Key Points
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SpaceX’s stock will command a higher valuation if interest rates decline.
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Lower interest rates should boost Rivian’s sales of R2 SUVs.
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Joby’s stock could soar once the FAA certifies its first commercial flights.
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The Federal Reserve raised its benchmark interest rates by 25 basis points to 3.75%-4.00% in September, marking its first rate hike in three years. That decision drove issuers of bonds, CDs, and other fixed-income investments to raise their yields to stay competitive.
That pressure drove many investors to sell their speculative stocks and buy higher-yielding, fixed-income investments. It also compressed the forward valuations for those growth stocks and cast a harsh light on their steep losses and high debt levels.
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However, the Democratic takeover of Congress in the midterms could pressure the Trump Administration to end the Iran war. If that happens, oil prices will decline, inflation should cool off, and the Fed can finally cut interest rates again.
Those lower rates could drive investors back to some of the higher-growth industrial stocks that pulled back in recent months. To profit from that rotation, you should take a closer look at SpaceX (NASDAQ:SPCX), Rivian (NASDAQ:RIVN), and Joby Aviation (NYSE:JOBY).
SpaceX
SpaceX is growing like a weed, but its stock barely trades above its IPO price of $135. Its revenue nearly doubled year over year in the first nine months of 2026, and analysts anticipate 162% growth for the full year. They also expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to surge 271% as it turns profitable again.
SpaceX generates nearly half of its revenue and all of its profits from Starlink. Those profits support the expansion of its unprofitable — but rapidly growing — AI and space businesses.
Elon Musk claims SpaceX can grow its revenue to $1 trillion by 2030 by expanding Starlink, launching more Starship rockets, and strengthening its AI business through additional infrastructure deals. That would represent an 113% CAGR from its projected 2026 revenue.
SpaceX’s stock might seem expensive at 39 times this year’s sales, but it trades at just 11 times next year’s sales and six times its projected 2028 sales. Lower interest rates should boost those valuations again, making it an appealing growth stock for long-term investors.
Rivian
Rivian was once a red-hot EV stock, but it now trades more than 80% below its $78 IPO price. It’s also valued at less than two times next year’s sales.
Rivian’s stock slumped because its annual vehicle production dropped in 2024 and 2025 amid supply chain constraints, rising costs, and intense competition. But this year, it expects its annual deliveries to jump to 67,000-70,000 vehicles — up from 42,247 vehicles in 2025.
That acceleration will be driven by its new SUV, the R2, which arrived this June and costs less than its R1T pickup and R1S SUV. That lower price tag expanded its addressable market and widened its moat. It can also sell the R2 at higher margins than the R1 because it uses fewer electronic control units, simpler wiring, upgraded batteries, and larger castings.
From 2025 to 2028, analysts expect Rivian’s revenue to grow at a 42% CAGR. If it meets those estimates by ramping up its production of the R2, it could be revalued as a high-growth EV stock again. Lower interest rates could spur even more new EV purchases.
Joby Aviation
Joby, an early mover in the electric vertical take-off and landing (eVTOL) aircraft market, has lost nearly 50% of its value since it went public five years ago. Its stock stumbled because the FAA hasn’t yet certified its first commercial flights, and it’s still racking up steep losses.
However, Joby remains ahead of its closest competitors in the FAA’s multi-stage certification process, and its S4 eVTOLs can also fly faster and farther on a single charge than similar eVTOLs. Its top backers still include Toyota (NYSE:TM), which plans to mass-produce the S4; Delta Air Lines (NYSE:DAL), which will use the S4 for add-on “airport-to-home” flights; and Uber (NASDAQ:UBER), which is integrating its short-range flights into its Uber Air service.
From 2025 to 2028, analysts expect Joby’s revenue to surge from $53 million to $401 million as the FAA certifies its first flights and it expands as a vertically integrated “transportation as a service” provider. If it can achieve those goals — which will be easier if interest rates decline — its stock still looks reasonably valued at 15 times its 2028 sales.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Space Exploration Technologies. The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.
