Space satellite-related companies are experiencing a surge in stock prices on the New York stock market. This uptick is driven by growing anticipation for the potentially largest initial public offering (IPO) in history, planned by Elon Musk’s private space venture, SpaceX.
With SpaceX targeting a June 12 listing, the entire space economy’s valuation may undergo a fundamental reassessment.
U.S. Spacecraft and Satellite Stocks Skyrocket: Up to 34% Surge in Three Trading Days
On Wednesday, key companies in space exploration and satellite infrastructure continued their upward momentum in the New York stock market.
AST SpaceMobile (ASTS), a low Earth orbit satellite communication service provider, has shown the most robust upward trajectory. AST SpaceMobile maintained a strong upward trend for three consecutive trading days, recording an impressive cumulative increase of 34.67% during this period, solidifying its position as the sector’s leading stock.
Rocket Lab (RKLB), a space launch vehicle manufacturer and small satellite service provider, and Planet Labs (PL), an Earth observation satellite data company, also reaped direct benefits from SpaceX’s momentum. Rocket Lab surged 19.75% over three trading days amid interest from major institutions, while Planet Labs rose 18.83% on expectations of increased satellite data demand.
Intuitive Machines (LUNR), a manufacturer of unmanned lunar landers that has captured significant attention from retail investors, experienced a rollercoaster ride before ultimately seeing success.
After plummeting nearly 9% on Tuesday due to short-term negative news related to the National Aeronautics and Space Administration (NASA) projects, it rebounded dramatically the next day with a 15.7% surge, fully recovering its losses. This allowed Intuitive Machines to successfully join the space-themed rally with a cumulative increase of 17.81% over three trading days.
Institutional Fund Inflows Opening Up: Renewed Focus on the Space Sector After Funding Drought
Asset management firms and exchange-traded fund (ETF) managers believe SpaceX’s IPO will be a turning point, fundamentally altering the liquidity landscape of the space sector.
Previously, large space stocks were often excluded from major institutional and general fund investments due to high volatility and small market capitalizations. However, with SpaceX’s potential listing at a valuation of up to 2 trillion USD, experts anticipate a trickle-down effect of substantial institutional capital into the broader space industry.
SpaceX is generating stable subscription revenue, with its satellite internet service Starlink surpassing 9.2 million subscribers, serving as a key growth driver. The company is increasingly viewed not just as an aerospace manufacturer, but as a high-profit global communications platform and infrastructure company.
Overheating Warnings: Could Be a Replay of the 2021 Electric Vehicle Bubble
However, there are significant voices cautioning against excessive enthusiasm in the space sector. Financial publication Barron’s pointed out that some space companies’ stock prices are trading at excessively high multiples compared to their expected revenues.
Barron’s warned that this situation is reminiscent of the 2020-2021 electric vehicle (EV) bubble, when companies like Rivian and Nikola soared after going public, only to plummet more than 80-90% from their peaks.
In fact, SpaceX’s proposed corporate valuation is estimated at 80-100 times its projected revenue from last year, surpassing even artificial intelligence (AI) leader Nvidia’s multiple of 24.
Al Root, Barron’s chief market analyst, stated that while SpaceX’s IPO will undoubtedly serve as an excellent catalyst to elevate the overall value of the space industry, he cautioned that speculative meme stock buying, unsupported by actual operational metrics or cash flow, could carry significant risks.
