SpaceX Turbine Push Unlikely to Threaten Howmet, Bernstein Says

SpaceX’s plan to manufacture industrial gas turbine blades and vanes is unlikely to significantly threaten Howmet Aerospace, according to Bernstein analysts, who see recent weakness in Howmet shares as a potential buying opportunity.

Elon Musk said SpaceX plans to produce the specialized turbine components as the company targets 20 gigawatts of behind-the-meter power capacity by the end of 2027. The power would support terrestrial artificial intelligence data centers in Bastrop, Texas, highlighting growing electricity demand associated with AI infrastructure.

Howmet Aerospace holds more than 50% of the industrial gas turbine blade castings market, with particularly strong exposure to advanced, high-end turbines. Musk has previously pointed to the industry's reliance on a small group of suppliers as a major production bottleneck.

Bernstein analysts believe Howmet remains well positioned despite SpaceX’s move toward in-house manufacturing. The aerospace manufacturer has long-term agreements with every major industrial gas turbine producer, providing some protection against new competition.

Those contracts are believed to run through around 2030, aligning with Musk’s comments that turbine blade production capacity is effectively sold out through the end of the decade.

Howmet is also expanding manufacturing capacity to meet rising demand. Its first new capacity expansion became operational during the second quarter, while at least six additional expansion projects are planned. The company’s industrial gas turbine business recorded 38% growth during the quarter.

Rather than signaling weaker prospects for Howmet, SpaceX’s decision to manufacture turbine components could underscore how constrained global turbine supply has become as demand for electricity generation accelerates.

SpaceX could also face challenges scaling production quickly. Manufacturing turbine blades and vanes requires advanced engineering and specialized processes, potentially making it difficult for the company to achieve sufficient production volumes within the next 18 months.

Bernstein expects SpaceX’s manufacturing operation to primarily serve its own power requirements rather than compete broadly with established suppliers such as Howmet.

The firm maintains an Outperform rating on Howmet Aerospace stock with a $328 price target. That target represents roughly 24% upside from Howmet’s August 28 closing price of $264.85.