Howmet Falls 8% on SpaceX Turbine Plans; Analysts Call Dip

Howmet Aerospace shares tumbled nearly 8% after SpaceX announced plans to manufacture its own turbine castings, prompting major Wall Street firms to view the selloff as a buying opportunity driven by persistent industry-wide supply constraints.

"We see little risk to Howmet from the SpaceX announcement; instead we see a positive message," said Douglas Harned, analyst at Bernstein, in a research note published Monday.

The market reaction followed news that SpaceX intends to produce turbine blades and vanes internally to support a massive 20-gigawatt power project in Bastrop, Texas, designed to supply electricity to artificial intelligence data centers. Despite the competitive threat from Elon Musk's aerospace company, Howmet maintains a dominant position in the sector, controlling more than 50% of the market share for industrial gas turbine blade castings alongside long-term customer agreements stretching through 2030.

Wall Street Responds With Higher Targets

Following the downward pressure on the stock, financial institutions moved quickly to reiterate their bullish stances and adjust valuation models. Citigroup reiterated its buy rating on Howmet, opened a 30-day catalyst watch on the equity, and reaffirmed a price target of $329.

"We see this as a unique and likely short-lived opportunity in shares," said John Godyn, analyst at Citigroup, in a report released late Monday.

Simultaneously, Bernstein reiterated its outperform rating on Howmet while significantly raising its price target to $328 from $248, signaling confidence in the company's underlying fundamentals despite the new manufacturing competition in Texas.

Capacity Expansions and Market Constraints

Howmet is actively scaling up its manufacturing footprint to meet unyielding demand across the aerospace and industrial gas turbine sectors. The company has already initiated output expansions, with six additional capacity projects scheduled to come online by the end of the fourth quarter.

Industry estimates indicate these facility upgrades could increase Howmet's turbine-blade manufacturing capacity by as much as 38% compared to output levels recorded in the first quarter of 2025. This capacity growth arrives as global supply chains continue to grapple with severe shortages for specialized high-temperature castings.

What Is at Stake for Industrial Turbine Suppliers

The clash between established casting giants and self-supplying technology developers underscores the immense energy demands of modern artificial intelligence infrastructure. As data center operators race to secure reliable power sources independent of constrained public utility grids, industrial gas turbines have emerged as critical bottleneck assets, making established suppliers with multi-year contract backlogs central to the energy transition.