Bianca Botes, Managing Director at Citadel Global

SpaceX filed its Initial Public Offering (IPO) paperwork last week at a $1.77 trillion valuation. The company plans to sell 555 million shares at $135 each when it lists on the Nasdaq on 12 June, raising $75 billion in the process – making it, if it lands at that price, the largest public offering in history. Saudi Aramco’s 2019 listing, which set the previous record, raised $25.6 billion. SpaceX would be raising three times that amount in a single transaction. Whatever one thinks of the valuation, the sheer scale forces the question of what the commercial space sector really is as an investment category and whether the current market enthusiasm is pricing the future correctly or just pricing in its zeal.

The SpaceX that is listing is not simply a rocket company. The February 2026 merger with xAI absorbed Elon Musk’s artificial intelligence (AI) operation into the parent entity, pushing the valuation from roughly $1.25 trillion to where it sits today. Starlink, the satellite internet service, is the financial engine – with an estimated seven to eight million subscribers and revenue projected to reach between $22 billion and $24 billion in 2026. The xAI unit, by contrast, burned $7.72 billion in the first three months of 2026 and generated an operating loss of $2.47 billion in the same period. At a $2 trillion market capitalisation, SpaceX trades at approximately 104 times trailing sales. For context, satellite peers, AST SpaceMobile and Rocket Lab, trade at 260 times and 91 times projected 2026 revenues, respectively. While the anchor of the sector is expensive, the companies orbiting around it are even more so.

Those companies have had a remarkable run. Rocket Lab, which started as a small launch provider and has since expanded into spacecraft manufacturing, defence contracts and space systems, hit an all-time high earlier this month after reporting its 2026 first quarter earnings. The stock has appreciated more than 400% over the past 12 months. AST SpaceMobile – which is building a satellite-to-smartphone network with infrastructure partnerships already in place with AT&T, Verizon and T-Mobile – climbed 17% on renewed enthusiasm for direct-to-device connectivity. Redwire, which focuses on space infrastructure components and in-space manufacturing with contracts across the National Aeronautics and Space Administration (NASA) and United States (US) defence agencies, surged more than 22% on sector tailwinds, despite releasing no meaningful company-specific news.

Then came Monday. Redwire fell nearly 15% after global investment banking and capital markets group, Jefferies Financial Group, downgraded the stock to “Hold” following a 163% gain in 30 days. Its peers also saw a knock, Rocket Lab dropped more than 13%, AST SpaceMobile shed 9%, Firefly Aerospace declined around 12%. The Procure Space exchange-traded fund (ETF), which tracks the listed universe, entered the session more than 20% above its 50-day moving average. The pullback was not a surprise to anyone running a valuation model. The sector has run well ahead of any near-term earnings justification and the SpaceX IPO, rather than being a further catalyst, has introduced a different kind of risk: the classic “sell the news” dynamic (where an asset’s price rises ahead of a highly anticipated event but drops or stagnates once the news is released) becomes the event that triggers the profit-taking.

This is the tension at the core of the space investment thesis right now. The long-run numbers are credible. The global space economy is projected to exceed $1 trillion by 2040, driven by satellite communications, earth observation, defence applications and eventually in-orbit manufacturing. Government demand for satellite imagery and data has grown consistently and commercial appetite for space-based connectivity is real and expanding. Goldman Sachs has projected that US IPO proceeds could hit a record $160 billion in 2026, with SpaceX at the centre of that pipeline.

While the structural case for the sector is solid, the short-run numbers are harder to defend. Rocket Lab trading at 91 times sales – up from below 20 times a year ago – reflects how much of the expected decade has already been priced in over the past 12 months. AST SpaceMobile at 260 times projected 2026 revenue is carrying the full weight of a network that is not yet built on a timeline that has already slipped. Redwire has delivered real revenue growth of $335 million in 2025, with 2026 guidance of $450 million to $500 million, but even there, a 163% move in 30 days was not a revenue story; it was a momentum story.

For investors, the reality is that this is a sector where the long-term direction is probably right and the entry point matters enormously. SpaceX as a business is different from the companies trading in its gravitational pull, most of which are pre-profit, capital-intensive and exposed to execution risk that does not yet appear in their multiples. The SpaceX IPO will be a genuine inflection point for the sector’s visibility and legitimacy in public markets. But inflection points and good entry prices are not the same thing and the gap between them is currently uncomfortably wide.

ENDS