Space stocks climbed sharply Tuesday after Elon Musk’s SpaceX completed a merger with his artificial intelligence company xAI that values the combined business at about $1.25 trillion.
In premarket trading, shares of several space and aerospace-related companies rose after the merger was announced.
Rocket Lab’s stock gained about 3.6%, Planet Labs climbed 3.3% and AST SpaceMobile rose roughly 2.5%, while other space-linked equities such as Redwire and Intuitive Machines also showed increases.
The gains reflected investor optimism that the consolidation could spur growth across space technology and AI sectors.
Merger Brings AI and Space Under One Roof
SpaceX, the privately held rocket and satellite company founded by Musk in 2002, has officially acquired his AI startup xAI. The deal was disclosed in statements and market coverage Monday.
The merger unites SpaceX’s launch vehicles, the Starlink satellite internet network and aerospace infrastructure with xAI’s generative AI assets, including the Grok chatbot and the social media platform X, which xAI acquired in 2025.
SpaceX Chief Executive Elon Musk has publicly framed the consolidation as positioning the new company to compete in both orbital infrastructure and AI development.
Energy-intensive AI workloads may benefit, Musk asserts, from future space-based data centers that can leverage constant solar power and reduced cooling needs.
Background: Merger Talks and IPO Plans
Before the formal consolidation, SpaceX and xAI were reported to be in merger discussions ahead of a planned SpaceX IPO later in 2026.
At that stage, no final agreement had been reached and the structure and timing were still fluid. The acquisition now appears to have moved forward with key financial details emerging through media and market coverage.
Space Market Reaction
The broad rise in space-related stocks suggests trader and investor appetite for companies positioned to benefit from increased public and private investment in launch services, satellite communications and adjacent technologies.
Rocket Lab, Planet Labs and AST SpaceMobile are all publicly traded firms whose products or services intersect with space infrastructure or satellite data services.
Market analysts noted that the news could fuel further interest in space technology stocks, especially as SpaceX continues preparations for a major public listing.
Some space firms have emphasized partnerships or contracts tied to Musk’s enterprises, potentially boosting their relevance to investors tracking broader sector movements.
What Comes Next
SpaceX is expected to pursue its planned initial public offering later this year, with some reports indicating an IPO could raise as much as $50 billion and peg the company’s public valuation above $1 trillion. Specific dates and prospectus details have not yet been publicly filed.
For now, the market reaction to the merger highlights investor interest in intersections between space infrastructure and artificial intelligence development, as well as the influence of Musk’s strategic decisions across multiple high-profile technology domains.
