Last week, Tracey and I were watching one of those glossy streaming documentaries about Elon Musk's space plans that came out a few years ago. At some point, I noted that he now wanted to put data centres in orbit. "That sounds expensive," she said, not looking up from her phone. She's not wrong. And in three words, she'd essentially summarised our investment thesis on SpaceX's upcoming IPO.
SpaceX filed its prospectus on 20 May, targeting a Nasdaq debut around 12 June under the ticker SPCX. Nasdaq has heavily changed its indexing methodology to accelerate SpaceX’s addition to its index, boosting the amount of shares in stock indices, and slashing the time before index funds are forced to buy and insiders are allowed to sell.
The numbers are eye-watering: a valuation of $1.75 trillion, a target raise of up to $75 billion, and a price-to-sales ratio of roughly 113 times. To put that in context, Tesla – hardly a bargain-basement stock – trades at about 16 times last year’s sales. Even Nvidia, the poster child of the AI boom, sits at 25-30 times.
Now, I'm not going to pretend SpaceX isn't an extraordinary company. Starlink alone has more than 10 million subscribers, generated an estimated $11.4 billion in revenue last year and accounts for roughly 65% of all active satellites in orbit. The reusable rocket technology is genuinely transformative. But extraordinary companies can still be terrible investments if you pay too much for them. And the merger with xAI – Musk's artificial intelligence venture – adds another dimension of risk. The IPO filings revealed that xAI racked up an operational loss of $6.4 billion against revenues of just $3.2 billion in 2025. That's burning cash like, well, like a rocket burns fuel.
So the question we asked ourselves wasn't, "Is space exciting?" – of course it is – but rather: "Can we get exposure to this theme through companies that are already making real money?"
The answer, happily, is yes. And we already own them.
The gas station at the launchpad
Start with Linde. This is a $200-billion-plus industrial gases company that has been supplying liquid oxygen to rocket launches since the Apollo programme. Today, Linde powers more than four out of five commercial space launches in the United States and has invested nearly $1 billion in expanded facilities in Florida and Texas to meet surging demand. It doesn't need Musk to succeed; it supplies everyone who launches anything. That's the kind of picks-and-shovels position we love: essential, recurring and growing.
The wiring behind every mission
Then there's Amphenol, one of the world's largest providers of high-technology connectors and wiring solutions. Its defence segment delivered 29% organic growth in the fourth quarter of 2025, with space explicitly called out as a key driver. Full-year sales hit $23.1 billion, up 52% year-on-year, with record profitability. Amphenol's connectors are in virtually everything that flies, drives or computes. You might not see them, but they're there – quietly compounding.
Parker Hannifin completes the industrial trio. Its Aerospace Systems division manufactures the valves, hydraulics and thermal management systems that keep spacecraft functioning in the most hostile environment imaginable. These are not glamorous businesses. They don't generate breathless headlines. But they generate cash.
Profiting from the signal, not just the satellite
The space economy isn't just about launching things into orbit. It's increasingly about what those satellites enable back on Earth. T-Mobile, which we access through our holding in Deutsche Telekom, has partnered with SpaceX to offer direct-to-cell satellite connectivity – eliminating mobile dead zones across more than 500,000 square miles of the US. The service launched commercially in July 2025 and is already expanding internationally.
Meanwhile, Microsoft's Azure cloud platform has a deep integration with Starlink, effectively treating space as an extension of its terrestrial network. And Alphabet – which, incidentally, holds a 6-7% stake in SpaceX itself – is actively exploring orbital data centres through its Project Suncatcher initiative, with prototype satellites planned for 2027.
These are businesses generating real, recurring revenues from satellite connectivity today.
Our philosophy hasn't changed
I've been in this industry for over 40 years, and I've seen my share of ‘once-in-a-generation’ IPOs. Some of them were. Most of them weren't – at least not at the price offered. The SpaceX IPO will generate enormous excitement, and the hype will be off the scale. But we don't invest in hype. We invest in businesses with durable competitive advantages, pricing power and the ability to compound returns over time. Is SpaceX up to the hype? We’re not sure yet. And the changes to exchanges’ indexing rules are setting up an extraordinary level of demand for the company’s shares, which could create strong upward momentum.
Regardless, you don't need to buy SpaceX at launch – no pun intended – to get exposure to the space economy. We already own the companies supplying the fuel, the wiring, the connectivity and the cloud infrastructure that make the entire space economy work. The picks and shovels, as ever, are where the real money is compounded.
These names may not have the pizzazz of Musk's venture. But they have something better: cashflow.
