Don't Wait for the SpaceX IPO: Buy These 2 Hypergrowth Space Stocks Instead

SpaceX is rumored to IPO at a $1.5T–$1.75T valuation (implying roughly a 100x P/S at the reported price), but the firm’s recent merger with xAI complicates pure-space exposure. Rocket Lab (RKLB) has seen revenue surge to $602M in 2025 from $62.2M in 2021, trades at ~61x P/S, has a market cap under $40B, is scaling from the Electron to a larger Neutron launch planned for commercial debut in 2026, and is building its own satellite constellation. Planet Labs (PL) reported revenue up 33% YoY last quarter to $81M, free cash flow positivity, a backlog up 216% to $734M, trades at ~26.5x P/S with a market cap under $10B — both smaller peers present more upside than a mega-cap SpaceX IPO but carry material execution and valuation risk.

Analysis

The IPO noise around the large incumbent is creating a liquidity and narrative vacuum that mid‑cap space and imagery names can fill — but that shift is not purely positive for all independents. Scaling from niche small‑sat/launch operations to repeatable heavy‑lift or global DaaS (data‑as‑a‑service) economics requires three simultaneous things: hardened manufacturing yield, multi‑year contracted revenue, and lower per‑GB ingestion/processing costs. Firms that can lock multi‑year defense and commercial contracts while outsourcing capital‑intensive hardware will see margin expansion; those that double down on capex to vertically integrate face concentrated execution risk.

The calendar of catalysts is clustered and binary: hardware test flights and repeat successful launches in the next 6–18 months, backlog conversion into signed multi‑year service contracts over 12–36 months, and regulatory/insurance outcomes tied to national security customers. Tail risks include failed flight tests (weeks–months of revenue interruption), a post‑IPO risk‑off in public space stocks that re-prices growth multiples, and AI/data commoditization reducing per‑image pricing power. Insurance and launch cadence are underpriced variables — a single high‑profile failure can reset implied probabilities across public comparables.

Secondary beneficiaries are non‑obvious: GPU/accelerator vendors will see lumpy but structurally higher demand as imagery providers push heavier on on‑ground AI processing, while capital markets participants (exchanges, custody banks, underwriters) capture concentrated fee flow if a mega‑IPO proceeds through traditional channels. That creates a two‑tier trade: exposure to recurring, contract‑backed data revenue versus exposure to hardware/launch optionality. The right structures isolate those exposures and limit single‑event downside.

Key Decisions for Investors

• Buy PL (Planet Labs) equity or a 12–24 month call spread (e.g., buy 12–24 month ATM calls, sell 12–24 month OTM calls) — thesis: backlog conversion and defense/commercial contracts deliver outsized revenue visibility. Position size: 2–4% AUM. Risk/reward: target +100% upside in 12–24 months; downside capped to −40% (use calls or size to limit drawdown).
• Pair trade: Long PL / Short RKLB (equal dollar) for 12–18 months to isolate ‘data moat’ vs ‘hardware development’ risk. Use options for the short leg (buy 9–12 month RKLB put spread) to cap funding volatility. Risk/reward: asymmetric — aim for 1.5–2x return on capital if launch/dev execution stalls while data contracts convert; downside if macro risk‑off compresses both.
• Buy selective NVDA exposure (long 6–12 month calls or modest share position) as a levered play on escalating AI inferencing demand from higher‑resolution orbital imagery. Position size: 1–2% AUM. Risk: semiconductor cyclicality and valuation multiple compression; reward: 20–60% in a positive demand surprise scenario.
• Tactical trade on exchange/fees: small long NDAQ for 3–6 months ahead of IPO windows (or buy 6–12 month call options) to capture incremental listing/clearing/market‑making revenue. Position size: 0.5–1% AUM. Risk/reward: conservative — expect low‑double‑digit upside if a large listing routes through established exchanges; downside limited to single‑digit drawdown if listing structure changes.
• Hedge: buy a 9–12 month RKLB put spread (limit premium) sized to offset 25–50% of gross exposure to mid‑cap launchers. This protects against test failures and capex shock while keeping upside from successful commercialization intact.