Space Stocks Are Taking Off. Here's Why

• (1:20) - What Was The Significance of Artemis 2 For Investors?
• (7:00) - How Excited Should You Be For A SpaceX IPO?
• (12:45) - How Soon Can We Expect Data Centers In Space?
• (21:20) - Procure Space ETF: UFO
• (36:20) - Episode Roundup: SATS, RKLB, ARKX, MARS, NASA
• [email protected]

In this episode of ETF Spotlight, I speak with Micah Walter-Range about investing in the space economy and space stocks that have been very hot lately. Micah is a global space economy expert and former director of research at the Space Foundation. He developed the index that the Procure Space ETF UFO tracks, which is up 33% year-to-date.

Many space companies contributed to NASA’s awe-inspiring Artemis II mission and have seen their stocks soar as there is massive interest in the lunar economy. Will we see lunar mining and a “self-growing” city on the moon anytime soon?

SpaceX filed its IPO paperwork with the SEC recently. Bloomberg reported that the space company plans to raise as much as $75 billion in the offering for a target valuation of over $2 trillion. We discuss why there is so much excitement around the SpaceX IPO.

Founded in May 2002, SpaceX now holds a de facto monopoly on rocket launches, and its satellite internet division, Starlink, is reportedly a major cash generator. Like many high-profile startups, it has remained private as institutional investors continued to pour money into the firm.

Now, Musk’s ambition to build data centers in space is helping drive the company’s IPO plans. Orbital data centers would require hundreds of billions, if not trillions, of dollars.

Blue Origin, founded by Amazon’s AMZN Jeff Bezos, is pursuing similar orbital data center concepts, while Alphabet GOOGL is working on a space-based data center project, codenamed Suncatcher, with test launches expected in 2027.

The global space economy is expected to reach $1.8 trillion by 2034, up from $613 billion in 2024, according to McKinsey. We discuss factors driving the bull case for space investing and the biggest risks.

UFO, the first pure-play space ETF, primarily invests in companies that derive a majority of their revenues from space-related industries. Planet Labs PBC PL, Rocket Lab Corporation RKLB, EchoStar SATS, and Viasat VSAT are among its top holdings.

Tune in to the podcast to learn more.

Be sure to look out for the next edition of ETF Spotlight, and remember to subscribe!

If you have any comments or questions, please email [email protected]

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This article originally published on Zacks Investment Research (zacks.com).

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