SpaceX’s Quest for Warp Speed Rattles Smaller Firms in Its Wake
Before its initial public offering, the prospect of a megacap SpaceX drew capital from retail and institutional investors to both publicly listed rivals and adjacent firms. It was great for companies that Wall Street viewed as a proxy for SpaceX or that, at least, offered a vehicle for investment in the industry it dominates.
Post-debut, however, it has created something of an accordion effect for individual pure-play (or near-pure-play) space stocks. In the months leading up to the SpaceX IPO, many stocks rose as new investors sought a piece of the industry before SpaceX officially launched it into the stratosphere, much like what happens when the bellows of the wind instrument expand.
Navigating a Wormhole
But then the accordion gets squeezed: Since SpaceX debuted, money has rotated from these firms to the newly public industry leader.
For example, satellite manufacturer AST SpaceMobile, a smaller competitor to SpaceX’s Starlink satellite internet services, has climbed 34% over the past year but taken a 43% nosedive over the past month amid portfolio realignments triggered by the SpaceX IPO.
Observation satellite firm BlackSky, which provides high-quality satellite imagery for commercial, government and defense clients, is up 18% in the past year but down 50% in the past month.
Space exploration company Intuitive Machines: up 74% in the last year, down 43% in the last month.
Rocket Lab, the company that’s widely considered the most direct competitor to SpaceX, has fallen 42% in the last month but still boasts a 130% gain in the last 12 months. Like Musk’s firm, it designs, makes and launches both rockets and satellites.
What Comes Next
Where things go from here depends a lot on how you feel about SpaceX and the broader sector. The firm’s Wall Street debut has been tumultuous: Last week, it finished down 15%, and it has experienced single-day double-digit swings over its first two weeks, though its shares are still trading at $157 a pop, up 5% from their $135 listing price.
Looking at fundamentals, Musk’s company lost nearly $5 billion last year on $18.7 billion in revenue, the latter of which represented a notable 33% increase.
That’s not unusual among peers: BlackSky, Rocket Lab and AST SpaceMobile are still operating at a loss because they, too, are investing heavily to build capacity as they add lucrative government contracts and other future revenue sources. Of note, Planet Labs, which operates the largest commercial Earth-imaging satellite network, reported its first profitable year (on an adjusted basis) in the 12 months through January 2026.
Some believe the next few years will mean a blastoff, while others are a little more hesitant to make that call.
SpaceX bulls advocate looking to the future: Morgan Stanley bankers advised investors earlier this month that SpaceX could reach $3.4 trillion in revenue by 2040, according to a report in The Wall Street Journal. Yes, trillion. Goldman Sachs, another of the company’s IPO bankers, projected $470 billion by 2030.
To put those numbers in context, McKinsey estimates the entire space economy will be worth $1.5 trillion in 2035.
Bears have questions. Meeting the ambitious forecasts will require developing and scaling unproven technologies such as solar-powered orbital AI data centers and enabling rapid reusability of SpaceX’s Starship fleet. Then there are Musk’s purported plans to colonize the moon and Mars.
Morningstar analysts, who have proven among the most articulate skeptics, believe SpaceX stock is worth $62 and said that even maintaining its current, much higher price “implies all the company’s projects will pay off according to our most optimistic scenario, which depends on rapid Starship reusability and compelling commercialization of orbital data centers.”
Of course, if the bulls are proven right, the broader sector is likely to benefit, a prospect highlighted in surging interest from both Wall Street and Main Street.
“We are already seeing evidence of this trend through the emergence of dedicated SpaceTech ETFs and increasing investor engagement with specialist space-focused investment vehicles,” said Mark Boggett, CEO of Seraphim Space.
Before 2026, investors had just one option if they wanted to put money in a space-industry-dedicated exchange-traded fund. Today, they have over half a dozen choices.
Entering Orbit
In the short term, meanwhile, the decline in SpaceX shares this week isn’t necessarily a reflection of fundamentals, positively or negatively.
“There appear to be several factors at play, driving the pullback,” Eugenia Mykuliak, executive director of trading platform B2Prime, said in a statement. “First, the fact that SpaceX has announced plans for bond issuance has led to investors asking questions about the financing costs and how much funding the company will need going forward. They are naturally more cautious right now, which is putting pressure on the stock price in the short-term.”
She added that another factor is the “upcoming series of lock-up expirations and the expectations around them,” which “will cause a notable increase in the available supply and likely become one more weighing factor on the stock price. This doesn’t necessarily mean that the insiders will rush to sell, but the possibility alone is enough to create a certain amount of volatility.”
The stock is in an “initial adjustment stage, which will fade eventually,” Mykuliak said. “The market will go back to assessing fundamentals over temporary factors,” she added, and the execution of its long-term growth strategy will become a more important factor for markets down the line.
Because SpaceX joined the Russell 1000 index after market close on Friday and is likely to soon be listed on the Nasdaq-100, it’s possible other space stocks could face more downward pressure when index funds and other investors shift their portfolios accordingly.
In other words, the rollercoaster ride isn’t over yet. And conquering Mars? That’s a question for fortune-tellers as of now.
The post SpaceX’s Quest for Warp Speed Rattles Smaller Firms in Its Wake appeared first on The Daily Upside.
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