Space stocks jump as SpaceX IPO buzz sparks sector-wide rally

Shares of space and aerospace companies rallied on Wednesday after a Reuters report said SpaceX confidentially filed for a US initial public offering, fueling optimism that the sector could be entering a new phase of growth.

The IPO, which could value the company at more than US$1.7 trillion (approx. $3 trillion), has drawn significant attention from investors, with expectations that it could become the largest stock market listing on record.

The development has also sparked enthusiasm for space-related equities, which have already seen strong gains in recent years.

SpaceX IPO buzz lifts sector sentiment

The announcement triggered broad gains across listed space companies.

Shares of Rocket Lab rose 6.9%, while Planet Labs surged 11.55%. Intuitive Machines climbed 12.17%, and Howmet Aerospace added 4.1%.

The rally extended to exchange-traded funds tracking the sector.

Products such as ARK Space & Defense Innovation ETF and Procure Space ETF gained 3% and 4.8%, respectively, continuing a strong upward trend that has seen both funds more than double in value since 2023.

"It isn't unusual for the entire sector to rally because some investors will interpret the announcement of the IPO as very positive for that type of industry, and the timing is also coincidental with the launch this evening of the US space escapade," said Peter Andersen, founder of Andersen Capital Management in a Reuters report.

Growth drivers and Musk’s expanding ecosystem

SpaceX’s rapid growth has been underpinned by its reusable rocket technology and its Starlink satellite internet network, which have helped drive both revenue and profitability.

The company is estimated to have generated around US$8 billion (approx. $14 billion) in profit.

The IPO filing comes after SpaceX merged with xAI, Elon Musk’s artificial intelligence venture, in a deal that valued the rocket company at US$1 trillion (approx. $1.8 trillion) and the AI business at US$250 billion (approx. $437.5 billion).

The combination has intensified investor interest in the broader “Muskonomy,” referring to the interconnected ecosystem of Musk-led ventures.

"So far, investors seem to be clamouring for any sort of exposure to SpaceX," said Angelo Bochanis, data and index associate at Renaissance Capital.

A public listing could also draw significant participation from retail investors, with reports suggesting that Musk is considering allocating as much as 30% of shares to individual investors.

At the same time, some analysts have flagged potential concerns around Musk’s ability to oversee multiple large-scale enterprises simultaneously, given his leadership roles across companies, including Tesla and other ventures.

"It is understandable that investors would be concerned with Musk overseeing multiple significant enterprises, especially given his polarizing public profile at times. However, SpaceX appears somewhat differentiated," said Kat Liu, vice president at IPOX.

"The business is operationally mature, technologically ahead in several key areas, and profitable, which provides a solid fundamental underpinning."

Broader space economy gains traction

The IPO comes at a time when the global space economy is gaining momentum, supported by falling launch costs, expanding satellite networks, and increasing demand for orbital infrastructure.

SpaceX’s ambitions extend beyond traditional launch services.

The company has reportedly sought permission to deploy up to 1 million solar-powered satellites designed to function as orbital data centres.

The timing also coincides with renewed activity in space exploration.

NASA is preparing to launch four astronauts on a 10-day mission around the moon.