Back when I ran a hedge fund here in Atlanta, one of my jobs was overseeing every IPO transaction our firm participated in.
Brokers would call in with the details of a new deal, and I had to decide whether we'd get involved, and if so, how much capital we'd commit.
I did this for years, across dozens and dozens of deals, and you start to notice the same patterns show up over and over again.
One of those patterns is playing out right now with SpaceX (SPCX).
Why $135 Is the Line Wall Street Won't Let Break
SPCX has pulled all the way back to its original IPO price, right around $135.
On the surface, that might look concerning. In reality, I think this is exactly where the stock needed to land, and I think it gets defended vigorously from here.
Here's why.
The investment banks that led this deal have a massive incentive to make sure it doesn't break down. SpaceX was one of the biggest IPOs in history, and it's also the deal that opens the door for the next wave.
Anthropic, OpenAI, and others are reportedly lining up to go public in the months ahead. If the SpaceX deal falls apart, it becomes a lot harder to convince investors to show up for the next round of offerings.
Wall Street simply can't afford for that to happen.
That's the pattern I learned firsthand overseeing IPO participation at the hedge fund.
Underwriters don't just walk away after pricing a deal. They have real capital and real reputational risk tied up in defending key levels, especially the original IPO price, especially on a deal this large and this important to future business.
The rest of the space sector has pulled back right alongside SPCX.
That's normal.
The whole group got ahead of itself in the excitement leading up to and immediately following the IPO, and now it's had time to digest all the new shares hitting the market.
Now that SPCX is sitting in a level I expect to be defended, I think we're looking at a high-probability setup for a rebound across the space sector.
Here are three names from my Watch List that I think are worth having on your radar right now.
Mercury Systems (MRCY)
Mercury Systems is essentially the brains and muscle behind the electronics inside modern aerospace and defense systems.
Its customer base reads like a who's who of defense primes: Lockheed Martin (LMT), RTX, and Northrop Grumman (NOC).
The stock is trading near $103 and has had a strong run over the past two months as Wall Street's attention on the aerospace industry intensified heading into the SpaceX IPO.
Analysts expect the company to earn $1.08 per share this year, growing to $1.55 in 2027.
That does make the stock look expensive relative to current earnings, but I think the growth trajectory in this industry supports that premium. Mercury reports earnings in early August.
ATI Inc. (ATI)
ATI used to be known as Allegheny Technologies, a legacy steel manufacturer.
Today it's transformed into a pure-play specialty materials and aerospace engineering company. And investors increasingly view it as a way to play the emerging space, rocket, and satellite industry through the complex, high-performance components it produces.
The stock trades near $194, and analysts expect $4.47 per share in earnings this year, growing to $5.45 in 2027.
That puts the stock at roughly 36 times next year's expected profits, not cheap, but this is the kind of name that can carry a premium multiple as long as demand for space and satellite hardware keeps expanding.
ATI reports earnings on August 6.
BlackSky Technology (BKSY)
BlackSky is the riskiest of the three, and I want to be upfront about that. This is a company operating a low-earth-orbit satellite constellation, using AI analytics to process images taken from space and flag object detection in short order.
The company isn't profitable yet, though BKSY has a path toward profitability, likely by 2028, with sales expected to grow significantly in the meantime.
What's interesting here is the broader tailwind.
Space stocks have been benefiting from investor interest as SpaceX went public, and BlackSky's competitor Iridium (IRDM) just announced it's being acquired, which has reignited investor attention across the whole sector.
BKSY trades near $24 and reports earnings in early August.
The Bigger Picture
Three very different companies:
One is an established defense electronics supplier.
One transformed itself from an old-line steel manufacturer into a specialty aerospace materials play.
One is a speculative, not-yet-profitable satellite company riding real sector tailwinds.
That range is intentional. Space isn't a single trade, it's an entire ecosystem, and there is opportunity across multiple parts of it as this sector works through its post-IPO digestion period and finds its footing again.
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