After big Democratic wins in the midterm congressional elections, some on Wall Street think Elon Musk is facing political retribution risks, but that he will likely be able to stay protected. This could present a buy-the-dip opportunity for investors in Musk-run SpaceX . SpaceX shares were up 6% in early trading Friday but fell nearly 13% on Wednesday and Thursday in the wake of the Nov. 3 election. SPCX 5D mountain SPCX shares over the past five days Deutsche Bank suggested the risks could be more a matter of “perception” than reality due to the fact that Musk has a near-monopoly in the rocket launch business and that his companies deal mostly with the executive branch, which remains under Republican control. “With Elon Musk having provided significant financial support to the Republicans, we think there is a perception of potential political retribution. While there are ways for Congress to interfere, nearly all dealings are conducted with executive branch agencies,” Edison Yu at Deutsche Bank said in a Friday note. Yu reiterated a buy rating on SpaceX stock in his note, alongside a $250 price target. The traditionally deep-red state of Texas flipped blue in Tuesday’s election at the gubernatorial level, with big implications for the data center buildout and the wider AI trade as a result. Almost a third of planned data center capacity is set to be located in Texas, according to a Nov. 2 note from Wells Fargo. But Musk is shielded from expected data center obstructions in Texas as well, since most of SpaceX’s computing power is outside the state, according to Yu. “We think the vast majority of SpaceX’s compute will be outside Texas in 2027E (8-10 GW) so this doesn’t impact our estimates in the near term,” he wrote. Longtime SpaceX-backer Ron Baron, founder and CEO of Baron Capital, defended Musk on CNBC’s ” Squawk Box ” on Friday, noting the pressure that Musk is facing from Democrats. “A lot of [Democrats] who were elected have spoken negatively about Musk,” Baron said.
