April 1 (Reuters) - Shares of aerospace companies jumped on Wednesday as investors bet that Elon Musk-owned SpaceX's confidential filing for an initial public offering would be a catalyst for the sector's next growth phase.
Musk's company confidentially filed for a U.S. IPO on Wednesday and is eyeing a potential valuation of more than $1.75 trillion, Reuters reported, citing a person familiar with the matter.
Shares of Rocket Labs and Planet Labs gained 5.8% and 9.6%, respectively, while Intuitive Machines added 10.5% and Howmet Aerospace climbed 3.4%.
Planet Labs has gained over 56% this year, while shares of Intuitive and Howmet rose 26% and 16.3%, respectively.
"It isn't unusual for the entire sector to rally because some investors will interpret the announcement of the IPO as very positive for that type of industry and the timing is also coincidental with the launch this evening of the U.S. space escapade," said Peter Andersen, founder of Andersen Capital Management.
NASA is set to launch four astronauts as soon as Wednesday evening on a 10-day flight around the moon.
Musk's electric-vehicle company Tesla added 2.6%, while satellite communications company EchoStar, which owns SpaceX shares, added 4.8%.
Exchange Traded Funds (ETFs) tracking the aerospace sector such as Ark Space & Defense Innovation and Procure Space also climbed 2.9% and 4.8%, respectively. Both the funds have more than doubled in value since 2023.
The listing comes when investor enthusiasm for the space sector has surged, driven by falling launch costs, expanding satellite networks and growing interest in data center infrastructure in orbit.
SpaceX's planned debut is set to generate massive interest among retail investors for the sector. Musk is mulling allocating as much as 30% of the company's shares to individual investors, Reuters reported.
(Reporting by Johann M Cherian, Akash Sriram and Shashwat Chauhan in Bengaluru; Editing by Sriraj Kalluvila and Devika Syamnath)
