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 that SpaceX trades at a premium despite $41.3 billion in cumulative losses and a Q1 2026 net loss of $4.28 billion, with Morningstar valuing it at $63 per share, about 59% below current trading levels. It instead highlights four aerospace/defense beneficiaries with stronger fundamentals: GE Aerospace posted $17.3 billion in orders (+93%) and $8.9 billion in revenue (+29%), Howmet grew revenue 19% to $2.31 billion, and Axon revenue rose 34% to $807 million. Overall, the piece is a valuation-driven relative-value call favoring profitable aerospace and defense names over a speculative space-growth story.

Analysis

The market is rewarding the cash-flow certainty embedded in the aviation supply chain while discounting anything that still requires a step-change in future profitability. That creates a notable dispersion trade: the “picks-and-shovels” names with backlog, aftermarket exposure, and sole-source content should continue to compound even if airline OEM production stays choppy, because maintenance cycles are less cyclical than deliveries and tend to extend margin durability through downturns.

Second-order effects favor the suppliers with pricing power over the airframers themselves. If narrowbody and widebody build rates keep rising, the bottleneck shifts toward certified parts, engine hot-section materials, and maintenance capacity rather than final assembly, which should support mix expansion for the highest-value content providers. That also means any incremental production delays at Boeing or Airbus are not necessarily fatal to the thesis; they can actually widen the moat of the better-positioned component vendors as airlines keep aging fleets in service longer.

The contrarian risk is that the current enthusiasm around aerospace “supercycle” names becomes crowded and valuation-sensitive before the operating cycle peaks. In that setup, the best short-term hedge is not betting against the theme outright, but against the least monetized version of it: companies whose upside still depends on unproven scale, future regulation, or capital intensity. If the market rotates away from duration risk, the first names to de-rate will be the ones whose earnings are most back-half loaded, while the firms already printing cash retain relative support.

Key Decisions for Investors

• Long GE / short BA for the next 3-6 months: express the view that certified engine and aftermarket content will monetize the aviation cycle faster than final-assembly exposure; target a relative outperformance trade if build-rate volatility rises.
• Add to TDG and HWM on any 5-8% pullback over the next 1-2 months: use weakness to build positions in the most pricing-powerful names with the cleanest conversion of backlog into free cash flow.
• Buy AXON on a 6-12 month horizon, but finance part of the premium with covered calls: the structural defense-software angle remains attractive, though valuation leaves less room for error if growth normalizes.
• Avoid initiating fresh short exposure to SpaceX-style duration stories unless there is a clear catalyst for financing stress or margin compression: the better short is still valuation versus execution, not the sector itself.
• Pair long HWM / short a basket of lower-quality industrial cyclicals over 2-4 quarters: if aerospace production stays firm, HWM’s hot-section content should outperform generic industrial beta with lower earnings risk.