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SpaceX filed its Initial Public Offering (IPO) paperwork this 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 raises questions regarding the nature of the commercial space sector as an investment category, and whether the current market enthusiasm is pricing the future correctly or just pricing in investor 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 NASA and 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 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) has become driver of profit-taking.
This is the tension at the core of the space investment thesis currently. 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.
MARKET MOVES
Bonds
US Treasury yields eased yesterday, with the 10-year yield falling four basis points to 4.46% as lower oil prices helped reverse most of the previous session’s rise. Markets still see a risk of another United States (US) Federal Reserve (Fed) hike this year, possibly as early as October, as energy prices keep inflation concerns elevated. At the same time, resilient labour data continues to support the US growth outlook ahead of today’s Non-Farm Payrolls report.
The German 10-year bund yield moved back toward 3% as lower oil prices slightly softened European Central Bank (ECB) rate-hike expectations. Even so, markets still price a near-certain 25-basis point ECB hike on 11 June, with further tightening possible after euro-area inflation rose to 3.2% in May.
United Kingdom (UK) 10-year gilt yields dipped below 4.9%, with investors balancing easing oil prices against persistent geopolitical risks. Markets continue to expect up to two Bank of England (BoE) hikes this year, with the first likely in September.Japan’s 10-year JGB yield fell to 2.68% after Bank of Japan (BoJ) Governor, Kazuo Ueda, highlighted rising inflation risks but stopped short of signalling a hike at the next meeting. BoJ Deputy Governor, Himino Ryozo, reiterated that the central bank remains open to further increases, with timing dependent on how the Middle East conflict affects Japan’s economy. At the same time, stronger-than-expected first quarter gross domestic product (GDP) data and April export growth of 14.8% continue to support the case for a near-term BoJ hike.
Equities
US equity futures edged lower this morning ahead of the May payrolls report, which may shape expectations for the Fed’s next move. Sentiment also remained cautious as the ceasefire between the US and Iran is holding, although broader talks appeared to be making little progress. In yesterday’s trading, the Dow rose 1.73% to a record high, the S&P 500 gained 0.41%, while the tech-heavy Nasdaq slipped 0.09%, weighed down by Broadcom and other AI-related shares.
The UK’s FTSE 100 closed broadly flat but slightly higher yesterday at 10,360, recovering early losses as easing Middle East tensions supported wider European markets. Even so, the UK index lagged the region, with weaker oil prices weighing on energy heavyweights Shell and BP. Multinational financials Prudential, Standard Chartered and HSBC also came under pressure after reports that some banks had paused Hong Kong account openings for mainland Chinese clients. Markets also scaled back expectations for further BoE tightening.
European equities closed firmly higher yesterday as lower oil prices eased inflation concerns and improved sentiment. The Euro STOXX 50 rose 0.8% and the STOXX Europe 600 gained 0.5%, supported by hopes that the US-Iran ceasefire would hold. Banks led the advance, with Santander, Deutsche Bank and UniCredit up between 1.5% and 3%, while aerospace corporation Airbus added 4.6%.
Commodities
Brent crude traded near $95/barrel this morning after falling almost 3% in the previous session, as hopes for a diplomatic solution between the US and Iran eased immediate supply concerns. US President Donald Trump is reportedly reluctant to escalate into full-scale conflict with Iran. Even so, Brent remains up more than 4% for the week, as negotiations between Washington and Tehran have made little meaningful progress and Israel’s operations in Lebanon continue to cloud the outlook. Hezbollah also rejected a US-backed ceasefire proposal, although Trump said the group had approached the White House to discuss ending hostilities.
Gold held above $4,450/ounce this morning, supported by continued hopes for a diplomatic resolution between the US and Iran. President Trump said peace talks were nearing a final stage and is reportedly reluctant to return to full-scale conflict, although Iran’s foreign minister said there has been no meaningful progress. Hezbollah’s rejection of a US-mediated ceasefire proposal between Israel and Lebanon also added to lingering uncertainty. Despite this support, gold remains on track for a weekly decline, as elevated oil prices and disruption risks in the Strait of Hormuz have kept inflation concerns and higher-rate expectations in focus.
Currencies
The US Dollar Index steadied around 99.4 this morning and remained on track for a weekly gain, supported by safe-haven demand amid ongoing Middle East uncertainty. Attention is also on the May employment report for further clues on labour market strength and the Fed’s next move, with recent US data still pointing to a resilient economy.</p>
The euro rose toward $1.164/€ ahead of next week’s ECB meeting, with markets pricing in a near-certain 25-basis point hike on 11 June and further tightening likely this year after euro-area inflation accelerated to 3.2% in May.</p>
Sterling firmed toward $1.35/£ as improving risk sentiment supported the currency. Markets still expect nearly two BoE rate hikes this year, with the first likely in September.</p>
*Please note that all information is at the time of writing.
Key indicators:
GBP/USD: 1.3424
GBP/EUR: 1.1555
GBP/ZAR: 21.92
BRENT CRUDE: $94.84
GOLD: $4,462.27
Written by Citadel Advisory Partner and Citadel Global Managing Director, Bianca Botes.
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