The SpaceX IPO: One Frontier Bet Is Enough
Everyone’s talking about SpaceX this week. The S-1 dropped on May 20, the roadshow kicked off June 4, and the listing — expected June 12 on Nasdaq under SPCX — is shaping up to be the largest IPO in stock market history. $75 billion raise. $135 per share. $1.77 trillion valuation. Saudi Aramco’s 2019 record? Not even close.
I get why people are excited. But I’m not buying SPCX at IPO. And I’m not chasing the space stocks that have run 80% in a month on the back of the filing either.
Here’s how I’m thinking about it.
I’ve Seen This Movie Before
When AI went mainstream in 2022 and 2023, the market priced in the full revolution before the revenue showed up. The hype was real. The technology was real. But monetisation took years longer than anyone admitted at the peak. We’re only now seeing AI slowly justify the capital that flooded in.
Autonomous vehicles and humanoid robotics? Same story. Waymo dominates US robotaxi. Tesla, Zoox, Apollo Go, Pony.ai and WeRide are all charging fares commercially. The technology works — but the gap between “this is possible” and “this is making real money at scale” has been longer and harder than the headlines suggested. I have positions in this space already. It’s my one frontier bet.
Space exploration sits even further out on that curve. Starlink is the exception — already commercial, already profitable. But the rest of the space economy that SpaceX’s IPO is being used to justify is still mostly running on government contracts and long-dated ambition. The market is extrapolating Starlink’s success across an entire sector that hasn’t earned it yet.
Not every IPO is the same. Sandisk listed in early 2025 and gained over 65% in its first 21 trading days — because the demand was already undeniable before listing day. Sold out of memory products through 2026. AI customers queuing for their 2027 allocation. When the revenue is already in the numbers, the stock keeps climbing.
SpaceX is a different question. Starlink is profitable, yes. But the overall company posted a GAAP net loss of $4.94 billion in 2025, with xAI projected to burn $10 billion in 2026 alone. At $1.77 trillion and 110x trailing revenue, there’s almost no margin for disappointment. Even Morningstar — not exactly a permabear — pegged fair value at $780 billion and flagged xAI as a potential value destroyer with no clear moat. That’s a long way from $1.77 trillion.
I’m not saying SpaceX won’t deliver. I’m saying $1.77 trillion is a lot to pay before it does.
RKLB: What the Hype Trade Looks Like
Rocket Lab is the clearest example of what happens when sentiment drives ahead of substance.
Since the SpaceX S-1 dropped, RKLB ran over 84% in a single month and hit an all-time high of $151. Then on May 29, a Blue Origin rocket exploded. Not RKLB’s rocket — a competitor’s. RKLB still dropped 12.87% in a single session. The whole sector sold off together because the positioning was crowded and the thesis was built on vibes, not fundamentals.
When your stock drops because someone else’s rocket blew up, you’re not holding an investment. You’re holding a sentiment trade.
The analyst consensus price target for RKLB sits at $103.91 — already 27% below the recent peak, and that’s with a “Buy” rating. The volatility alone should give you pause. That Blue Origin session wasn’t a fluke. That’s just what this kind of stock does when the mood shifts.
So if not the pure-play space names, where do I look? The answer isn’t far from the launchpad.
ATI: The One That Got Away
Allegheny Technologies Inc. is an Industrials stock. I want to be clear about that upfront — this isn’t a space bet. But the SpaceX IPO brought it back onto my radar, because ATI is one of the quiet indirect beneficiaries of the listing.
They supply the titanium, nickel, and cobalt alloys that go into Raptor engine assemblies and Starship hull construction. When the S-1 disclosed SpaceX’s capex targets for Starship production, it gave multi-year demand visibility to exactly the kind of specialty alloys ATI makes. ATI isn’t a commodity play either — they don’t sell raw metal at spot prices. They melt, forge, and precision-machine those inputs into engineered components for jet engines and missile systems, supplying 6 of the 7 most advanced jet engine nickel alloys in existence. The moat is in the process, not the metal.
Back in January, I wrote about ATI as a stock pick (here). The thesis then had nothing to do with SpaceX — it was defence budget expansion, commercial aerospace recovery, and nuclear power. I was targeting $110–115 as my entry, waiting for a pullback from $121.72. Same company, same thesis, just better odds at a lower price.
The pullback never came.
Two consecutive earnings beats. Backlog hitting a record $4.1 billion. Missile revenue doubling year-on-year. Then the SpaceX S-1 added a demand layer I hadn’t modelled, and ATI ran from the $150–160 range straight to $178.98. The thesis played out. I just wasn’t in it.
The business has genuinely improved since January — margins holding above 20%, the nuclear thesis starting to show in the numbers, guidance raised. But the market has priced in all of that improvement and the SpaceX overlay on top. At around 38x forward earnings versus 30x when I first wrote about it, I need to re-run the numbers properly before I have a view on whether there’s still a case to buy at current levels. For now, ATI is back on the watchlist.
Honeywell: Three Bets, One Stock
ATI plays the materials angle. Honeywell plays the avionics and industrial software angle — and the story here is more layered than most people realise right now.
Honeywell (HON) has been an entrenched SpaceX supplier for years — avionics, MEMS sensors, radiation-hardened electronics across both Falcon 9 and Starlink satellite architectures. I wrote about initiating a small HON position back in April (here), and I’ve been slowly adding since. But here’s what’s changed since then: that SpaceX supply relationship sits inside Honeywell Aerospace, which spins out as a standalone listed company under the ticker HONA on June 29. The space tailwind moves out of HON on that date and becomes HONA’s story.
What stays behind as HON is the automation business — Building Automation, Process Automation and Technology, and Industrial Automation. Roughly $20 billion in revenue. After June 29, HON is a fundamentally different financial entity — revenue roughly halved, balance sheet cleaner, and for the first time, one business with one focus.
Building Automation is already growing 11%, driven by data centre and healthcare demand. The Forge platform and Experion Operations Assistant — launched commercially with Chevron and TotalEnergies in March — are HON’s answer to the wave of AI startups trying to digitise factory floors. HON’s edge isn’t the software interface. It’s the 30-year customer relationships and safety certifications that no startup can shortcut.
The question I can’t answer yet is how aggressively HON is spending on AI development versus protecting near-term margins. That’s what June 8 and June 11 are for.
And while the market was watching SpaceX’s roadshow this week, HON quietly did something else. Quantinuum — its quantum computing unit — listed on Nasdaq on June 4, 2026 under ticker QNT, priced at $60 per share, raising $1.68 billion. It opened at $68 before closing near its IPO price at $60.38. HON retains 48.1% of the voting power. Most people missed this completely. The asset moves off the balance sheet and becomes a separately listed stake — hidden value, quietly unlocked.
So here’s how I think about the HON ecosystem now — three bets at three different points on the technology curve, each being separated to trade on its own merits:
| Entity | Sector | Horizon |
|---|---|---|
| HONA | Aerospace, defence, eVTOL | Cash generative today |
| HON | Industrial AI, building automation | 3–5 year AI inflection |
| Quantinuum (QNT) | Quantum computing | 5–10 year horizon |
SPCX vs HONA: Two Listings, Very Different Bets
With HONA spinning out on June 29 — just two weeks after SPCX lists — it’s worth putting the two side by side. Both give you aerospace exposure. They are not the same bet.
| SPCX (IPO ~Jun 12) | HONA (Spinoff Jun 29) | |
|---|---|---|
| Revenue (2025) | ~$20B | $17.4B |
| Profitability | GAAP net loss $4.94B | Profitable — $4.3B pro forma adj. EBIT |
| Valuation | ~$1.77T ($135/share) | Not yet priced — spinoff distribution |
| Listing type | Traditional IPO | Tax-free spinoff |
| SpaceX exposure | Direct — it is SpaceX | Indirect — entrenched supplier |
| Growth optionality | Starship, xAI, Mars | eVTOL — Archer Aviation, Vertical Aerospace |
| What you’re buying | The rocket + satellite internet + AI empire | The avionics, engines and navigation systems inside the aircraft |
SPCX is priced for the full vision — Mars, Starlink dominating global broadband, xAI becoming a profitable AI lab. HONA is priced for what it already is: one of the largest pure-play aerospace and defence suppliers in the world, with its technology on 90% of commercial aircraft and 70% of military aircraft globally.
HONA also has optionality that most people are missing. It’s the picks-and-shovels play for eVTOL — supplying avionics, fly-by-wire systems, and electric propulsion to Archer Aviation and Vertical Aerospace, rather than betting on which manufacturer wins. That eVTOL revenue is a 2027–2030 story at the earliest, so you’re not paying for it today. You’re getting it free on top of a profitable aerospace business.
The June 3 Aerospace Investor Day gave the first clean look at what HONA stands for as a standalone business. Management guided $6.5 billion in adjusted earnings by 2030, driven by jetmaker and defence demand. Capital allocation will go into factory capacity and supply chain rather than dividends or buybacks. The $500 million framework agreement with the Pentagon, RTX, and Lockheed Martin for missile and navigation systems production is also locked in — that’s visible backlog.
The market reaction on June 3 tells me something. HON dropped 3.55% on the day of the HONA investor day. Whether that reflects skepticism about HONA’s standalone growth, uncertainty about what HON looks like without aerospace, or both — the muted reaction suggests investors are still undecided on the standalone story. This isn’t shaping up like Sandisk. I wouldn’t be surprised if HONA trades down in the weeks after listing as investors who didn’t choose aerospace sell their allocated shares.
One Frontier Bet Is Enough
Whether it’s SPCX at $1.77 trillion or HONA as a pure-play aerospace spinoff, space is a frontier sub-sector — the same category as the autonomous vehicles and robotics positions that already make up over 35% of my portfolio. That AV allocation is a contrarian bet the market hasn’t rewarded yet, sitting at -13.76% on cost basis. Adding space on top means carrying two frontier sub-sectors simultaneously. That’s not diversification. That’s doubling down on uncertainty.
I know my own limit. One frontier bet at a time. The AV thesis needs time to play out. Until it does, space stays on the watchlist — not the portfolio.
HON and ATI are different. They’re not bets on the space frontier. They’re established businesses with real earnings that happen to benefit from the aerospace cycle. That’s where I’m looking while everyone else is watching the rocket.
This article represents the author’s personal investment research and opinions. It is not financial advice. Please do your own due diligence before making any investment decisions.