Last week, a social media post from Elon Musk caused many people to stop in their tracks. The Tesla (TSLA) CEO had taken his conflict with President Donald Trump in a direction that seemed shocking, even for him.
In the now-deleted post, Musk accused Trump of having ties to Jeffrey Epstein. He went on to argue that without him, the President would not have won the 2024 election, and posted a poll to X about the idea of starting a third party to challenge both Democrats and Republicans.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
Trump responded by threatening Musk with consequences, such as the termination of millions of dollars worth of federal contracts awarded to SpaceX. This stands to severely compromise the future of Musk’s space exploration company at a highly pivotal time.
While the future of SpaceX hangs in the balance, though, most space stocks are benefiting from the tensions between Trump and Musk.
Elon Musk’s SpaceX may be in trouble as President Donald Trump threatens to terminate its federal contracts.
Image source: Terence Lewis/Icon Sportswire via Getty Images
As Musk and Trump trade blows, space stocks surge
Prior to Musk and Trump’s public fallout, experts speculated that their close relationship would be highly beneficial to SpaceX. Musk’s close proximity to Trump stood to help the company secure the federal funding it needed to establish itself as the market’s space exploration leader.
Related: Elon Musk, SpaceX have an exploding rocket ship problem
Now Musk’s company is caught in the crossfire of a vicious battle between two powerful men who aren’t known for backing down.
Trump has made it clear he is willing to attack Musk, regardless of the consequences it may pose for the U.S.’s space program, stating in a recent Truth Social post that “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts.”
While the battle between the two drags on, though, many space stocks are rising steadily, enjoying the momentum from the uncertainty surrounding SpaceX. Fellow space exploration company Virgin Galactic Holdings (SPCE) , typically seen as a close rival to SpaceX, is up more than 16% for the past week, even after some volatility.
Space tech startup Rocket Lab USA (RKLB) has caught the attention of many investors over the past year, with gains of almost 600% since January 2024. It has recently picked up even more momentum, though, rising 15% on negative SpaceX speculation.
Satellite designer AST SpaceMobile (ASTS) , once dismissed as a meme stock, has surged almost 50% over the past five days, although reports indicate that this could be due to speculation that Amazon founder Jeff Bezos has taken a position in the company.
The list of space stocks that have risen recently also includes Intuitive Machines (LUNR) , a company that has benefited significantly from procuring larger space contracts over the past few months.
More SpaceX News:
Elon Musk’s SpaceX plans raise major red flags for regulatorsElon Musk gets more bad news from a new rivalElon Musk makes unexpected promise after major tech meltdown
While these space stocks have risen recently, a prominent tech company with strong ties to Musk moved in the other direction.
Palantir Technologies (PLTR) , a multi-facted defense contractor, has surged throughout 2025, benefiting from chairman Peter Thiel’s close ties to Musk. Last week, it saw shares dip as the CEO’s relationship with President Trump took a sharp turn.
Will SpaceX’s rivals continue trending upward?
The fact that many space stocks are rising on negative SpaceX speculation serves as a reminder of the zero-sum nature of financial markets. When bad news that is highly specific to one company breaks, it often serves to elevate its rivals, as investors see an opportunity for others to gain.
Related: Veteran analyst revamps Rocket Lab stock price target
“The very idea of seeing SpaceX do less federal business is why Rocket Lab USA is up more than 4% overnight,” states Wall Street veteran Stephen Guilfoyle, an experienced trader who has long been bullish on the company, though he recently took some profits.
Guilfoyle recently highlighted that Rocket Lab is acquiring space payload solutions company Geost for $275 million, saying, “The deal is expected to close later this year and likely cements Rocket Lab’s place as a new player in the end-to-end national security space solutions provider.”
A fast-growing company, Rocket Lab might have risen even without the SpaceX catalyst. But now that the privately held space venture is facing a highly uncertain future, RKLB and its fellow space stocks could be in an excellent position to keep rising, at least while Wall Street waits for Musk and Trump to reach a compromise.
Related: Billionaire fund manager, skeptical of AI, backs shocking stock
