Space stocks lose lift after S&P says nope

The catalyst everyone was banking on just got vaporized

Space stocks spent Friday getting punched in the gut after S&P Global said it wasn’t changing its index eligibility rules to make life easier for giant newcomers like SpaceX. Translation: no special treatment, no shortcut into the S&P 500, and no instant tidal wave of index-fund buying to goose the post-IPO trade.

That matters because investors had been quietly building a whole mini-thesis around SpaceX’s planned blockbuster offering. If the company could have vaulted into major benchmarks quickly, passive funds would’ve had to buy shares in size — basically the financial equivalent of showing up to a buffet with a bulldozer.

Why everyone else in the sector got dragged down

Even though SpaceX is still private, public space names have been trading like unofficial proxies for it. So when the catalyst got stripped away, traders didn’t just shrug and move on — they dumped the whole neighborhood.

That hit:

• AST SpaceMobile and Rocket Lab, which got hit as “public SpaceX-ish” exposure in traders’ minds
• Redwire, Sidus Space, and Intuitive Machines, which also got caught in the same mood swing
• Space-themed funds like ARKX and UFO, because ETFs are basically the ultimate guilty-by-association vehicles

The other shoe: valuation reality check

There’s also a second plot twist here: valuation. Morningstar analyst Nicolas Owens reportedly pegged SpaceX’s weighted base-case value around $780 billion, way below the roughly $1.75 trillion implied by the fixed IPO price of $135 per share. That’s a big gap, and it makes the whole “buy everything space-related before liftoff” trade look a lot less automatic.

Big picture

For investors, this is a reminder that hype can absolutely act like a jet pack — until it runs out of fuel. With the easy index-inclusion story now off the table, space stocks may have to stand on boring old fundamentals again. What a concept.