blades are some of the most complex parts made in the U.S. 22V Research also said that building single-crystal casting abilities takes time, and current manufacturers have strong advantages. They believe the market may be overreacting to SpaceX’s plans in the short term.
These manufacturers have an edge because they use special single-crystal casting methods. Their blades have no internal crystal boundaries, unlike regular cast metals. They also have advanced ceramic production and go through years of testing for critical parts. The way the crystals are structured affects how the material performs, and having fewer boundaries helps blades handle very high temperatures, which is hard to copy.
22V Research thinks SpaceX is more likely to start making turbine blade and vane replacement parts for its own use, instead of taking on the whole casting industry or competing directly with big manufacturers like GE Vernova, Siemens Energy, and FTAI Aviation. They also pointed out that SpaceX bought APR Energy, which quickly sets up power equipment using turbines from suppliers like GE Vernova.
In the end, Musk’s comments about power and casting point to a bigger issue: there might not be enough electricity to keep up with AI growth. By 2030, AI data centers could need up to 1,300 terawatt-hours of electricity, which is about 30% more than the current U.S. total. Musk seems to be warning about this problem early, and if he’s right, the extra demand could create big opportunities for power equipment suppliers.
