The starting gun for SpaceX's IPO hasn't fired yet, but is the "space sector" smart money already jumping the gun?

The “Five Little Dragons” that have generally recorded double-digit gains may be an important entry point for understanding this round of revaluation in commercial spaceflight.

Article by: Frank, Mai Tong MSX

This year’s most watched unicorn IPO in the U.S. stock market seems just one step away.

Sources reveal that SpaceX plans to secretly file its IPO prospectus as early as this week or next, aiming to go public in June. The commercial space and space-related sectors responded accordingly. Just before this market rally, MSX selected five U.S. space-related tokens on March 23: MNTS.M, SIDU.M, PL.M, BKSY.M, and YSS.M. All saw double-digit increases, with some stocks surging nearly 30% intraday, providing investors with a relatively ample window for entry.

Notably, SpaceX’s funding scale may exceed $75 billion. If finalized, this would not only significantly surpass the previously rumored target of around $50 billion but also far exceed Saudi Aramco’s 2019 fundraising record of $29.4 billion, making it the largest IPO in history—without question.

This raises the core question of this article: beyond the emotional catalyst of SpaceX rumors, what deeper logic underpins this rally in the commercial space sector? And does this revaluation have the foundation to further spread?

1. SpaceX IPO: The Starting Gun for the Commercial Space Sector?

Although SpaceX has never gone public, its influence on the secondary market has never been absent.

Understanding this requires first grasping SpaceX’s position within the entire commercial space ecosystem. It is no longer just a rocket company but a fundamental infrastructure provider supporting the entire commercial space industry chain. It is the strongest “valuation anchor” in global commercial space—covering launch services, Starlink communications, orbital transportation, and crewed flights. Every technological breakthrough by SpaceX reduces costs and improves efficiency for downstream small and medium-sized aerospace companies.

Therefore, the recent strength of space stocks is naturally driven by the potential IPO of SpaceX. The $75 billion funding target and a potential $1.75 trillion valuation act as a strong boost for the entire commercial space sector.

As a result, we see not just individual companies rising but a broader warming of the space concept, creating noticeable sector resonance.

The most obvious example is the five new commercial space “little dragons” on MSX: MNTS.M, SIDU.M, PL.M, BKSY.M, and YSS.M. Each has solid fundamentals, representing a concentrated coverage of key areas in the commercial space industry chain:

• MNTS.M (Momentus): Focused on last-mile orbital transfer services in low Earth orbit. Its Vigoride spacecraft plans to perform its next mission with SpaceX’s Falcon 9. This isn’t just a launch; it’s a commercial validation. As global satellite constellations accelerate, orbital transfer demand is shifting from optional to essential.

• SIDU.M (Sidus Space): Acts as a “gateway” into defense systems, with contracts from the U.S. Missile Defense Agency (MDA). It has ongoing bidding rights within the defense procurement system. For early-stage space companies, government contract qualification is a direct trigger for valuation reconfiguration and a stable revenue anchor beyond commercial orders.

• PL.M (Planet Labs): The most solid fundamental remote sensing leader in this rally, with the highest market cap among the five selected MSX tokens. It has a global satellite constellation, daily revisit capability, and a commercial data subscription model with real-world applications.

• BKSY.M (BlackSky): Transitioning from “satellite company” to “intelligence service provider,” with core strength in high-frequency revisits and AI analysis. Its third-generation satellite constellation offers commercial 35 cm resolution imagery. Coupled with geopolitical intelligence needs, it shifts from data selling to decision support, with a premium far higher than simple remote sensing data providers.

• YSS.M (York Space Systems): A core supplier for the U.S. Army’s proliferated battlefield space awareness (PWSA) project, backed by military contracts providing predictable cash flow. As a recent IPO target, its institutional holding cycle isn’t complete, and its share structure is relatively clean, offering high upward potential.

In essence, the five selected MSX targets aim to cover core directions in the commercial space industry chain: orbital transportation and mission execution, satellite and defense orders, Earth observation and remote sensing data, and high-elasticity satellite platforms. This portfolio isn’t just betting on a single event but strategically positioning around the “revaluation of commercial space” theme, which is a key reason for MSX’s early broad rally.

2. From “Science Fiction” to “Hard Currency” Revaluation

Of course, if you simply interpret this rally as “news-driven,” you underestimate its broader context.

Reviewing the logic behind this stock-picking surge, MSX didn’t gamble blindly on sentiment but captured two core signals:

First, at last week’s NVIDIA GTC conference, Jensen Huang announced a strategic layout in the space industry—from dedicated space-grade computing chips to digital twins for orbital environments—indicating AI is no longer just surface-level productivity but becoming the underlying architecture for satellite autonomous navigation and real-time data processing in low Earth orbit.

Second, on March 23, SpaceX, Tesla, and xAI jointly announced the launch of the “TERAFAB” project, aiming to produce one terawatt of AI computing chips annually for space deployment, using AI and highly automated manufacturing. This effectively paints a huge scaled-up growth story for the secondary market.

Based on these insights, MSX’s research team decisively added the “Five Little Dragons” to their coverage on March 23.

Historically, the commercial space sector has been viewed as a “money-burning” game: rockets, satellites, lunar missions, deep space, Starlink—all glamorous words. But in the capital markets, many companies face high R&D costs, long project cycles, slow profit realization, and cash flow pressures.

But this time, things are changing.

Starting in 2025, commercial space isn’t just about “launching rockets” anymore. It is gradually breaking down into a clearer, more understandable industrial chain for capital markets. Beyond launch services, more tangible and sustainable business models are emerging:

Satellite manufacturing, in-orbit services, Earth observation, defense remote sensing, low Earth orbit communication networks, AI-enabled image analysis, and intelligence distribution. This means the value of commercial space isn’t just a distant future vision but increasingly based on verifiable orders, service capabilities, and customer needs.

Further, three deeper logical trends are unfolding simultaneously behind this revaluation:

First, the significant reduction in launch costs is transforming the industry’s economic foundation. Reusable rocket technology is continuously lowering the cost per launch; this, in turn, reduces barriers for satellite constellations, in-orbit services, and data commercialization.

For many small and medium-sized space companies, this means previously experimental projects now have the potential to scale and reach break-even. SpaceX is the biggest driver of this cost curve, which explains why its IPO expectations have such a strong spillover effect on the sector.

Second, commercial space is beginning to intersect with larger macro themes. The strongest current market narratives—AI, defense, communications, new energy—overlap with space infrastructure. AI needs continuous high-quality data and edge perception; defense increasingly relies on real-time reconnaissance, space communication, and distributed satellite networks; geopolitical tensions globally elevate the strategic importance of space capabilities.

When a sector embeds multiple mainstream narratives, it ceases to be an isolated niche and instead becomes a recurring theme for capital allocation.

Third, the market is starting to accept differentiated valuation within the space sector. Previously, space stocks were seen as emotional, hype-driven assets that rose and fell together. Now, as the industry matures, investors recognize that different companies have different value propositions—some sell satellite platforms, some sell imagery data, some have defense order qualifications, some focus on in-orbit services, and others offer high-growth potential in IPO stages.

This indicates the commercial space sector is transitioning from a theme-based linkage to a “layered industry chain valuation.” Once in this stage, it often signifies that the sector is no longer just a short-term concept but has a foundation for long-term research and sustained trading.

3. What Does This Space Stock Rally Mean for Investors?

On the surface, this rally was fueled by heightened expectations for SpaceX, but deeper down, what truly drives the market to re-engage is the shift of the entire commercial space industry from a distant narrative to a layered, “priceable” industry.

This reflects a fundamental change in the underlying logic that the capital market is willing to price.

However, after the hype, how far the rally can go ultimately depends on fundamental validation. MSX Research Institute believes that after short-term sentiment catalysts, the depth and sustainability of this rally will be determined by several key variables:

• The substantive progress of SpaceX’s IPO process: Filing the prospectus is just the first step. Roadshows, pricing, and listing will continue to generate sector buzz and capital inflows.

• The pace of U.S. defense and space budgets: Budget increases for new fiscal year projects are confirmed, but the specific allocation of contracts will be revealed over the next two quarters. This is a major source of stock differentiation—companies with secured contracts will perform differently from those driven solely by sentiment.

• Companies’ cash reserves and financing capacity: Many early-stage space companies are still unprofitable. The rally often coincides with window periods for financing. A key signal to watch is whether management chooses to raise capital at high levels rather than cash out—this is the most direct and least fake indicator of insider confidence.

Of course, regardless of short-term developments, one thing is increasingly clear: SpaceX’s IPO will not be the end of this industry story. The more likely scenario is that it marks the beginning of the commercial space industry truly entering mainstream capital view.

Over the past decade, most stories in this sector have remained at the PPT and conceptual level, with capital often pricing “imagination.” In the coming years, the market will increasingly evaluate these companies based on real revenue, tangible contracts, and verifiable profit milestones.

For investors, this is both an opportunity and a challenge.

Sector resonance windows are rare, but only a few companies can truly traverse cycles.