Here’s Why SpaceX Stock is Falling After Midterm Elections

SpaceX stock is falling today, November 4, as investors react to the US midterm elections and the possible implications. SPCX dropped to $134, its lowest level since August 24, and was 23% below its October high. So, will the stock continue falling or bounce back in the near term?

SpaceX Stock is Falling After the Democrats Sweep

SPCX stock plunged as investors reacted to the outcome of the midterm elections. Democrats won by a large margin and will take control of both the Senate and the House of Representatives. They will hold a 54-seat Senate majority, which could grow to 55 if Dan Sullivan loses in Alaska. In the House, they will control the chamber by more than 50 seats.

SpaceX, which is controlled by Elon Musk is falling because he was the biggest donor to the Republicans, spending over $500 million. As a result, there is a likelihood that Democrats will launch major investigations into the company.

A possible issue is the company’s recent decisions to interfere with Starlink’s operations in Ukraine. Some Democrats have called for investigations into that.

At the same time, they will likely start investigations into government contracts issued to SpaceX. In Texas, the incoming governor may also work to undo some of the tax incentives that drew the company to the state.

SpaceX stock is also falling because of its role in the data center industry, which many Democrats have begun to criticize. This is important because the company has become one of the biggest players in the data center industry. It recently raised $40 billion in debt to fund its data center rollout.

Most importantly, Democrats will likely react to the company’s potential SpaceX and Tesla merger. If the two companies announce the merger, there is a likelihood that Democrats will investigate the deal.

SpaceX’s Business is Growing

On the positive side, SpaceX’s business is doing well, with its revenue continuing to grow. Its last earnings report showed that its revenue surged by over 160% in the third quarter to $14.6 billion.

Most of the revenue came from its artificial intelligence (AI) business, which jumped to $7.56 billion from $813 million in the same period last year. This growth is happening as companies like Anthropic and Google signed large deals with it.

Its connectivity business also continued to grow, reaching $5.2 billion from over $3.09 billion a year earlier.

Most importantly, the company’s net income rose to over $2.7 billion in the third quarter from $273 million in the same period last year.

Also, analysts expect its revenue to continue growing in the foreseeable future. The annual revenue is expected to grow to over $48 billion this year from $14.6 billion last year. They also expect the figure to jump to $180 billion next year, with Goldman Sachs analysts forecasting it to reach $474 billion in 2030.

SpaceX Stock Technical Analysis

The four-hour chart shows that the SPCX stock has been in a downward trend in the past few days. It has slumped from the post-earnings high of $176.5 to $134 today.

The stock has slumped below the 50-period moving average and the Supertrend indicator. It is also hovering around the 61.8% Fibonacci Retracement level. Therefore, a drop below that retracement level will point to more downside, possibly towards the support of $130. On the flip side, a move above the resistance level of $150 will invalidate the bearish outlook.