The SpaceX IPO is all over the news but I think it’s mostly overvalued hype. Personally, I’d rather focus on high-quality domestic stocks to buy until the dust settles.
So I identified three UK shares with moderate and less-risky exposure to artificial intelligence (AI) and space-related tech.
But first, let’s examine the SpaceX IPO in more detail.
What’s all the hype about?
Despite the name, SpaceX is no longer just about space exploration. The core part of its revenue is Starlink, the satellite internet service that generated $11.4bn in revenue in 2025.
The space exploration division is not yet profitable, posting an operating loss of $2.6bn in 2025 while investing heavily in next-generation rocket development.
Additionally, Elon Musk recently merged the business with xAI for AI development, which burnt through $2.5bn in Q1 of 2026 alone.
So unsurprisingly, the business isn’t profitable. It posted a net loss of nearly $4.9bn in 2025 despite holding the largest IPO in recorded history, valued at roughly 95 times trailing revenue.
That kind of hype makes me wary, so I’d rather see where the share price settles before considering it.
Three alternative UK tech stocks to consider
British investors with less of a risk appetite may want to consider one or more of the following:
| Stock | Why it fits | Main risk |
|---|---|---|
| RELX | Data-heavy analytics business using AI for over a decade. Some fund managers see it as a potential AI winner. | Rich valuation possible, AI disruption debate remains. |
| Filtronic | Designs RF/microwave/mmWave components for space. UK Space Agency funded; SpaceX partnership for Starlink. | Small-cap AIM stock, high valuation, volatility risk. |
| BAE Systems (LSE: BA.) | Defence/aerospace prime with space capabilities. AI-enabled Azalea satellites. | Defence spending and contract timing. |
Why BAE Systems stands out
BAE Systems is more than just the UK’s largest defence and aerospace company – it’s a global tech giant building advanced AI systems for land, sea, air, space, and cyber operations. It describes its strategy as ‘AI with purpose’ – using AI for mission critical goals, not just as a gimmick.
One of its key themes is decision advantage, a method of turning raw data into actionable intelligence faster. It also develops autonomous systems for unmanned platforms, edge AI processing data on sensors, and natural language processing for intelligence analysis.
For example, its Azalea satellite mission will use machine learning algorithms with on-board edge processors to deliver derived insight directly while still in orbit.
Long-story, short: BAE isn’t just jumping on the AI bandwagon. It’s embedding AI into defence systems targeting reliability, security, and measurable outcomes.
In many ways, it’s working on similar tech to SpaceX, just without the ramped up price tag.
But that doesn’t make it risk-free. Defence spending cycles and contract timing are key areas to watch, as its revenue depends on government budgets that can shift with political priorities.
At the same time, defence stocks aren’t everyone’s cup of tea, so RELX or Filtronic may be more appealing.
The bottom line
SpaceX could still rack up record prices, particularly if it’s added to the Nasdaq 100 later this month. It could see a potential inflow of $15bn-$30bn when added to index trackers.
But the price is likely to be volatile along the way.
If, like me, you’d rather wait to see how things unfold, consider one or more of the above three UK stocks to buy in the meantime.
Should you invest £5,000 in BAE Systems right now?
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Mark Hartley owns shares in RELX and BAE Systems.
