Howmet Aerospace (HWM) had one of the roughest weeks a market favorite can have, and it happened for reasons that had almost nothing to do with the company’s actual business.
The stock dropped hard after a surprise announcement from Elon Musk, then started climbing again once Wall Street had time to read the fine print.
By the time Jim Cramer got to it on his show, the argument had already shifted from panic to opportunity.
On Wednesday, Sept. 2, during the Lightning Round segment of CNBC’s “Mad Money,” Cramer told viewers to hold or add to Howmet, calling it the best way to play aerospace, since the other names are too difficult.
For investors, that kind of call raises a fair question: Is this a bargain, or a warning?
What triggered the Howmet Aerospace sell-off
The trouble started with a post on X (the former Twitter) from Elon Musk.
Musk said SpaceX (SPCX) plans to cast its own turbine blades and vanes in-house, the intricate metal parts that sit inside the hottest section of a gas turbine.
The goal is to speed up power generation for artificial intelligence data centers, tied to a planned 20-gigawatt project in Bastrop, Texas.
Here’s why that alarmed people: Howmet is one of only a handful of companies on the planet that can make these parts, so any hint of a new rival hits a nerve fast.
Investors treated Musk’s plan as a customer turning into a competitor, and Howmet shares fell as much as 7.7% on Monday, Aug. 31, before closing down more than 8%, according to CNBC.
The stock was trading near $265 before the news hit, and it immediately crashed to a much lower price as soon as the market opened.
Cheng Xin / Getty Images
Why Wall Street sees the SpaceX threat as small
Two major banks pushed back within hours, and their reasoning is worth understanding before you make any decision.
Casting these blades takes decades of specialized, proprietary knowledge that a new entrant cannot buy overnight.
Bernstein analyst Douglas Harned kept his Outperform rating and raised his price target to $328 from $248, writing that he sees little risk to Howmet from the SpaceX move, GuruFocus noted.
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His core point is about scarcity. Howmet holds more than 50% of the market for these castings and has customer agreements running into 2030.
Citi analyst John Godyn agreed, keeping a Buy rating and a $329 target while opening a 30-day catalyst watch on the stock.
Godyn called the drop a unique and likely short-lived opportunity in the shares.
The read from both firms is simple. A buyer with deep pockets building its own supply is a sign of how tight capacity has become, not proof that Howmet is losing its edge.
How the AI power boom actually helps Howmet
What people overlook during the panic is that artificial intelligence helps this company’s business rather than hurting it.
Data centers need enormous amounts of electricity, and much of that will come from natural gas turbines for years to come.
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Every one of those turbines needs the blades and vanes that Howmet makes.
That demand is already showing up in the numbers. Howmet’s gas-turbine revenue jumped 39% in the first quarter after a 25% gain across all of 2025, according to a press release.
Because supply is so tight, Howmet keeps strong pricing power, which means it can charge more without losing orders.
The company is also expanding, with six more projects expected to lift blade capacity by as much as 38% from early 2025 levels.
Rivals such as GE Vernova and Siemens Energy are racing to add casting capacity, too, which tells you the shortage is real across the whole industry.
Why Cramer trusts Howmet’s core aerospace business
Cramer’s confidence rests on more than the turbine business.
Howmet also supplies parts for jet engines, and that side of the business stays busy, even when its biggest customers struggle.
Aircraft makers including Boeing (BA) have wrestled with production delays for years, yet Howmet keeps benefiting from demand for replacement parts and defense upgrades.
Airlines need a steady supply of spare parts to keep their existing planes flying, and that recurring demand lands on Howmet, regardless of how new aircraft deliveries are going.
This is the point Cramer keeps coming back to. Howmet earns money, whether its customers are thriving or just maintaining what they already have.
That mix of engine parts and turbine blades gives the company two separate growth engines, which is rare in a single stock.
What to weigh before buying the Howmet dip
Cramer has spent more than two decades hosting “Mad Money” and ran a hedge fund before that, so his aerospace calls carry weight with many retail investors.
Still, his endorsement does not remove the risks, and there are a few you should know.
Howmet trades at a steep valuation, with a price-to-earnings ratio near 55, meaning the market already prices in strong future growth.
When a stock sits that high, any bad headline can trigger sharp swings, which is exactly what the SpaceX news showed.
Here are the key figures to keep in mind.
Howmet Aerospace by the numbers
- Recent share price: About $256, partially recovered from the week’s low but below Wall Street targets
- Average analyst price targets: $340, implying solid double-digit gains from current levels
- Price-to-earnings ratio: About 55, a rich multiple that reflects high growth expectations
- Consensus rating: Carries a Strong Buy consensus rating, with 12 of 14 analysts calling it a Buy
If you want exposure but worry about the volatility, spreading purchases over time through dollar-cost averaging can soften the effect of short-term swings.
That approach means buying a fixed dollar amount on a regular schedule instead of putting everything in at once.
The bottom line for Howmet investors
The market’s first reaction to the SpaceX news was fear, and that fear created the dip that Cramer and two major banks now want investors to consider.
The company that makes the parts still holds its lead, still has contracts locked in through 2030, and still benefits from an AI power buildout that shows no sign of slowing.
The main catch is price.
Howmet is expensive, and expensive stocks fall fast when the news turns.
For long-term investors who believe in the aerospace and AI power story, the recent drop offers a cheaper entry point than the stock has shown in months.
For anyone uneasy with big price swings, it is much smarter to buy small amounts over time rather than rushing to buy everything during a rebound.
Either way, the reason the stock fell had little to do with how the business is actually performing, and that gap is what Cramer is pointing his viewers toward.
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