Reportedly, SpaceX is looking to raise $50bn through the IPO, giving the Elon Musk-helmed company a $1.5trn valuation.
Hype around a potential record IPO for SpaceX later this year could spill over into other areas of the ‘New Industrial Stack’, representing a “structural turning point” for the entire space economy.
With a potential June IPO date to coincide with a rare planetary alignment, Space X is reportedly looking to raise $50bn through the offering, giving the Elon Musk-helmed company a $1.5trn valuation, the biggest in history.
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ARK Invest Europe global head of investment products Rahul Bhushan said that, if public markets ultimately value SpaceX in the multi-trillion-dollar range over time – "as our long-term models suggest is possible" – it would signal that investors view space infrastructure as core, scalable platforms rather than niche or experimental ventures.
SpaceX would become "the anchor public company for the category" at the point it launches its IPO, re-rating adjacent space names, tightening or loosening late-stage pricing and making other space IPOs easier to underwrite, said PitchBook senior emerging tech analyst Ali Javaheri, as investors will finally have a true bellwether.
"The other big impact is on the talent/liquidity flywheel," he continued. "Large liquidity events mint a cohort of engineers and operators who go on to found and fund hard-tech companies. We have already seen a preview of that SpaceX alumni effect with startups like Varda, Hadrian and Castelion."
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The potential event is also putting a spotlight on the immediate commercial implications of space exploration, including launch and connectivity, as well as opening the imagination to the downstream applications that may eventually be enabled, such as orbital data centres, said Neuberger Berman portfolio manager Evelyn Chow.
Seraphim Space investment trust CEO Mark Boggett was among those outlining the major ramifications for the future of data centres, AI and energy demand, with SpaceX's regent merger with fellow Musk company xAI only whetting appetites further.
He explained the trust deliberately steers clear of the launch segment to avoid direct competition with SpaceX, instead aiming to provide exposure to data technologies that serve existing terrestrial markets in its quest to discover "the next SpaceX".
Although initial excitement for the strategy deteriorated after its July 2021 IPO – the share price having fallen by nearly 75% two years later, according to AJ Bell head of markets Dan Coatsworth – the trust's fortunes seem to have turned.
In a recent stock exchange notice, it revealed that each of its top four holdings – ICEYE, ALL.SPACE, D-Orbit and HawkEye 360 – had seen an increase in valuation, which resulted in a combined fair value uplift of £69m, equivalent to a 24% increase in the company's net asset value.
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For Neuberger's Chow, however, defence and deterrence are the main areas of interest, as space is "an area garnering a lot of new investment from traditional primes, new defence tech upstarts and even governments".
She cited US government contracts with defence primes like LMT, RTX and LHX to ramp up production of cruise missiles, air-to-air missiles and solid rocket motors, where capacity remains very constrained.
However, "this is not just a US phenomenon", Chow highlighted, as production has accelerated at names like Avio, an Italy-based leader in space and defence propulsion, while support for defence spending in Japan and across the European continent is increasing.
"This creates a lot of opportunity to consider international defence names and space pure plays, including UK-based BAE, Singaporean defence prime ST Engineering, Japanese leader Mitsubishi Heavy and others," she added.
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Although AJ Bell's Coatsworth warned that trying to do business in space is incredibly expensive and success is not guaranteed, he conceded that "the tide is turning" and investors are now finding a range of space-related opportunities that are making them money.
"An investor would have approximately doubled their money in VanEck's Space Innovators ETF over the past 12 months," he explained, while shares in Filtronic have increased by 700% since February 2024 thanks to a series of contract wins to supply the likes of SpaceX and Airbus with equipment to support their satellite needs.
"If SpaceX does manage to pull off a blockbuster IPO later this year, one can only presume that interest in space investments will soar," Coatsworth added. "There is always an element of FOMO, and if some people miss out on SpaceX's IPO gains, if there are any, they may scout around to see what else is on offer."
