OPINION: Space Stocks Gain Momentum as Investors Search for the Right Price

Space stocks have experienced a year of sharp swings, reflecting both growing confidence in the commercial space economy and continued uncertainty over how the sector should be valued.

SpaceX’s public listing in June, the largest in market history, valued the company at close to $1.8 trillion and helped drive renewed enthusiasm across publicly listed satellite and space-related companies. However, much of that momentum quickly reversed, with space stocks losing roughly half their value on average over the summer.

September has so far brought another shift in sentiment. A wave of more bullish analyst coverage has renewed investor interest in the sector, with AST SpaceMobile gaining as much as 12% in a single session as space-related stocks moved higher.

According to Nagham Hassan, MENA Market Analyst at etoro, these sharp moves highlight a market that increasingly believes in the long-term opportunity, but is still working out what these companies are worth.

One of the key drivers behind the sector’s growth has been the significant decline in the cost of reaching space. The development of reusable rockets has lowered launch costs to the point where commercial applications that were once largely restricted to governments are becoming increasingly viable for private companies.

This shift is also translating into meaningful commercial contracts. NASA awarded Blue Origin, the space company founded by Jeff Bezos, a $700 million contract to develop a communications network around Mars, while Rocket Lab secured a defence contract worth approximately $190 million for hypersonic test flights. AST SpaceMobile, meanwhile, has agreements with more than 60 mobile network operators as it develops broadband connectivity that can be delivered directly to standard smartphones.

These contracts provide an important distinction between the current cycle and the more speculative wave of space listings seen several years ago, as companies are increasingly demonstrating identifiable customers and commercial demand.

Valuation, however, remains the central challenge for investors. SpaceX is valued at many times its current revenue, while AST SpaceMobile continues to operate at a loss as it builds out its network. Although investors may broadly agree that these companies are developing technologies with significant future applications, there is far less consensus around how quickly those opportunities will translate into sustainable profitability.

“When a company is valued on the assumption of a near-perfect future, even positive developments may not be enough to meet market expectations,” said Hassan. “That helps explain why space stocks can experience such significant moves in both directions. Investors are not necessarily questioning whether the industry has a future, but rather how much of that future should already be reflected in today’s valuations.” For UAE investors, the investment theme is also increasingly visible closer to home.

Abu Dhabi-listed satellite operator Space42 has outperformed the ADX and risen by more than 50% since mid-March. The company reported first-half revenue growth of 15% to $260 million, while its backlog stands at $6.3 billion, supported by long-term government contracts. Space42 is also expected to launch its direct-to-device service by the end of the year, giving it exposure to the same satellite-to-smartphone technology that has attracted significant investor attention in global markets.

“The commercial space sector is becoming increasingly real, supported by lower launch costs, government and private-sector contracts, and new applications ranging from communications to defence,” Hassan added. “The volatility we are seeing is the market trying to determine the right price for that opportunity, and that process is unlikely to move in a straight line.”