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Rocket Lab (RKLB) stock surged 10% in recent trading, closing the week at $61.49 per share, fueled by fresh reports that Elon Musk's SpaceX is gearing up for a blockbuster initial public offering in 2026. As the world's largest private space company, SpaceX aims to tap public markets with a staggering $1.5 trillion valuation target, potentially raising over $30 billion – the largest IPO ever.

The listing – eyed for mid- to late-2026 – rides the wave of Starlink's explosive growth and Starship's moonshot ambitions. While SpaceX's move won't directly touch Rocket Lab's operations, investors piled into shares of Rocket Lab anyway, betting on a rising tide lifting all space stocks. This exuberance highlights the sector's frothy mood, but the math behind these valuations demands a closer look.

Sky-High Multiples in the Space Race

Investors scribbled back-of-the-envelope calculations that extrapolated SpaceX's lofty ambitions onto peers like Rocket Lab. If SpaceX achieves the estimated $23 billion in revenue for 2026 that is projected (equivalent to NASA's budget) due to the ongoing Starlink satellite broadband boom and a possible direct-to-mobile business, a $1.5 trillion valuation gives it a forward price-to-sales (P/S) multiple of about 65x – stratospheric, even for Musk's empire (as Tesla trades for around 15x).

Rocket Lab, with a current market cap hovering around $32 billion and analysts forecasting roughly $900 million in 2026 revenue on Electron launches and emerging Neutron contracts, trades at a somewhat more grounded 33x forward sales, or half the premium SpaceX might command.

If the market applies only some of the SpaceX hype onto Rocket Lab – giving it a 50x multiple, for example – its market cap could balloon to $45 billion, causing shares to rocket 50% or more.

It's the kind of quick math that turns stock chatrooms into echo chambers of optimism, with Rocket Lab's backlog hovering around $1.1 billion as rocket fuel for the fantasy.
 

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Tempering Enthusiasm With a Dose of Reality

But can SpaceX even snag such an IPO valuation? It may not – and arguably shouldn't – achieve such heights. While Starlink's user base could swell to 10 million by 2026, and Starship promises reusable heavy-lift magic, there remain regulatory hurdles, launch delays, and even political fights that could clip those wings. A $1.5 trillion tag feels a bit ambitious.

Second, Rocket Lab isn't a SpaceX clone deserving the same premium. Its Electron rocket has proven a reliable workhorse, nailing 18 launches so far this year and cornering the small-satellite niche with pinpoint precision. The upcoming Neutron could unlock medium-lift markets and cause revenue to jump sixfold, targeting bigger payloads and constellation deployments.

Yet SpaceX's Falcon 9 and Starship haul heavier, pricier cargo, such as NASA crewed missions to the ISS or Starlink's own mega-constellation. Rocket Lab's niche is nimble and growing, but it lacks SpaceX's scale, government lock-in, and, most importantly, profitability.

I've long argued Rocket Lab stock has a stellar trajectory – its vertical integration and launch cadence make it a long-term buy. But equating SpaceX multiples to Rocket Lab is putting the booster rockets ahead of the cargo bay.

Bottom Line

The recent jump in shares, while exciting, is simply market exuberance, a reflexive move on SpaceX IPO buzz that will soon return to earth. Rocket Lab does have a solid upward arc before it, as its Neutron rocket ramps up and space demand soars, and it deserves to be part of diversified portfolios. Just don't get caught up in the speculative fervor of the moment.

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