Howmet Aerospace (HWM) experienced one of the most punishing weeks a high-performing stock can endure, despite the turbulence being largely disconnected from the company’s underlying operational strength.
Shares plunged sharply following an unexpected announcement from Elon Musk, only to begin a steady recovery once analysts had the opportunity to dissect the details carefully.
By the time Jim Cramer addressed the situation on his program, the narrative had already transitioned from widespread panic to potential buying opportunity.
On Wednesday, Sept. 2, during the Lightning Round segment of CNBC’s “Mad Money,” Cramer recommended that viewers either hold or accumulate shares of Howmet, describing it as the most accessible avenue into the aerospace sector given the complexity of competing investments.
For market participants, this type of endorsement prompts a critical question: Does the decline represent a genuine value opportunity, or a cautionary signal?
Unpacking the Catalyst Behind the Howmet Decline
The disruption originated with a post on X (formerly Twitter) authored by Elon Musk.
Musk revealed that SpaceX (SPCX) intends to manufacture its own turbine blades and vanes internally—the sophisticated metal components designed to withstand the extreme temperatures within a gas turbine’s combustion section.
The strategic objective is to accelerate power generation capabilities supporting artificial intelligence data centers, linked to an ambitious 20-gigawatt initiative planned for Bastrop, Texas.
This announcement alarmed investors for a specific reason: Howmet belongs to a select group of global manufacturers capable of producing these precision components, meaning any suggestion of new competition triggers immediate market anxiety.
The market interpreted Musk’s initiative as a transformation of a customer into a competitor, sending Howmet shares down as much as 7.7% on Monday, Aug. 31, ultimately closing lower by more than 8%, according to CNBC reporting.
The stock had been hovering near $265 prior to the announcement, and it dropped precipitously as soon as trading commenced.
The Analyst Consensus on SpaceX’s Limited Impact
Two prominent Wall Street institutions responded within hours, and their rationale merits careful consideration before any investment decision.
The production of these blades requires decades of accumulated proprietary expertise that cannot be acquired rapidly by a new market entrant.
Bernstein analyst Douglas Harned maintained his Outperform rating while elevating his price target to $328 from $248, expressing his view that Howmet faces minimal risk from SpaceX’s strategic pivot, as noted by GuruFocus.
His central argument centers on market scarcity. Howmet commands more than 50% of the global market for these castings and has secured customer agreements extending into 2030.
Citi analyst John Godyn concurred, preserving his Buy rating and $329 price target while instituting a 30-day catalyst watch on the equity.
Godyn characterized the decline as an exceptional and probably temporary window for acquiring shares.
The consensus from both firms is straightforward. When a well-capitalized buyer chooses to develop internal supply chains, it underscores how constrained production capacity has become, rather than indicating that Howmet is ceding its competitive advantage.
The AI Power Expansion as a Tailwind for Howmet
An important dimension often missed during periods of market panic is that artificial intelligence actually serves as a catalyst for this company’s growth rather than an obstacle.
Data centers require substantial electrical capacity, and a significant portion of that energy will continue to derive from natural gas turbines for the foreseeable future.
Each of these turbines depends on the blades and vanes that Howmet manufactures.
This demand is already evident in the financial results. Howmet’s gas-turbine revenue surged 39% in the first quarter, following a 25% increase throughout 2025, according to a company press release.
Given the constrained supply environment, Howmet retains significant pricing leverage, enabling it to implement price increases without sacrificing order volume.
The company is simultaneously pursuing expansion, with six additional projects anticipated to increase blade production capacity by up to 38% compared to early 2025 baselines.
Competitors including GE Vernova and Siemens Energy are similarly investing in expanded casting capacity, which further validates that the supply shortage represents an industry-wide phenomenon.
Cramer’s Confidence in Howmet’s Aerospace Foundation
Cramer’s conviction extends beyond the turbine segment alone.
Howmet also manufactures components for jet engines, and this division maintains consistent activity even when its principal customers encounter difficulties.
Aircraft manufacturers such as Boeing (BA) have confronted production challenges for years, yet Howmet continues to benefit from sustained demand for replacement components and defense modernization initiatives.
Commercial airlines require a reliable supply of spare parts to maintain their operational fleets, creating recurring revenue for Howmet independent of new aircraft delivery schedules.
This represents the thesis Cramer consistently emphasizes. Howmet generates returns regardless of whether its customers are in expansion phases or simply maintaining existing assets.
This combination of engine components and turbine blades provides the company with two distinct revenue catalysts, a relatively uncommon characteristic in a single equity.
Essential Considerations Before Purchasing the Howmet Dip
Cramer has hosted “Mad Money” for more than two decades and previously managed a hedge fund, lending substantial credibility to his aerospace assessments among retail investors.
Nevertheless, his recommendation does not eliminate the inherent risks, several of which warrant careful attention.
Howmet currently trades at a premium valuation, with a price-to-earnings ratio approaching 55, indicating that the market has already priced in substantial future growth.
When equities maintain such elevated multiples, any negative development can precipitate dramatic price movements, precisely as the SpaceX announcement demonstrated.
The following figures provide essential context for evaluation.
Key Metrics for Howmet Aerospace
-
Current share price: Approximately $256, partially recovered from the weekly low but still beneath Wall Street target prices
-
Average analyst price targets: $340, suggesting meaningful double-digit appreciation potential from current levels
-
Price-to-earnings ratio: Approximately 55, a premium multiple that reflects elevated growth expectations
-
Consensus rating: Maintains a Strong Buy consensus, with 12 of 14 analysts issuing Buy recommendations
For investors seeking exposure while concerned about volatility, implementing dollar-cost averaging can mitigate the impact of short-term price fluctuations.
This methodology involves purchasing a predetermined dollar amount at regular intervals rather than committing capital all at once.
Final Assessment for Prospective Howmet Investors
The market’s initial response to the SpaceX development was characterized by fear, and that apprehension produced the valuation decline that Cramer and two major financial institutions are now encouraging investors to examine.
The manufacturer of these critical components retains its market leadership, maintains contractual commitments through 2030, and continues to benefit from an AI-driven power infrastructure expansion showing no indications of deceleration.
The primary consideration remains valuation.
Howmet commands a premium price, and premium-priced equities experience rapid declines when sentiment shifts.
For long-term investors convinced by the aerospace and AI power narrative, the recent decline presents a more attractive entry point than has been available in recent months.
For those uncomfortable with significant price volatility, a measured approach involving smaller, periodic purchases represents a more prudent strategy than attempting to time a market recovery.
Ultimately, the factors behind the stock’s decline bore minimal connection to the company’s actual operational performance, and this disconnect represents the central insight Cramer is highlighting for his audience.