What’s the right S&P sector for SpaceX?

SpaceX is on the verge of going where no IPO has gone before.

The company, created and led by Elon Musk, is aiming for a stratospheric valuation of $1.75 trillion on the Nasdaq Stock Exchange. SpaceX could be quickly incorporated into widely held indices like the Nasdaq 100 and S&P 500 at lightning speed.

As market watchers and investors prepare and strategize the best ways to bet on the IPO, one way to get involved is to buy the S&P Sector and Industry Indices, where SpaceX will eventually be featured.

When a company goes public, as SpaceX likely will in the coming weeks, two financial data firms S&P Global and MSCI determine which sectors and sector indices are the right choice. Deployment in this case may be more complex, as SpaceX is involved in many areas of the economy (everything from space rockets to satellite internet to data centers to AI agent Grok).

Here’s how it works.

First, a newly listed company is included in one of 163 “sub-sectors”. From there, it’s whittled down to one of 74 “sectors” and then again to one of 25 “industry groups” before being assigned to one of 11 S&P Sectors. These sectors include information technology, communications, industrial, real estate, materials, healthcare, consumer staples, consumer discretionary, finance, utilities or energy.

MSCI and S&P examine four stages when deciding on sector placement.

The first thing MSCI and S&P consider is which parts of a company generate the most revenue. “Our Space and Connectivity segments contributed the significant majority of our consolidated revenue for the three months ended March 31, 2026 and the year ended December 31, 2025, demonstrating the advantages of their scale and operating leverage in our vertically integrated business model,” SpaceX said in an S1 filing published last week.

The “space” part of the equation is rocket launches and space missions. “We generate space revenue primarily through launch and mission services provided to commercial and government customers of the Falcon 9, Falcon Heavy and Dragon,” SpaceX’s application states.

When SpaceX connection is mentioned, Starlink, which offers high-speed internet service to its customers all over the world, comes to mind. This part of the business brought in more than $11 billion in revenue by 2025.

Its space business was responsible for nearly $4 billion in revenue last year. Another part of SpaceX’s business is xAI, which includes Musk’s artificial intelligence platform known as Grok. The S1 filing shows the AI ​​business generating $3.2 billion in revenue in 2025. xAI also generates revenue from data centers in Memphis, Tennessee and Southaven, Mississippi.

MSCI and S&P representatives say revenue is an important factor in determining which sector a company will ultimately fall into, but earnings and market perception are also considered important and relevant information for classification purposes and are taken into account in the annual review process.

Looking at revenue from Starlink, SpaceX is likely to trend towards the S&P Communications Services Sector, which currently includes companies such as: Alphabet, Meta, netflixAnd echo star — A company that owns 2% to 3% of SpaceX. AT&T, Verizon, netflix, Charter CommunicationsAnd Walt Disney they are also members of the Communications Services Sector.

SpaceX may also be a candidate at some point for the industrial sector, which includes space and defense companies. howmet, Boeing’s, GE Aviation, Northrop Grumman, L3And General Dynamic.

Although SpaceX has some earth-based data centers, Musk made clear at the US-Saudi Investment Forum in November 2025 that the future of this part of the business is in space.

“If you want to have something that produces a million times more energy than the Earth can produce, you have to go to space, that’s where having a space company comes in handy,” he said. “Even in the four- or five-year time frame, the lowest-cost way to do AI computing will be solar-powered AI satellites.”

While most terrestrial data center companies are in the S&P Real Estate Sector, a space-based competitor, as Musk envisions, could be classified differently because it would not take land.

In its S1 filing published last week, SpaceX also revealed that it is a data center company: “We believe SpaceX is uniquely positioned to deploy and operate data centers in orbit that can achieve a lower cost than terrestrial data centers over time, thanks to our hyper-vertically integrated approach to launch, satellite manufacturing at scale, networking, and terrestrial data center expertise.”

Currently, the S&P Real Estate Sector is home to three major data center-focused companies: Equinox, Digital Real Estate TrustAnd Iron Mountain. All three stocks are up significantly so far in 2026.