These Space ETFs Could 10x by 2030! (Better than SpaceX IPO)
Summary
Nolan critically analyzes the proposed $1.77 trillion IPO valuation for SpaceX, deeming it "insane" and highly overvalued. He illustrates this by pointing out that the valuation represents approximately 94 years of SpaceX's current annual revenue, contrasting it sharply with typical valuations of mature companies (2-10x revenue) and fast-growing tech firms (10-20x revenue). Nolan explicitly states that he will not participate in the IPO, citing the poor statistical performance of IPOs in the short to mid-term and concerns about heavy dilution and Elon Musk's concentrated control. He acknowledges that SpaceX could be a great company but reiterates that the valuation is the primary issue.
Despite his bearish stance on direct SpaceX investment, Nolan is optimistic about the emerging space sector as a whole, believing it will attract significant capital and foster new businesses. He recommends gaining exposure to this sector through diversified Exchange Traded Funds (ETFs) rather than directly buying SpaceX stock. He highlights three specific ETFs:
Nolan also mentions that investors might already have indirect exposure to SpaceX through existing holdings. He points out Google (Alphabet), which acquired a stake in SpaceX in 2015 and recently signed a substantial $30 billion AI computing contract with SpaceX. He also notes Fidelity Contrafund (FCNTX) as a significant mutual fund holder of SpaceX. He clarifies that he is not recommending buying these for SpaceX exposure alone, but rather informing viewers they might already be exposed, which could alleviate "FOMO" for a direct SpaceX purchase.
Mentioned Stocks
Reasoning: Nolan mentions Rocket Lab as a top holding within both the Tema Space Innovators ETF (NASA) and the ARK Space and Defense Innovation ETF (ARKX). For NASA, he notes it's among the 'bigger weights of the public space names.' For ARKX, which he finds 'most interesting,' he highlights its investment in companies providing 'picks and shovels' for the space economy, including 'launch services' which Rocket Lab provides. By recommending these ETFs, Nolan implicitly recommends companies like Rocket Lab as part of a diversified play on the broader space sector.
Reasoning: Nolan mentions Nvidia in the context of the XOVR ETF, stating that the fund holds 'big cap public tech you already know. Nvidia, Google, Meta, all meaningful possessions in the portfolio.' Additionally, he highlights that Google's new $30 billion contract with SpaceX is for accessing approximately 110,000 Nvidia GPUs and related computing infrastructure. While not a direct recommendation to buy or sell NVDA for SpaceX exposure, it indicates a positive implication for Nvidia from the large AI infrastructure deal, making it a valuable existing holding for those exposed to the tech sector. He also cites Nvidia as the 'largest company in the whole world at $5 trillion' for valuation comparison purposes.
Reasoning: Nolan mentions AMD as a top holding within the ARK Space and Defense Innovation ETF (ARKX), which he considers the 'most interesting' ETF for investing in the broader space and defense technology sector. He praises ARKX for investing in the 'picks and shovels behind the space economy,' including companies providing essential components like 'chips,' which AMD is a major producer of. By recommending ARKX, Nolan implicitly recommends AMD as part of a diversified strategy to capitalize on the growth of the space economy.
Reasoning: Nolan notes that Google (Alphabet) already has significant indirect exposure to SpaceX, having bought 5-6% of the company in 2015 for $900 million. More recently, Google signed a substantial $30 billion contract with SpaceX for AI computing capacity, running from October 2026 through June 2029, which will provide Google with access to 110,000 Nvidia GPUs. Nolan, as an existing Google stock owner, states this development "makes me more excited as a Google stock owner more than anything else." He clarifies that he is not recommending buying Google *for* the SpaceX exposure but rather informing viewers of their potential existing exposure, which might mitigate the desire to buy SpaceX directly.
Reasoning: Nolan argues that SpaceX's proposed IPO valuation of $1.77 trillion (approximately $135 a share) is "insane" and drastically overvalued, representing about 94 years of its current annual revenue of $18 billion. He contrasts this with typical valuations for mature companies (2-10x revenue) and fast-growing tech companies (10-20x revenue), highlighting that SpaceX is being valued at 90-100 times revenue. Nolan explicitly states, "I'm not taking any part in it. I'm not buying it straight into it," due to historical underperformance of IPOs, potential for heavy dilution, and governance concerns regarding Elon Musk's concentrated control. He believes finding a good company at a fair price is crucial, and SpaceX, despite being a potentially great company, is not offered at a fair valuation.
Reasoning: Nolan identifies XOVR (ER Shares Private Public Crossover ETF) as having the largest position in SpaceX (over 10%), making it the "cleanest direct pre-IPO SpaceX wrapper" for a regular brokerage account. He also notes its holdings in other major tech companies like Nvidia, Google, and Meta. However, he expresses a "pause" due to concerns about its expense ratio, citing a discrepancy between the stated 0.75% and a stock analysis showing 1.81%. He advises investors to verify the all-in number before buying. While acknowledging its past popularity for pre-IPO exposure, Nolan suggests it might not be the best option post-IPO due to SpaceX's eventual inclusion in other ETFs.
Reasoning: Nolan recommends the Tema Space Innovators ETF, ticker NASA, highlighting its recent launch (March 30th) and rapid growth to $2.6 billion in assets in just 37 trading days, making it the fastest-growing space thematic ETF in history. It is an active ETF with daily liquidity and holds a solid SpaceX position (under the 15% ETF cap) at an implied $1.51 trillion valuation. He notes its higher expense ratio of 0.87%. Nolan states it's suitable for investors who want SpaceX as part of their exposure but also desire a diversified range of public space names like Rocket Lab, MDA Space, AST Space Mobile, Planet Labs, and Echostar.
Reasoning: Nolan finds ARKX (ARK Space and Defense Innovation ETF) the "most interesting" of the recommended ETFs because it offers a broader investment in the entire space sector and related technological trends. He describes it as a bet on major technological shifts over the next 10-20 years, investing in space infrastructure, satellite communications, defense technology, robotics, AI hardware, and autonomous systems. Nolan particularly likes its "picks and shovels" approach, focusing on companies providing essential components and services (chips, sensors, software, launch services) for the industry. Top holdings include Rocket Lab, AMD, L3 Harris, Kratos Defense, and Teradyne. He acknowledges its volatility and 0.75% expense ratio but considers it a diversified way to participate in a potentially massive growth industry.
Reasoning: Nolan points out that Fidelity Contrafund (FCNTX) is one of the largest mutual fund holders of SpaceX in the country, with roughly 5.1% of the fund invested in the company. He mentions that investors who own Contrafund in their Fidelity 401k have been long SpaceX for years. However, he explicitly states, "I'm definitely not telling you to buy these for the SpaceX exposure. Honestly, they're such a small piece of what those are." His intention is to inform viewers that they might already have indirect exposure, not to recommend a purchase specifically for SpaceX's sake.