SpaceX poised for trillion dollar flotation as space sector surges in value

Speculation has mounted in recent weeks that SpaceX, under the leadership of Elon Musk, may soon proceed with a major stock market listing. Executives are reportedly assessing investment banks to coordinate a potential initial public offering, with a valuation possibly reaching 1.5 trillion dollars. This stands in stark contrast to its previous valuation of 350 billion dollars just a year prior. The company is expected to generate 25 billion dollars in revenue next year, with analyst forecasts suggesting an increase to 48 billion dollars in revenue and 10 billion dollars in net earnings by 2030. SpaceX’s Starlink unit continues to expand its customer base, providing broadband packages competitively priced in the market, which may render even these ambitious forecasts somewhat conservative.

Such a dynamic shift in valuation can be attributed to SpaceX’s transformative impact on the sector. Firstly, its development of reusable rockets has fundamentally altered the economics of space launch, moving the industry beyond its traditional reliance on state contracts. Access to space has effectively been democratised, allowing commercial clients to enter the arena once dominated by government agencies.

This innovation in launch technology has sharply reduced costs, driving a surge in launch frequency and unlocking opportunities across the burgeoning space economy. Lower launch costs have broadened the field for applications such as Earth monitoring, global broadband services and advanced manufacturing. The sector’s rapid development is reflected in recent data from the Space Foundation, recording the global space economy at 613 billion dollars, with substantial growth over the last two decades.

Defence applications have become an increasingly prominent aspect of the space technology landscape, as demonstrated during the war in Ukraine. While a handful of listed space technology businesses have struggled with profitability, others have attracted significant investor interest. For example, the British fund manager Baillie Gifford has made substantial commitments to SpaceX, investing heavily through Scottish Mortgage, Schiehallion fund and Edinburgh Worldwide Investment Trust, collectively holding major stakes.

Not all public space technology companies have experienced the same excitement. Inmarsat, once a fixture on the UK market, encountered significant challenges before being acquired by private equity. Similarly, European launch provider Avio and American satellite firm Planet Labs illustrate how strong demand does not always translate to profitability. Although Planet Labs commands a market value of 5.7 billion dollars and operates more than 450 satellites, its annual revenues remain comparatively modest, underscoring the risks involved for investors pursuing exposure to this new frontier.

Nevertheless, appetite for the sector is growing. Publicly listed equities in the space sector have rallied by 135 percent since the valuation trough in July 2024, with private markets receiving more than 70 billion dollars in inflows since 2024. The VanEck Space Innovators ETF, trading in London under the ticker JEDI, has appreciated by 63 percent to the end of November, featuring companies such as AST SpaceMobile, Globalstar, Viasat and Rocket Lab among its top holdings.

UK-based firms such as Filtronic and Cohort have also become prominent players. Filtronic, which provides high-frequency radio frequency solutions and maintains significant commercial ties with SpaceX, was recently awarded a 47 million pound order and has secured further defence contracts. Cohort, specialising in naval defence, has pushed deeper into space technology via EM Solutions. An alternative route for investors is the Seraphim Space Investment Trust, a UK venture capital trust trading at a discount to portfolio value and holding companies such as ICEYE and Hawkeye 360, both of which have registered increases in valuation and secured major contracts in recent months. Many of these firms are increasingly focused on defence applications, and the fund has demonstrated a strong track record despite persistently low share prices.