SpaceX shares rise 7% in Friday trading after earlier losses this week

Key Facts

SpaceX shares rose about 7% in trading on Friday, November 6, after losses earlier in the week, Reuters reported. The move came during the session and does not represent a closing price. The stock had closed at $123.62 on November 5, according to EL7 data. That close remained below the $135 public offering price announced by the company in June. Friday’s rise came amid a partial rebound in AI stocks, rather than as evidence that the stock had regained its offering price.

The rise followed a week-long selloff; SpaceX shares fell about 9% on November 5, Reuters reported. EL7 data showed the close falling from $141.31 on November 3 to $135.92 on November 4, then to $123.62 on November 5. Reuters linked the selloff to concerns that Democratic gains in the midterm elections could slow data center construction and increase scrutiny of Elon Musk’s companies. The agency reported that Musk’s companies were on track to lose more than $380 billion in combined market value during the week. These are estimates and coverage for the period from November 2 to 6, in relation to the market-value loss figure.

In Texas, Gina Hinojosa won the governorship, making opposition to data centers a prominent campaign issue alongside public education and lowering the cost of living, according to the Associated Press. Reuters said she called for an immediate pause on new projects until lawmakers strengthen protections for local communities, and for an end to tax breaks. Hinojosa also said she could block a project permit if it was not a good deal for state residents or if they had not had an opportunity to weigh in, according to AP. These positions put infrastructure projects at risk of tighter scrutiny, which coverage linked to investor concerns about the pace of expansion. Those concerns alone do not establish the cause of the stock’s movement in Friday’s session.

The company’s sensitivity to this debate is underscored by the fact that more than half of SpaceX’s third-quarter sales came from renting out computing capacity, according to Reuters. The agency reported that Goldman Sachs analysts estimated local or state-level decisions could temporarily halt data center projects, potentially affecting about 45% of planned U.S. capacity expansion. By contrast, a Motley Fool report said SpaceX is focused on launching data centers into orbit, which could limit the effect of restrictions on ground-based facilities, according to the evidence record. In the broader election landscape, 32 of 34 candidates who won races called by AP supported tighter regulation or restrictions, and 12 supported a ban or temporary pause. Restrictions were also approved in 44 of 45 local ballot measures with completed counts, according to a Redbud Consulting analysis cited by AP.

The potential implications extend beyond data centers to other technology projects linked to Musk in Texas. In October, he announced plans for the Terafab chipmaking complex as a joint venture between Tesla and SpaceX, at a cost that could reach $119 billion, according to Reuters. Analyst Dan Ives also said the election results make the regulatory path for a potential merger between the companies in 2027 more difficult, while Musk had said special committees at the two companies were studying a possible deal. Politically, Hinojosa said she would form a bipartisan administration and take office in January. Her agenda faces a divided legislature: Republicans lost the state House but retained control of the Senate, according to AP.

The agency also reported that the U.S. jobs report showed an increase that exceeded economists’ expectations, leading traders to see a greater chance of the Federal Reserve raising interest rates at its next meeting in December. Separately, Morgan Stanley said decisive Democratic victories had bolstered expectations for restrictions on data centers, with states potentially splitting into areas that allow projects and those that do not. Texas is expected to surpass Northern Virginia to become the world’s largest data center market by 2030, based on a JLL report, according to AP. These developments put the sector’s growth path and local regulatory decisions among the factors markets are watching.