AI’s Power Crisis Has Found an Unexpected Bottleneck in Turbine Blades
AI data centers need more electricity before they can sell more computing power. That makes gas turbines newly important, because they can add dependable power where grids lag.
The trigger this week was Elon Musk pointing straight at turbine blade and vane castings as the constraint in the power equipment chain.
Castings become the choke point
Howmet Aerospace sits in a narrow industrial niche that suddenly matters to AI infrastructure. The company makes blades and vanes that operate inside the hottest part of industrial gas turbines.
Those parts are hard to produce at scale because they need extreme heat resistance and precise casting quality. Musk said casting blades and vanes is the most significant limiting factor for power until solar AI satellites scale.
SpaceX told The Information it plans to make its own blades and vanes for gas turbines used to power data centers. Howmet shares fell 7.5% Monday after investors treated that plan as a possible threat to a scarce supplier.
Musk later described the broader issue as a crisis of power. That phrasing matters because it frames turbine parts as infrastructure bottlenecks, not ordinary aerospace components.
Wall Street sees scarcity
Citi analyst John Godyn moved quickly after the selloff. He placed a 30-day upside catalyst watch on Howmet and kept a Buy rating.
"We see this as a unique and likely short-lived opportunity in shares."
John Godyn, Citi
Godyn argued the SpaceX news reinforces the critical nature of Howmet parts. He also said it shows exceptional demand above Howmet’s roughly $2B gas turbine revenue target.
Bernstein analyst Douglas Harned reached a similar conclusion. He said Howmet holds more than 50% of the industrial gas turbine blade castings market and has long-term agreements with every major producer.
Bernstein kept an Outperform rating on the stock with a $328 price target. Citi kept a $329 target, which implied 34% upside from Monday’s close, according to CNBC.
SpaceX may not become a rival
The core debate is whether SpaceX becomes a supplier or simply builds for itself. Bernstein expects the effort to focus on vertical integration rather than selling forgings and castings across the industry.
That distinction matters because a captive foundry could reduce SpaceX demand without resetting market pricing. It would be more disruptive if SpaceX became a broad merchant supplier.
Harned said he is skeptical SpaceX can reach volume production in time for its 18-month power goals. He added that the challenge is why Howmet has maintained its lead position, according to Investing.com.
Deutsche Bank also downplayed the immediate risk. The bank said the threat is far less threatening than it looks at first glance.
Jefferies analyst Sheila Kahyaoglu put the aerospace and industrial gas turbine engine products market at $10B in 2025 sales. She said channel checks point to roughly four years before SpaceX products arrive, according to Stocktwits.
Howmet already has momentum
Howmet’s own results support the scarcity argument. The company reported second-quarter 2026 revenue of $2.55B, up 24% from a year earlier.
Gas turbines were one of the strongest end markets. Howmet said gas turbine revenue grew 38% in the second quarter of 2026.
Engine Products, the segment most tied to turbine and aerospace engine demand, posted $1.37B in second-quarter revenue. Segment adjusted EBITDA margin reached 37.7%.
Chief Executive John Plant said demand in gas turbines is extraordinary. He also said customers are already revisiting and adding to demand outlooks.
Howmet raised full-year 2026 revenue guidance to a baseline of $10.05B. The company also raised baseline adjusted EBITDA guidance to $3.23B, according to its second-quarter release.
How to read the trade
This sector setup is bigger than one stock. AI data center growth is pulling capital toward power generation, which shifts attention to obscure suppliers with real capacity limits.
Howmet is the public-market pure play in this specific casting bottleneck. Berkshire Hathaway’s Precision Castparts, Consolidated Precision Products, and Doncasters also compete in the field.
Those companies do not offer the same direct listed exposure. Barron’s reported Howmet trades around 53 times estimated 2027 earnings, which leaves little room for disappointment.
The opportunity is that scarcity can last longer than expected when qualification cycles are slow. Investors should treat the group as a capacity-constrained infrastructure trade, not a simple SpaceX headline trade.
