SpaceX is set to have its initial public offering (IPO) on June 12, and the company's public debut is set to be a big test for the market. The company recently announced it had lowered its target valuation by roughly $200 billion, but it is still planning to sell its first batch of stock at a price that would value the space tech specialist at roughly $1.77 trillion.
If SpaceX stock falters and sees big sell-offs upon its public debut, it could have bearish ripples for the broader market in the near term. On the other hand, a strong start for SpaceX could be a sign that investors' appetite for growth stocks remains strong, triggering a renewed risk-on rally.
With that in mind, read on for a look at two stocks that could be big winners if a strong public debut for SpaceX helps support bullish momentum for the broader market.
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1. Micron
Micron (MU 12.36%) has been a huge winner over the last year and has emerged as a pivotal stock in the artificial intelligence (AI) trade, shaping the broader market. The company's share price is up 898% over the last 12 months, and some Wall Street analysts are betting that it will keep marching higher.
For example, Susquehanna recently raised its one-year price target on Micron stock to $1,750 per share. The investment firm cited higher DRAM memory prices, up 50% to 60% on a quarter-over-quarter basis, as a key reason for its bullish valuation target. The firm also continues to expect NAND memory prices to be up between 75% and 100% on a sequential quarterly basis.
Micron's status as a leading provider of high-bandwidth memory (HBM) chips and other memory solutions for AI processors and data center applications has driven incredible gains for the stock, and demand looks poised to remain strong for the foreseeable future. But Micron has become a lynchpin in influencing momentum for the broader market -- and also a company that typically sees moves in line with the broader market.
NASDAQ: MU
Key Data Points
If SpaceX's IPO proves a hit and the space-tech company's valuation surges after its public debut, it could foster broader bullish sentiment that sends Micron stock higher. Micron's long-term outlook isn't contingent on what happens with SpaceX's IPO, but the memory specialist's bull run this year could be extended by positive catalysts connected to the public debut of Elon Musk's space company.
2. Rocket Lab
Like SpaceX, Rocket Lab (RKLB 8.26%) provides launching services that third parties can use to get satellites and other technologies into orbit. Rocket Lab is also moving into satellite production -- a move that further aligns it with SpaceX. The company has recently won a contract with the U.S. Space Force to produce, launch, and operate geostationary orbit (GEO) satellites.
Even after a recent pullback, Rocket Lab's share price is up roughly 74% year to date as of this writing. Notably, the rocketry specialist's valuation contraction was heavily influenced by news related to SpaceX. While the launch pad explosion of a Blue Origin rocket that occurred on May 28 played a significant role in recent sell-offs for Rocket Lab stock, news surrounding SpaceX's upcoming IPO has also factored into the pullback.
NASDAQ: RKLB
Key Data Points
While SpaceX had potentially been targeting a valuation of $2 trillion for its IPO, the company has since lowered the price of its first stock offering to $135 per share -- a level that valued the company at $1.77 trillion. The space-tech company is still poised to be, by far, the biggest IPO in history, but its move to lower its stock price has had significant valuation ripple effects across the industry.
As a result of the Blue Origin explosion and SpaceX's lowered IPO pricing, Rocket Lab stock is down roughly 20% from its lifetime high as of this writing. On the other hand, Rocket Lab still has a valuation that is highly dependent on growth. The company currently has a market capitalization of roughly $70 billion and is valued at 77 times this year's expected sales.
If SpaceX stock sees strong gains following its IPO, there's a good chance that some other players in the space tech industry will see bullish momentum as well. In such a scenario, it's likely that Rocket Lab will see its share price move higher.
