Elon Musk’s SpaceX has taken the next step toward a landmark IPO by confidentially filing with the SEC, setting the stage for a potentially record-setting public offering, as reported by Bloomberg and later quoted on CNBC. By filing confidentially, companies can have their financials reviewed by the SEC before revealing them to the public or investors.
With plans to raise around $75 billion, SpaceX’s IPO could surpass the size of any U.S. offering in history by more than threefold, valuing the company at $1.75 trillion. According to Reuters, with the mammoth valuation, Musk’s devoted retail following and a stake in a high-growth sector, SpaceX checks all the boxes to deliver the much-needed boost to the IPO market.
According to suggestions by analysts, as quoted on the abovementioned Reuters article, a strong SpaceX debut could pave the way for large, delayed listings, especially in capital-heavy industries that have long struggled to draw public market investors.
However, the big question is whether investors are willing to take on risk given geopolitical tensions and the expected economic challenges from the Middle East conflict.
Optimism But with a Pinch of Caution
With markets beginning to price in cautious optimism around a potential de-escalation in the Middle East, investors may consider selectively increasing their risk exposure to capture upside opportunities. Despite improving sentiment around geopolitical tensions, a measured approach remains prudent.
Market sentiment around SpaceX’s IPO is clearly bullish and improving sentiment on de-escalation news could lift investor risk appetite, providing an added tailwind for the broader IPO market. According to LSEG data, as quoted on Reuters, U.S. IPOs have already raised more than $23 billion this year, up 91% year over year, highlighting robust institutional demand and the ability of deep capital markets to absorb large deals despite geopolitical headwinds.
President Trump’s remarks that the Middle East conflict may be winding down are a positive signal for markets, with investors adopting a stance of cautious optimism. Yet, with no definitive timeline for a resolution in Iran, uncertainty persists, keeping volatility high and investors on edge.
Big IPOs Could Ignite a Market Frenzy
One of the most compelling themes to watch this year is the lineup of companies preparing to enter the public markets. According to a Reuters article, Wall Street is increasingly optimistic that 2026 could mark a turning point for the U.S. IPO market, supported by a strong lineup of prominent private firms and deferred listing demand.
Elon Musk-led SpaceX, Anthropic and ChatGPT maker OpenAI are gearing up for potential public listings this year, which could help define the scale and tone of the next IPO cycle. Earlier this year, Goldman Sachs projected that U.S. IPO proceeds could surge to a record $160 billion in 2026, if marquee companies go public, as per the abovementioned Reuters article.
High-profile listings like these tend to drive market enthusiasm, attracting investors and motivating other firms to go public, potentially making 2026 a landmark year for IPOs.
ETFs to Ride the IPO Momentum
Increasing exposure to IPO-focused ETFs may offer an opportunity for investors, as the outlook for the IPO market in 2026 looks constructive. However, lingering geopolitical volatility, which could dampen investor confidence and curb risk appetite, along with expectations of oil-driven inflation, remain key headwinds.
Below, we have highlighted a few funds that investors can consider to gain increased exposure to the IPO market.
Investors can consider First Trust U.S. Equity Opportunities ETF FPX, Renaissance IPO ETF IPO, First Trust International Equity Opportunities ETF FPXI and Renaissance International IPO ETF IPOS.
With a one-month average trading volume of 26,000 shares, FPX is the most liquid option, ideal for active trading strategies. However, to fully benefit from the sector’s growth trajectory, a long-term investment approach is recommended.
FPX has gathered an asset base of $1.11 billion, the largest among the other options. Regarding annual fees, IPO is the cheapest option, charging 0.60%, which makes it more suitable for long-term investing.
Combine IPO-Focused ETFs & Space ETFs to Ride the SpaceX Buzz
Allocating to IPO-focused ETFs alongside space-themed ETFs could position portfolios to benefit from a potential public listing of SpaceX and its spillover effects on the space sector, while also maintaining diversified exposure across high-growth sectors and managing concentration risk effectively.
Investors can consider Procure Space ETF UFO and ARK Space & Defense Innovation ETF ARKX.
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First Trust International Equity Opportunities ETF (FPXI): ETF Research Reports
Renaissance IPO ETF (IPO): ETF Research Reports
Renaissance International IPO ETF (IPOS): ETF Research Reports
First Trust US Equity Opportunities ETF (FPX): ETF Research Reports
Procure Space ETF (UFO): ETF Research Reports
ARK Space & Defense Innovation ETF (ARKX): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
