The SpaceX IPO and its ripple effects across the ETF landscape were front and center on this week’s ETF Prime. Host Nate Geraci welcomed Zeno Mercer, head of robotics and AI research at VettaFi, and Paul Baiocchi, head of fund sales and strategy at SS&C ALPS Advisors.
Key Takeaways:
- SpaceX IPO’d at $135, surged 50%, and now trades near $155 at a roughly $2 trillion valuation.
- Mercer warned that MANGOS ETFs exclude key players like Amazon and carry concentrated valuation risk.
- Baiocchi flagged S&P 500 concentration risk and spotlighted EQL as a defensive counterweight.
SpaceX IPO’d at $135 per share, popped roughly 50%, and now trades near $155 at a $2 trillion valuation. Mercer noted that Musk’s target of $1 trillion in annual SpaceX revenue by 2030 represents a 53-fold jump in five years and faces real competition, including a satellite venture between Delta and Amazon.
See more: SpaceX Takes Center Stage in HALX June Rebalance
On the wave of newly filed MANGOS ETFs, covering Meta, Anthropic, Nvidia, Google, OpenAI, and SpaceX, Mercer said that the basket captures much of the AI value chain but omits key players and carries concentrated valuation risk.
He also argued that the physical AI opportunity is underappreciated, pointing to mobile warehouse robots, drones, and global system integrators as overlooked beneficiaries. On the other side of that trade, he noted that the iShares Expanded Tech Software Sector ETF (IGV) is down 17% this year as AI advancement pressures legacy software as a service platforms.
Concentration Risk and Real-Asset Beneficiaries
Baiocchi said the SpaceX IPO frenzy mirrors the dot-com era, noting an unprecedented wave of client calls requesting SpaceX allocations. He also flagged index concentration risk, with three tech-heavy sectors now accounting for more than 50% of the S&P 500.
To address that imbalance, he spotlighted the ALPS Equal Sector Weight ETF (EQL), which equally weights the S&P 500’s 11 Global Industry Classification Standard sectors and recently converted from a fund-of-funds to direct stock replication, lowering costs.
He also highlighted the ALPS Electrification Infrastructure ETF (ELFY) as a play on AI’s power demand, pointing to a Microsoft and Chevron data center power deal as recent evidence of the theme.
The Iran conflict, he added, has spotlighted North American midstream infrastructure, benefiting both the Alerian MLP ETF (AMLP) and the Alerian Energy Infrastructure ETF (ENFR).
For more ETF Prime podcast episodes, visit our ETF Prime Content Hub.
VettaFi LLC (“VettaFi”) is the index provider for AMLP, EQL, ELFY and ENFR, for which it receives an index licensing fee. However, AMLP, EQL, ELFY and ENFR are not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of AMLP, EQL, ELFY and ENFR.
