Space rockets, satellites, data centers and Grok: What's the right S&P sector index for SpaceX?

SpaceX is on the verge of going where no initial public offering has ever gone before.

The company, created and led by Elon Musk, is targeting a stratospheric valuation of $1.75 trillion on the Nasdaq Stock Market. SpaceX may be fast-tracked into broadly held indexes like the Nasdaq 100 and S&P 500 at light speed.

As market watchers and investors prepare and strategize the best ways to play the IPO, one way to get involved will be to buy the S&P Sector and Industry Indexes where SpaceX will eventually reside.

When a company goes public, as SpaceX is likely to do in the coming weeks, two financial data companies, S&P Global and MSCI, determine which sector and industry indexes are the right fit. Because SpaceX is involved in so many areas of the economy - everything from space rockets, to satellite internet, to data centers and artificial intelligence agent Grok, to name a few - placement may be more complicated in this case.

First a newly listed company is put into one of the 163 "sub-industries." From there, it's whittled down to one of 74 "industries," and then again to one of 25 "industry groups" before being assigned to one of the 11 S&P Sectors. Those sectors include information technology, communications, industrials, real estate, materials, health care, consumer staples, consumer discretionary, financials, utilities, or energy.

MSCI and S&P look at four tiers when deciding on sector placement.

The first thing MSCI and S&P consider is which parts of a company create the most revenue. SpaceX's S1 filing released last week says, "Our Space and Connectivity segments contributed the substantial majority of our consolidated revenue in the three months ended March 31, 2026 and the year ended December 31, 2025, demonstrating the benefits of their scale and operating leverage in our vertically integrated business model."

The "space" part of the equation is the rocket launches and space missions. SpaceX's filing says, "We generate Space revenue primarily through launch and mission services of Falcon 9, Falcon Heavy, and Dragon provided to commercial and government customers."

When SpaceX talks about connectivity, it means Starlink, which supplies customers with high-speed internet service all over the world. That part of the business brought in more than $11 billion in revenue in 2025.

The space business was responsible for about $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 brought in $3.2 billion in 2025. xAI also derives revenue from data centers in Memphis, Tennessee, and Southaven, Mississippi.

Representatives for MSCI and S&P say that while revenue is a key driver in judging which sector a company will ultimately fall, "Earnings and market perception, however, are also recognized as important and relevant information for classification purposes, and are taken into account during the annual review process."

Based on revenue from Starlink, SpaceX is likely destined for the S&P Communication Services Sector which currently includes companies like Alphabet, Meta, Netflix, and Echostar — a company that owns between 2% and 3% of SpaceX. AT&T, Verizon, Netflix, Charter Communications, and Walt Disney are also members of the Communication Services Sector.

SpaceX could also be a candidate at some point for the industrials sector, which houses space and defense companies including Howmet, Boeing, GE Aerospace, Northrop Grumman, L3, and General Dynamics.

While SpaceX includes some earth-based data centers, at the U.S.-Saudi Investment Forum in November 2025, Musk made it clear the future of that part of the business is in space.

"If you want to have something that is producing a million times more energy than earth can possibly produce you must go into space, that's where it is kind of handy to have a space company," he said. "Even in the four- or five-year time frame the lowest cost way to do AI compute will be with solar powered AI satellites."

While most terrestrial data center companies are in the S&P Real Estate Sector, a space-based competitor such as the one Musk envisions may be classified differently as it wouldn't be taking up land.

In the S1 filing released last week, SpaceX made the case it is also a data center company: "We believe SpaceX is uniquely positioned to deploy and operate data centers in orbit that can eventually achieve a lower cost than terrestrial data centers over time due to our extreme vertically integrated approach across launch, satellite manufacturing at scale, network connectivity, and terrestrial data center expertise."

Right now the S&P Real Estate Sector is home to three major data center-focused companies including Equinix, Digital Realty Trust, and Iron Mountain. All three stocks are up significantly so far in 2026.