SpaceX slump makes space stocks attractive

SpaceX’s public debut failed to boost the broader space sector as anticipated. Instead, three smaller space stocks dropped sharply, prompting some analysts to identify a potential buying opportunity.

When SpaceX filed for its initial public offering, investors flocked to Rocket Lab, Planet Labs, and AST SpaceMobile, viewing them as proxies for the industry. The assumption was straightforward: SpaceX’s success would lift all related companies. The IPO’s arrival, however, triggered the opposite effect. Shares of those firms fell as capital exited the sector, leaving them at significant discounts.

Analyst Luke Lango, who monitors emerging industries, described the sell-off as excessive. In a written market note, he labeled the three stocks “among the most attractive buys in space today.” His argument relied on their core operations—launch services, Earth observation, and satellite broadband—which he believes remain strong despite recent market turbulence.

Rocket Lab holds contracts with NASA and the U.S. Space Force. Planet Labs manages a satellite fleet delivering daily global imagery. AST SpaceMobile is developing a network to provide cellular broadband directly to smartphones via satellite, a market with substantial potential. While none directly compete with SpaceX, all suffered when investor interest faded.

The space sector has a history of volatility. This pullback was severe, with some stocks selling off sharply. The analyst’s rebound case focuses on revenue and contracts, not just sentiment.

SpaceX remains private, so its financials are undisclosed. Lango suggested profitability could still be years away due to the high costs of rocket development and launches. That delay may explain why investors who once saw space stocks as a SpaceX bet have since retreated, creating what he called “a rare pricing error.”

Risk remains a factor. Launch failures, regulatory challenges, and shifting government priorities can disrupt even well-positioned companies. While Lango’s analysis indicates undervaluation, a quick recovery isn’t guaranteed. Some investors may wait for clearer signs of stability.

Beyond space, the analyst observed a similar trend in artificial intelligence. Most attention has centered on the Magnificent Seven—tech giants driving AI—but he noted smart money is shifting toward supporting infrastructure. That includes energy, power grids, and data centers, not just software and chips.

The challenge is that many key infrastructure companies are private, limiting investor access. His research highlights seven stocks that could benefit from the same trend. It’s not a direct AI play but a foundational approach to a market requiring massive new spending.

For space stocks, the situation is clearer. The sell-off was rapid and damaging, with an uncertain recovery. If the companies deliver on their contracts and business models, current prices could appear misjudged later. That remains a significant condition, one investors must evaluate carefully.