Key Takeaways
- SpaceX shares fell 2% today, along with Tesla, after Democrats swept the midterms and Texas elected a governor who campaigned on halting new data center construction.
- Sequoia partner Shaun Maguire’s bullish SpaceX model gets most of its 2028 revenue from data centers on the ground and allows for only about a 20% political slowdown, and voters just went after that assumption.
- SpaceX spent $19.6 billion on capex in the third quarter, and most of what it spent this year went to its data center segment.
- If rivals can’t build, the compute SpaceX already runs may be worth more. But orbital compute won’t fill the gap by 2028, so the 2028 estimates are the ones to watch.
Democrats swept the midterms on Tuesday, and SpaceX (SPCX) shareholders are feeling it today.
The stock fell 2% this morning and Tesla (TSLA) dropped 3% after Yorkville’s Dan Ives, one of Wall Street’s biggest AI bulls, warned that the blue wave will slow the AI data center build-out. Ives put SpaceX and Musk “front and center in this spiderweb.” Tesla is caught in it too, since special committees at both companies are weighing a merger.
Elon Musk’s response? “Data centers in space looking pretty appealing right now.”
It’s a funny line, and a well-timed one. The SpaceX bull case leans hardest on exactly the kind of building voters just turned against.
Voters said no in red and blue towns alike
Texas was the race to watch. Ives says around 25% to 30% of US data center capacity will come from the state. Democrat Gina Hinojosa beat Governor Greg Abbott there after promising a moratorium on new data center construction.
And it wasn’t just Texas. Aleph co-founder Michael Eisenberg pointed out on X that about 41 local ballot measures on data centers went up across 10 states on Tuesday. Of those with results so far, all but one went against data centers, “usually 70 to 80% against, in red and blue towns alike.”
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The bull case only left room for a 20% slowdown
Sequoia partner Shaun Maguire’s model has ground compute growing from 1 GW in early 2026 to 21 GW by the end of 2028, with 2028 revenue of about $731 billion. The X account Uncovered Alpha worked out that terrestrial compute makes up $569 billion of that, or about 78%.
Someone on X asked Maguire how he thinks about the range of outcomes. He listed his core assumptions, including that “politicians let SpaceX continue to operate with only about a 20% slow down compared to the last two year’s regulatory environment.”
Voters put real pressure on that assumption on Tuesday.
Wall Street is far less bullish than Maguire, but analysts still expect revenue to climb steeply through 2028:
The $336 billion consensus for 2028 is less than half of Maguire’s figure, but it still needs SpaceX to keep adding compute fast. I wouldn’t expect one election night to move those estimates much while no new law has passed. But the 2028 number depends most on new sites, and at about 45x forward earnings as of Monday, the stock is priced for those estimates to hold.
The money is already going into the ground
SpaceX’s capital spending rose from $7.0 billion in the third quarter of 2025 to $19.6 billion in the third quarter of 2026:
Its data center segment, Super Intelligence, took $40.0 billion of the $48.1 billion SpaceX spent in the first nine months of 2026. Management expects $35 billion to $40 billion of capex in the fourth quarter alone.
SpaceX already has its sites
On the plus side, SpaceX’s biggest cluster, Colossus 2, is in Memphis, and Musk says it’ll have “around 1.2M Blackwells” by year-end. Another of Maguire’s assumptions is that “other compute suppliers struggle to hit their timelines, while SpaceX delivers.”
So voters may have given Maguire his second assumption at the same time they went after his third. If nobody can build new sites, compute that’s already running gets scarcer. SpaceX rents its compute at “effectively the spot market rate,” as management put it on the third-quarter call.
But existing capacity only goes so far. SpaceX had about 2.2 GW running at the end of October, and Maguire’s model needs 21 GW by the end of 2028, nearly 10 times as much. That means winning a lot of new sites in towns that are voting them down.
Space won’t fill that gap in time either. Musk expects the orbital compute SpaceX deploys each month to pass terrestrial “around the end of 2028.” Maguire himself doesn’t expect orbital compute to be the dominant revenue line until 2030 or 2031.
Appealing, just not by 2028
Musk has a point: the politics of data centers changed in a big way on Tuesday. But through 2028, SpaceX’s AI revenue still has to come from the ground.
The way I see it, Tuesday made the compute SpaceX already runs more valuable and made the 21 GW bull case a lot less likely. Before paying up for the 2028 estimates, I’d want to see new sites still getting approved.
Of course, Hinojosa still has to get a moratorium through the legislature, and the Texas Senate looks set to stay Republican. SpaceX’s fourth-quarter results in early 2027 will show how much new capacity it’s still bringing online.
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