According to the latest statistics from renowned stock market data provider S3 Partners, two of the best-performing US space stocks over the past month—companies at the forefront of space exploration closely tied to the broader commercial spaceflight sector—are experiencing a sharp rally. This surge may soon expose short-sellers betting against these recently soaring stocks to a significant risk of being "burned" by a large-scale short squeeze. This dynamic indicates that the global stock market's commercial space sector is transitioning from a "science fiction-like thematic concept" into a bullish phase driven by "orders, high-frequency launch capabilities, and a short squeeze structure," leading to crowded long positions. Data shows that since March 30, Intuitive Machines, Inc (LUNR.US) and Rocket Lab Corp. (RKLB.US) have seen their stock prices surge by 123% and 131%, respectively. The rapid ascent has positioned both stocks with notable preconditions for a potential short squeeze. A short squeeze occurs when sellers may be forced to continuously buy back shares to cover their losing positions, further driving up the stock price and increasing pressure on this group of short-sellers. S3 Partners' research director, Leon Gross, stated in a social media post on Thursday that the underlying reasons for the significant short squeeze risk in these two stocks differ slightly. Gross wrote: "One is structural (crowded trading), the other is momentum-based (reflecting the recent losses of short-sellers)." As shown in the chart above, Rocket Lab and Intuitive Machines have seen their stock prices skyrocket recently. For the upcoming global space exploration leader SpaceX, the "commercial spaceflight investment frenzy" sweeping global stock markets signifies that capital markets are preemptively setting valuation anchors and rehearsing bullish sentiment ahead of this "commercial spaceflight supergiant's listing." If SpaceX goes public via an ultra-large-scale IPO on the US stock market, it could become a pricing hub for the commercial space sector, akin to "Nvidia for AI computing infrastructure": on one hand, enhancing the entire sector's liquidity and institutional attention; on the other, potentially compelling institutional investors to reassess the long-term Total Addressable Market (TAM) of sub-sectors such as launch services, satellite communications, lunar missions, AI data centers deployed in space, and defense-grade space-based missile defense systems. The space exploration company SpaceX, founded by Elon Musk, is accelerating its listing process. According to informed sources, the company may publicly disclose its prospectus as early as next week, preparing for what is expected to be a record-breaking initial public offering (IPO). Some media reports cite sources indicating that SpaceX plans to raise approximately $70 to $75 billion, a scale more than double the record for the world's largest IPO set by Saudi Aramco in 2019, with an overall valuation potentially reaching up to $2 trillion. As the world's wealthiest individual to date, Musk has previously accomplished what others deemed impossible—building a commercially viable high-frequency rocket launch business through SpaceX, bringing electric vehicles into the mainstream market through global EV leader Tesla Inc., and providing internet connectivity infrastructure services from space through Starlink. However, some investors doubt whether Musk can truly build his "most epic" chip-making initiative recently outlined in Austin and realize his envisioned "super blueprint for artificial intelligence, autonomous driving, humanoid robots, and space-based AI data centers." SpaceX's listing expectations have ignited the "space trading theme": two star space stocks have surged over 120%, and short squeeze risks have intensified sharply. As global investors actively position in space exploration companies seen as beneficiaries of the record fundraising scale from Elon Musk's SpaceX, the expansion of US Space Force infrastructure, NASA space exploration and lunar contracts, and growing commercial space order backlogs, bullish sentiment around the commercial space sector has continued to heat up since the beginning of the year, driving increased attention from Wall Street institutional investors. The rise in Intuitive Machines' stock price has been driven by US Space Force contracts and a $1 billion revenue outlook. According to a report released by S3 Partners on May 14, the stock's short interest as a percentage of float now exceeds 18%. This metric measures the proportion of tradable shares borrowed by traders to bet on a price decline. This notably high level, combined with the stock's recent rally, has made short-selling trades increasingly crowded. S3 data shows that traders betting against Intuitive Machines' stock price have incurred over $550 million in paper losses year-to-date. Rocket Lab's short squeeze setup is more driven by momentum indicators. After the company reported first-quarter revenue that exceeded nearly all Wall Street analysts' expectations and stated that demand for rocket launches and space-related commercial services was exceptionally strong, its stock price surged over 60% within a week. According to S3 statistics, although the stock's short interest as a percentage of float is relatively low at just 5.5%, the rapid price increase could trigger large-scale covering by existing short-sellers. Moreover, compared to Intuitive Machines with a market cap of less than $6 billion, Rocket Lab's market cap of nearly $8 billion is substantially larger. Year-to-date, short-sellers of this stock have accumulated approximately $1.9 billion in paper losses, far exceeding those of Intuitive Machines. Discussing Rocket Lab, a SpaceX competitor riding the "space orbit computing" trend, Gross stated in a social media post: "Short covering hasn't really happened yet; the market trading pattern is set, but a large-scale short squeeze hasn't occurred." "Musk Faith" Sweeps the Globe! SpaceX's Super IPO Frenzy Ignites Commercial Spaceflight Investment Boom In recent years, both the US and Chinese governments have invested tens of billions of dollars in an attempt to return humans to the moon and fully support commercial space technology companies of all scales in actively exploring space, significantly heating up investment across the entire commercial spaceflight sector. Recently, NASA's "Artemis II" spacecraft, carrying four astronauts, conducted the first personal trajectory flight toward the moon in over 50 years, with the crew traveling farther into space than any astronauts in history. From the perspective of space engineering and industry chain, beyond what some investors call "Musk faith," the commercial spaceflight frenzy indeed has real industrial logic: reusable rockets lowering launch costs, low Earth orbit constellations reshaping communication and remote sensing economics, Space Force and NASA contracts providing government demand anchors, lunar infrastructure and deep-space missions opening long-term imagination, while "new frontier space economic models" such as space-based AI data centers, spatial computing, and customized in-orbit services add new grand narratives to the market. Rocket Lab is advancing its Neutron medium-lift rocket to tap into larger payload markets, while Intuitive Machines is enhancing revenue and profit growth trajectory visibility through lunar services, space communications, space situational awareness, and expansion via mergers and acquisitions. This indicates that the "spillover trading ahead of the SpaceX IPO heat" is not merely riding on SpaceX's IPO momentum but is a search for publicly traded, growth-potential commercial spaceflight growth stock assets. The imminent listing of global space exploration leader SpaceX, led by Tesla CEO and world's richest person Elon Musk, is triggering a global capital rush toward frontier space exploration companies closely associated with the broader commercial spaceflight sector but with smaller operational scales compared to SpaceX. Global stock market investors are eager to find ways to ride the "coattails" of what could become the largest IPO in stock market history. Investing in technology companies founded by Elon Musk—whether Tesla, SpaceX, or xAI, which has merged with SpaceX—is less about betting on financial fundamentals outperforming the market and more about casting a vote of confidence in his personal vision for future growth. The most typical current case of "Musk faith" is precisely SpaceX. Investors flocking to assets associated with SpaceX through Tesla and Destiny Tech 100 Inc are not just betting on today's satellite broadband empire and rocket launch business but are paying a high premium for long-term blueprints such as "1 million satellites, hyperscale space cloud servers, solar-powered space orbit AI computing systems, even lunar satellite factories," and even a Kardashev Type II civilization. As the biggest bottleneck for global AI data centers shifts from "AI chips" to "power systems and deployment," SpaceX's narrative of "sending data centers into space orbit, powered by solar energy," is entering an engineering trial-and-error phase. Capital markets urgently need larger, more stable capital pools and more unified organizational boundaries. In Musk's AI computing infrastructure plan, as the AI boom begins to encounter increasingly large-scale infrastructure and energy supply bottlenecks, the next major leap in artificial intelligence might not occur on land but in space. SpaceX plans to launch an astonishing 1 million satellites, which will act as a distributed space-grade cloud computing super-server system. These orbital data centers in space are said to utilize solar power to process astronomical levels of AI workloads. Musk believes that to achieve this goal, there is a pressing future need to build a super satellite factory on the moon, enabling lunar electromagnetic launch of AI super satellites. Undoubtedly, these Hollywood sci-fi-like, wildly imaginative visions will require substantial cash—and the potential SpaceX initial public offering (IPO) is precisely the source of that massive funding.
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