RKLB, ASTS, And Other Space Stocks Surged 1,123% And Then Crashed — Chamath Palihapitiya Says ‘What Investors Expect’ Drives Prices

Social Capital’s 10-stock space research basket, including RKLB and ASTS, surged 1,123% before losing two-thirds of its peak value.

• Despite the selloff, the basket remained about 300% above its January 2024 starting level and ahead of the S&P 500.
• Palihapitiya said stock prices reflect investor expectations more than companies’ current earnings.
• Private investment in space hardware reached about $17 billion in 2025, with funding excluding SpaceX growing more than 30-fold since 2012.

Billionaire tech investor Chamath Palihapitiya put space stocks’ boom and bust in focus late Tuesday as his firm Social Capital’s research basket — including Rocket Lab (RKLB) and AST SpaceMobile (ASTS) — gave back two-thirds of its peak value after a more than twelvefold rise.

“Stock prices reflect what investors expect more than what companies earn today,” Palihapitiya said on X.

Space Stocks Give Back Much Of Their Rally

Social Capital built an equal-weight research basket of 10 space stocks that surged 1,123% between Jan. 2, 2024, and its May 28, 2026, peak, before losing two-thirds of its peak value by Oct. 16.

Alongside Rocket Lab and AST SpaceMobile, it included Intuitive Machines (LUNR), Redwire (RDW), Planet Labs (PL), BlackSky (BKSY), Spire Global (SPIR), Satellogic (SATL), Virgin Galactic (SPCE) and Globalstar (GSAT).

Despite the steep selloff, the basket remained 300% above its starting level and continued to outperform the S&P 500. A hypothetical $10,000 investment would have grown to about $122,300 at the peak before falling to around $40,000 by mid-October, which is still a decent gain, but far below its high.

Space’s Investment Boom Spreads Beyond SpaceX

Private investment in space hardware climbed to about $17 billion in 2025 from roughly $500 million in 2012, with growth extending well beyond SpaceX. “The easy answer is ‘because of SpaceX,’ but even excluding SpaceX, space hardware investment has grown more than 30-fold since 2012,” Palihapitiya said.

The industry’s manufacturing base has also widened. In 2025, 184 companies built at least one satellite launched that year, up from 32 in 2000. That nearly sixfold increase points to more businesses entering the market and competing for orders. 

Cheaper launches have also helped open the door. Palihapitiya said launch costs per kilogram fell 25-fold between the Space Shuttle and SpaceX’s Falcon 9, lowering the cost of getting hardware into orbit and making more space-based businesses financially viable.

Governments Still Pay Most Of The Bills

Palihapitiya highlighted a shift in government demand toward defense, noting that NASA’s share of federal spending fell from 4.4% in 1966 to about 0.4% in 2025, while Space Force’s regular budget overtook NASA’s in fiscal 2023.

He said Space Force’s regular fiscal 2027 funding request was three times NASA’s, before another $12.1 billion in proposed one-off funding.  “I just don't see how the defense spend on space is going to stop,” one unnamed expert interviewed for Social Capital’s research said.

Palihapitiya also highlighted the industry’s reliance on government customers, citing Social Capital’s review of seven basket companies that disclose who pays them. “Their revenue is rising, but most of it still comes from governments: 56% in 2025, or about 60% once we count private customers that governments fund,” he said.

According to him, government orders help companies expand production and lower costs, potentially opening the door to broader commercial demand. 

“So is this a temporary burst of government spending on a market that doesn’t really exist, or is the state only speeding up an industry that will eventually stand on its own?” Palihapitiya asked.

Space Faces Its Commercial Test

Palihapitiya said government-backed industries grow in four stages: public funding gets them started, competition lowers costs, commercial customers arrive and new businesses emerge. Space, he said, has reached only the second stage.

“The space economy today is in the second stage: defense orders are rising, and launch keeps getting cheaper,” he added. “Whether it reaches the third, where buyers other than the military pay, is still open.”

He pointed to semiconductors as an example of government support creating the conditions for a much larger commercial market. “Chips ran through all four in six years,” he said.

Concorde offered the cautionary example. Britain and France funded development, but the wider market never materialized, he added. “The rest of the loop never came. Only 20 were built,” Palihapitiya wrote.

For space, he said, the outcome hinges on whether defense spending opens the door to more customers or remains the industry’s main source of demand. “In our view, this is the question that decides the industry: is defense just the first customer for space, or the permanent one?” he said. “If it is the first, space follows chips.”

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