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AI Could Drive Upside for This SpaceX ETF

BY | ETF Database
6:07 am ET 11/03/26 | 8 VIEWS
SpaceX (SPCX) recently reported a 161% jump in third-quarter revenue with Starlink revenue climbing nearly 70%. The real story, though, perhaps was a 5x surge in artificial intelligence (AI)-related sales. That’s a theme that will play over long time periods. However, it’s also one that could prove meaningful to tactical short-term traders considering geared ETFs, such as the Direxion Daily SpaceX Bull 2X ETF (LOFF). LOFF is one of the original leveraged single-stock ETFs focusing on SpaceX. It attempts to deliver 200% of the daily performance of the stock.That is to say, this ETF isn’t for the faint of heart or long-term buy-and-hold investors. But it may be useful to risk-tolerant traders around various SpaceX AI updates. “Notwithstanding its sizable market opportunity for rapid, profitable growth in Starlink, the widest range of potential outcomes for SpaceX’s future lie in its AI ventures, which are currently predicated on rapidly deploying computing capacity and renting it out,” noted Morningstar’s Nicolas Owens.SpaceX AI Execution MattersSpaceX established success with Starlink. Meanwhile, AI is widely viewed as a long-term growth driver for the rockets and satellites company. However, as Owens pointed out, SpaceX’s AI ventures have a wide range of “potential outcomes.” Those signal that the leveraged LOFF could be a feast-or-famine play. “SpaceX’s rapid buildout of AI computing capacity and ability to rent it out at favorable rates is a success story. However, we do not think it likely that demand will outstrip supply forever, especially the more capacity is deployed,” observed the Morningstar analyst. AI-related stocks are currently experiencing pullbacks, in some cases deep ones, amid ongoing spending concerns. So, investors considering SpaceX and traders eyeballing LOFF may want to take wait-and-see approaches. That said, traders with a stomach for volatility could use LOFF as an event-driven short-term trade. Those investors may see rewards in the future, provided SpaceX becomes an example of AI execution. “In our forecasts, we investigated a few possible long-term payoff profiles of heavy investments in AI infrastructure, mirroring questions and uncertainty investors have grappled with in recent months and weeks that drove volatility in AI-related shares,” concluded Owens. Traders who want to take the other side of the SpaceX trade may want to evaluate LOFF’s bearish counterpart, the Direxion Daily SpaceX Bear 2X ETF (LOFD). For more news, information, and analysis, visit the Leveraged & Inverse Content Hub.

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