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Recent reports suggest that SpaceX could go public in 2026, and Elon Musk has hinted that this is likely.
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Musk’s space company could go public at a colossal $1.5 trillion valuation.
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Rumors of the historic offering have boosted enthusiasm for space stocks in the last week.
Talk of a colossal 2026 IPO from SpaceX is already having an impact on the market.
Investors have been asking for years if Elon Musk will ever allow SpaceX to start trading on public markets, and reports indicate next year could see its long-awaited debut at a $1.5 trillion valuation.
In a post on X on Wednesday, Musk appeared to confirm talk of a SpaceX public offering, describing a reporter’s explanation of an imminent IPO as “accurate.”
The fresh focus on the space industry has sparked fresh momentum for stocks in the sector. Since the SpaceX IPO chatter picked up in the last week, a handful of space companies have seen their shares soar.
Here are the top-performing space stocks in the last five days:
“SpaceX’s IPO acts as a ‘sector validator,’ proving privates can command valuations despite thin profits, encouraging investors to focus on less well known public space stocks, like Redwire and Firefly Aero, for early exposure to a projected $1 trillion space economy by 2040,” Tony Bancroft, a portfolio manager at Gabelli Funds told Business Insider.
Pure hype may not be the only reason that these space stocks are surging, though. According to Shay Boloor, chief market strategist at Futurum Equities, the prospect of SpaceX going public at a trillion dollar valuation is likely shifting the ways in which investors view smaller companies.
“When the anchor of the entire ecosystem is valued that highly, then companies like Rocket Lab and AST SpaceMobile suddenly screen as structurally undervalued because they participate in the same demand cycle SpaceX is proving out,” he noted.
Boloor added that SpaceX’s lofty valuation means that investors will have to start looking at the industry not as a high-risk emerging market, but as critical infrastructure that will be crucial to the US’s future in multiple areas.
The consensus among finance pros seems to be that the space investing landscape has already started shifting, making small-cap space stocks an appealing play.
“If anything, the biggest impact of a SpaceX IPO is psychological,” stated Drew Wandzilak, a principal at Alumni Ventures. “It tells the market that this ecosystem is entering its growth phase. That is encouraging for investors like us and even more encouraging for the founders who are building the next layer of the space economy.”
Read the original article on Business Insider
