Rocket Lab, Intuitive Machines and Space Stocks Drop – Is the SpaceX IPO Hype Over?

TLDR

• Space stocks dropped an average of 9% on Wednesday after SpaceX set its IPO price at $135 per share, valuing the company at $1.75 trillion — below the $2 trillion many investors expected.
• Intuitive Machines fell 15.2%, Rocket Lab dropped around 7%, and AST SpaceMobile lost nearly 9% on the day.
• Despite the selloff, many space stocks are still up massively over the past six months, with some names up over 400%.
• Several companies in the sector remain unprofitable, and a Blue Origin rocket explosion added further pressure to sentiment.
• Traditional defense stocks like Boeing and Northrop Grumman held up much better than pure-play space names.

Space stocks sold off sharply this week after SpaceX revealed its IPO pricing, and investors began locking in gains from one of the market’s hottest recent rallies.

SpaceX IPO Pricing Triggers Selloff

SpaceX set its IPO price at $135 per share, giving Elon Musk’s rocket company a valuation of around $1.75 trillion. While that is a large number, it fell short of the $2 trillion some investors had been anticipating, which appeared to trigger profit-taking across the sector.

Intuitive Machines led the decline, falling 15.2% on Wednesday. Merlin dropped 12.8%, Sidus Space fell 12%, and Redwire lost nearly 10%. Rocket Lab fell around 7%, and AST SpaceMobile dropped close to 9%.

Intuitive Machines, Inc., LUNR

By Thursday morning, many of those names were down another 1% to 4% in premarket trading.

The selloff came after an extraordinary run-up. Rocket Lab is still up nearly 194% over the past six months. Intuitive Machines has gained more than 320% over the same period. Redwire is up around 294%, and Satellogic has risen more than 456%. Sidus Space has climbed over 660% in six months.

Coming into Thursday, the group was still up an average of 64% over the past month.

Sector Faces Profitability Questions

Despite the excitement around the space economy, many of the hardest-hit companies are not profitable.

Intuitive Machines posted a trailing 12-month net loss of around $109 million. Rocket Lab reported a loss of roughly $183 million. Redwire recorded a net loss of about $300 million.

Rocket Lab USA, Inc., RKLB

Several electric air taxi companies including Eve Holding and Vertical Aerospace are also deep in the red.

Some companies used the rally to raise fresh capital by selling stock at elevated prices. That practice can attract scrutiny when prices start to fall.

An explosion of Blue Origin’s New Glenn rocket also weighed on investor confidence during the week.

Traditional Defense Names Hold Steadier

Not all aerospace and defense stocks were hit equally. Boeing fell 1.9%, Northrop Grumman slipped 0.4%, L3Harris edged down 0.7%, and Huntington Ingalls declined 0.7%.

That suggests investors are pulling back from high-growth space names rather than exiting the broader defense sector entirely.

SpaceX helped create the modern commercial space industry by pioneering reusable rockets, which dramatically cut the cost of reaching orbit. That opened the door for businesses in areas like Earth imaging and broadband satellite internet.

Once SpaceX shares become publicly available, some analysts expect money to rotate away from smaller space companies and toward the dominant player in the sector.

The space economy continues to grow, supported by rising government defense spending and expanding satellite deployments. But valuations across the sector had stretched significantly heading into this week, and the IPO pricing served as a reset for many investors.

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