Is the tightening of AI regulations an “unexpected joy”? Deutsche Bank Raises SpaceX (SPCX.US) 2028 Performance Forecast: May Benefit from Scarce Computing Power

The Zhitong Finance App learned that Deutsche Bank said that as political opposition to artificial intelligence (AI) data centers grows, Elon Musk's SpaceX (SPCX.US)) is expected to benefit from it.

After the Democratic Party won a big victory in the midterm elections, the market feared that the Democratic Party will tighten its regulatory policy on artificial intelligence (AI) after gaining an advantage in Congress and several states. Stricter AI regulations and restrictions on data center construction at the local level may slow down the investment process in the US AI infrastructure.

Deutsche Bank anticipates that after the US midterm elections, political pressure may slow down data center construction. This impact will mainly be felt in 2028, causing computing power supply to continue to be tight and computing power rental prices to remain high for a longer period of time.

Deutsche Bank maintains a “buy” rating for SpaceX, with a target price of $250. The bank's analyst Edison Yu raised SpaceX's 2028 earnings before interest, tax, depreciation and amortization (EBITDA) forecast by US$18 billion to US$237.1 billion; at the same time, the revenue forecast was raised by US$18.7 billion to US$315.3 billion.

This adjustment also reflects a further increase in the company's contribution to the cloud business. SpaceX is currently leasing computing power to Alphabet (GOOGL.US) and Anthropic. Deutsche Bank expects the cloud business to account for more than half of SpaceX's fourth-quarter revenue.

Why are fewer data centers likely to generate more revenue?

AI developers need massive computing power. When construction of new facilities is delayed, there will be fewer places where customers can rent computing power, which will give operators that already have existing computing power capacity stronger pricing capabilities. Musk also acknowledged the stakes on Monday. He wrote on social networking platform X: “If computing power becomes sufficient and cheap, SpaceX's revenue will drop.”

Deutsche Bank believes that SpaceX may take advantage of the shortage of computing power, notify customers 90 days in advance to terminate existing computing power contracts, and then require customers to pay a higher price when signing a new contract. The bank believes this is likely to happen, but has not included it in profit forecasts.

Venture capitalist Chamath Palihapitiya raised similar views on the “All-In” podcast. He said that if the shortage of computing power continues, then Anthropic may have no choice but to accept a higher price.

Tighter regulations may also hinder SpaceX's expansion plans

However, political pressure may also limit SpaceX's expansion plans. SpaceX is advancing the construction of a $24 billion gas power generation project and computing power facility in Texas. However, Texas's elected governor Gina Hinojosa promised that approval of new projects will be suspended until state lawmakers enact relevant safeguards to protect electricity costs, water supply, and local communities.

Deutsche Bank believes that SpaceX is still expected to add about 1 gigawatt of computing power capacity in Texas, and specifically mentioned the company's 6 gigawatt construction plan in Arizona. However, construction costs corresponding to each gigawatt of computing power capacity may rise. “It is extremely difficult to increase the supply of computing power on a large scale,” Musk said on Friday. He believes that construction workers are scattered across too many projects, leaving labor resources stretched.

Meanwhile, traders on the prediction market Polymarket believe that the probability that Texas will implement a statewide data center construction moratorium by the end of 2027 is about 22%, the probability of implementing it by the end of 2028 is about 34%, and the relevant contract transaction amount is about 828,000 US dollars. These contractual requirements require the relevant restrictions to be formally established by law or constitutional provisions. This means that even if the government suspends issuing construction permits, it may still slow down the construction of the project, and it will not necessarily trigger payment of the relevant contracts.