Does the SpaceX IPO Mean You Should Ditch Rocket Lab?

The article argues that both SpaceX and Rocket Lab trade at elevated valuations, with SpaceX at a $2.1 trillion market cap and more than 100x 2025 revenue, while Rocket Lab trades around $60 billion and 89x sales. Rocket Lab has grown revenue to $680 million over the last 12 months, but the piece says its 32% pullback and the SpaceX IPO are mostly sentiment-driven and not enough to justify buying either stock. The author’s bottom line is to avoid both names and instead favor other picks.

Analysis

The immediate market reaction is less about fundamentals and more about an attention shock: the new listing creates a gravity well that can pressure every adjacent “space economy” equity regardless of whether their business models overlap. That said, the second-order winner is not the obvious launch competitor; it is likely the broader aerospace enabling stack tied to AI compute, satellite payloads, and government procurement, where incremental demand can be absorbed without needing flawless rocket execution. The listed names most exposed to this repricing are the ones whose valuation is still anchored to a very distant scale-up story rather than current cash generation.

The biggest overlooked risk is that launch cadence and payload economics are not linear. A delayed heavy-lift platform can suppress revenue expansion for multiple quarters, but a successful debut can also compress the market’s willingness to pay for “future optionality” across the entire subsector. In other words, the tape may be telling us that the market is ready to fund scale only if the path to scale is de-risked; until then, every delay widens the gap between narrative value and realizable value.

The contrarian view is that the selloff in the smaller space name may actually be an entry point for a relative-value trade, not an outright long. If the new public vehicle absorbs speculative flows, the smaller operator could underperform in the near term even if its operating trajectory remains intact, creating an attractive window to hedge sector beta and own idiosyncratic execution. Meanwhile, the AI linkage is the real hidden catalyst: any additional disclosures around compute contracts or data-center monetization would matter more than launch milestones because they can re-rate the addressable market from “space launch” to “infra platform.”

Key Decisions for Investors

• Short RKLB on strength for the next 2-6 weeks; risk/reward favors a retracement if the post-IPO attention trade persists, with a tight stop above the most recent breakout level.
• If holding RKLB, hedge with a long GOOGL call spread over 3-6 months; the article’s hidden signal is that AI infrastructure demand, not launch hardware, is the cleaner monetization path.
• Avoid initiating fresh long exposure to the space basket until after the first post-IPO volatility window; wait for a 15-20% compression in forward P/S multiples before considering entry.
• Pair trade: long GOOGL / short RKLB for 1-3 months; this isolates AI compute upside against speculative space-economy sentiment, with better fundamental support on the long leg.
• For tactical options traders, buy RKLB puts into any further sentiment-driven spike; implied volatility should remain elevated, making directional downside exposure more efficient than spot shorting.