Sam Altman and Elon Musk reignited their public feud over the weekend, trading barbs on X about artificial intelligence and SpaceX's plans to deploy orbital data centers. The timing matters because SpaceX's stock struggles are now rippling through the broader space investment ecosystem, including specialized funds that bet heavily on the company.

Why Is the Altman-Musk Feud Affecting Space Stock Investors?

SpaceX accounts for 17% of the Tema Space Innovators ETF (ticker: NASA), making it by far the fund's largest holding. The company's recent stock decline has pulled the entire fund toward its launch lows, even as the fund's managers quietly built new positions in other space companies. SpaceX debuted on the public markets at $150 per share but has since fallen to around $145, representing a 28% drop from its post-listing high of $200.

The weakness comes despite SpaceX's inclusion in the Nasdaq-100 index, which typically triggers buying from passive investment funds. Analysts suggest that much of the expected index-driven demand had already been priced in before the formal inclusion announcement. Broader technology sector weakness also weighed on shares, creating a challenging environment for space-focused investors.

What Are Space Investors Doing Instead?

While SpaceX stumbled, the Tema ETF's managers took a different approach. According to institutional ownership disclosures, Tema quietly added 5.73 million shares across three other space companies during the quarter ended June 30. This strategic rebalancing suggests fund managers are diversifying away from SpaceX's concentration risk while maintaining exposure to the broader space economy.

• Intuitive Machines (LUNR): Tema added 3.1 million shares worth about $66.4 million, backing the company after it secured a $148.3 million NASA contract to deliver a production-line-qualified Nova-C lunar lander by 2028 and became prime contractor for NASA's Lunar Reconnaissance Orbiter Camera program.
• Rocket Lab (RKLB): Tema added 1.62 million shares worth nearly $164.9 million, the largest position by market value among the three new purchases, as the company builds a broader space platform spanning launches, spacecraft manufacturing, and satellite services.
• AST SpaceMobile (ASTS): Tema added just over 1 million shares worth $89.2 million as the company prepares its next satellite deployment to expand its direct-to-device broadband network that can deliver voice, data, and video services to standard smartphones.

Intuitive Machines has been particularly active in securing government contracts. Beyond the lunar lander deal, the company became prime contractor for South Korea's ShadowCam program in May, expanding its role in lunar mapping, navigation, and mission operations. These wins appear to have caught the attention of fund managers seeking stable, contract-backed revenue streams.

Rocket Lab is pursuing an aggressive growth strategy that extends beyond traditional launch services. The company's recent $8 billion acquisition of Iridium Communications would add recurring connectivity revenue, while its Victus Haze mission for the U.S. Space Force demonstrated rapid-launch capability, achieving liftoff just 16 hours and 42 minutes after receiving notice. This combination of launch speed and satellite connectivity positions the company as a diversified space infrastructure player.

AST SpaceMobile is preparing for significant growth in its satellite constellation. The company's next-generation BlueBird satellites are expected to offer nearly twice the peak download speeds of its first operational satellites. BlueBirds 12 and 13 are expected to arrive at Cape Canaveral ahead of a Falcon 9 launch planned for the first half of August.

How to Evaluate Space Stock Performance During Market Volatility

• Monitor Contract Awards: Track government and commercial contracts as leading indicators of revenue growth, since space companies often announce major deals before they generate significant earnings.
• Watch Sentiment Indicators: Check retail trader sentiment on platforms like Stocktwits to understand whether institutional weakness is being followed by retail selling or contrarian buying interest.
• Compare Year-Over-Year Performance: Evaluate individual stocks against their 12-month performance to distinguish between temporary weakness and fundamental deterioration in the business.

Retail trader sentiment on Stocktwits reflects the broader market uncertainty. Sentiment for SpaceX, Rocket Lab, Intuitive Machines, and AST SpaceMobile was bearish across the board, with message volume extremely low for SpaceX and low for Rocket Lab and AST SpaceMobile. However, year-over-year performance tells a different story: Rocket Lab surged 107%, AST SpaceMobile gained 67%, and Intuitive Machines climbed 44% over the past year.

The Tema Space Innovators ETF, which launched in March, now oversees roughly $1.31 billion across 38 holdings spanning launch providers, satellite operators, communications infrastructure, and a few private space companies. The fund's rebalancing away from SpaceX concentration suggests that professional managers are taking a longer-term view of the space economy, even as short-term stock weakness creates headlines and tests investor patience.