Is SpaceX Worth $1.77 Trillion When It Can't Turn a Profit? These 4 Stocks Suggest There's a Better Way to Play Aerospace.

The article argues SpaceX trades at an excessive premium despite $41.3 billion in cumulative losses, including a $4.28 billion net loss in Q1 2026, versus Morningstar's $63 fair value estimate. It favors GE Aerospace, TransDigm, Howmet Aerospace, and Axon Enterprise, highlighting strong operating momentum such as GE's $17.3 billion in orders, Howmet's 19% revenue growth to $2.31 billion, and Axon's 34% revenue growth to $807 million. Overall the piece is a valuation-driven comparison that is constructive on profitable aerospace and defense names rather than SpaceX.

Analysis

The market is implicitly paying up for narrative optionality while underpricing the cash-flow durability of the boring winners. The real second-order effect is not that SpaceX is expensive; it is that capital is being reallocated toward a narrower set of proven aerospace compounders with visible backlog conversion, which can keep valuation multiples elevated longer than fundamentals alone would justify. In practice, that tends to favor businesses with aftermarket exposure and sole-source content because they monetize each aircraft cycle multiple times, while pure-new-tech names remain hostage to long-dated execution risk.

GE Aerospace, TransDigm, and Howmet are all levered to the same multi-year fleet reset, but they monetize different parts of the cycle, which makes the group more resilient than the headline “aviation boom” trade suggests. GE benefits most from engine shipments and service attachment; TDG is the highest-quality toll booth on installed base maintenance; HWM is the cleanest operating-margin lever as OEM build rates rise. The underappreciated risk is that these names have become consensus long industrials, so any moderation in order growth or a temporary production hiccup could compress multiples before the underlying cycle actually turns.

Axon is the more interesting crossover play because defense modernization is increasingly software-defined, not hardware-defined. That means revenue quality can improve faster than investors expect if counter-drone, surveillance, and evidence-management products become embedded in procurement workflows, but it also makes the stock vulnerable to multiple compression if growth decelerates from the current pace. Boeing is not the thesis here, but it remains the key lagging indicator: if OEM bottlenecks persist, it extends the runway for suppliers; if production normalizes faster than expected, supplier growth may decelerate just as valuation peaks.

The contrarian miss is that this is less a “sell the future, buy the present” call than a “buy the future where it already has a revenue model” call. The article frames SpaceX as purely speculative, but the broader market may already be paying that premium across aerospace suppliers through crowding; the better trade is to own the strongest cash generators and fade any outright chase into high-multiple defense and industrial names on strength.

Key Decisions for Investors

• Long GE / short a basket of overextended industrials for 3-6 months: GE has the cleanest backlog-to-earnings conversion in the group, while broader cyclicals are more exposed to earnings-multiple compression if rates stay higher for longer.
• Add TDG on any 5-8% pullback over the next 1-2 months; the risk/reward remains favorable because installed-base pricing power should keep FCF compounding even if new aircraft deliveries wobble.
• Use HWM as the preferred pure-play supplier long into the next 2 quarters; pair against a weaker aerospace supplier with lower aftermarket content to isolate the margin expansion from OEM build-rate recovery.
• Initiate a tactical long AXON ahead of defense procurement updates, with a 6-12 month horizon; upside comes from software mix and budget stickiness, while downside is mainly multiple compression if growth slows below 25-30%.
• Avoid chasing SpaceX-style narrative exposure here; if forced into the theme, prefer a long GE/TDG/HWM basket over single-name speculative aerospace exposure to reduce execution risk and capture the monetization layer already in place.