How to Play SpaceX Without Buying the IPO

Key Takeaways

• Linde is SpaceX’s main industrial gas partner and supplier of liquid oxygen, which is used as a rocket propellant.
• We forecast Linde’s space revenue will increase sevenfold over the next five years, boosting the firm’s annualized revenue growth profile by around 100 basis points.
• Revenue growth from space is more uncertain than Linde’s other revenue streams.

The SpaceX SPCX IPO has put a spotlight on the rocket launch supply chain, sparking investor interest in companies with exposure to the commercial space boom. We see industrial gas firms as a low-risk play in the commercial space race. Although we estimate that the space end market currently accounts for only a low-single-digit percentage of revenue for the three industrial gas firms we cover, we expect it to become a meaningful driver of revenue growth, particularly for Linde LIN, the world’s largest industrial gas producer.

We Expect Linde to Capitalize on SpaceX’s Accelerating Launch Cadence

Linde is the primary industrial gas supplier to SpaceX, which conducts the majority of commercial space launches. Furthermore, the firm has invested in additional capacity to support SpaceX’s launches in Texas and Florida. We believe Linde is poised to capitalize on SpaceX’s ambitious launch cadence plans, as well as its transition from Falcon 9 and Falcon Heavy rockets to more propellant-intensive Starship megarockets.

SpaceX’s IPO as a Major Catalyst for the Space Supply Chain

Industrial gas firms have supplied the space end market for decades. Air Products and Chemicals APD has worked with NASA since 1957, supplying liquid hydrogen and other industrial gases for the Apollo, Space Shuttle, and Orion missions. Linde has supplied liquid oxygen to the Kennedy Space Center since the Apollo program. Nonetheless, the space end market has been a relatively small and largely overlooked part of industrial gas firms’ portfolios.

We expect the SpaceX IPO to change this, putting a major spotlight on the rocket launch supply chain. Although none of the three industrial gas firms we cover (Air Liquide AIQUY, Air Products, and Linde) explicitly disclose their exposure here, we estimate that the space end market currently accounts for a low-single-digit percentage of revenue for all three firms, with Linde the largest player in absolute dollar terms.

All three of these firms play important roles in SpaceX, NASA, and other launches. Linde is currently SpaceX’s main partner, serving as the primary supplier of liquid oxygen and liquid nitrogen, as well as other industrial gases, for the launch complexes in Florida and Texas. Air Products is an important helium supplier, and Air Liquide acts as a supplemental supplier.

Industrial gas firms have been expanding their capacity to support increasing launch activity at SpaceX’s launch sites in Starbase, Texas, as well as the Kennedy Space Center and Cape Canaveral Space Force Base in Florida. Linde is expanding its industrial gas facility in Mims, Florida, with additional capacity starting up in the first quarter of 2027, following two previous expansions in 2020 and 2024.

In the first quarter of 2026, Linde also started a new air separation unit in Brownsville, Texas, which will provide liquid oxygen and liquid nitrogen for SpaceX’s Starship launches from the Starbase facility. Air Products announced a new ASU in Cocoa, Florida, that will produce liquid oxygen, nitrogen, and argon for space launch providers, including SpaceX. Management expects Cocoa ASU to come on-stream in the second half of 2028.

We forecast that an increasing number of total launches, combined with a growing share of Starship megarocket launches, will drive tremendous growth in overall demand for propellants such as liquid oxygen and liquid methane. Linde does not supply RP-1 or liquid methane, so we expect liquid oxygen to be its primary driver of revenue growth.

The Market Underappreciates Linde Stock’s Upside From SpaceX

Linde management recently said the company currently supports around 70% of all SpaceX launches. Although we expect Linde’s market share to gradually decline in the long run, we think it is by far the best-positioned firm to capitalize on the commercial space boom.

We believe the market underappreciates the upside potential of SpaceX’s rapidly increasing launch cadence. While we estimate the space market currently accounts for only about 1% of Linde’s revenue, we forecast it could grow to about 8% by 2040.

Linde is rarely cheap, but the stock is currently trading roughly 6% below our fair value estimate, which we consider an attractive entry point for a wide-moat industrial gas firm with a resilient business model, which we also consider a low-risk play in the commercial space race.

This article was compiled by Irza Waraich.