The space economy: how to invest in space and SpaceX
The space economy is expanding thanks to falling costs and increased private participation. How can you invest in space?
Space is coming closer to home, playing an ever-increasing role in our lives. And like the universe itself, the investment opportunities are expanding rapidly.
Space consultancy firm Novaspace estimated the size of the space economy at $626 billion, in 2025, with $236 billion accounted for by the space market and $329 billion by space-enabled applications.
While the space races of the mid-late 20th century were primarily driven by government spending, this time it’s different. Private companies now provide around 70% of the capital for space exploration, meaning that investors have unprecedented access to the growing space economy.
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Why is all this money being spent on space? What’s the payoff for sending all these payloads into orbit?
The future of the space economy
The recent Artemis moon flight underscored the fact that moon landings are now the focus of attention once again. NASA is up front about the fact that putting astronauts back on the moon’s surface in the 2020s will provide the experience and technology to conduct the first human missions to Mars.
Professional services firm PwC estimated in January that the Lunar economy could be worth $127 billion by 2050. NASA, meanwhile, estimates that ‘Moon to Mars’ programs could create 69,000 jobs and support over $14 billion in total economic output.
Estimates suggest that the Lunar economy could be worth $127 billion by 2050.
There is all sorts of economic activity that can take place in space itself, and the potential of these is only just starting to be explored. These include mining asteroids for key resources, running data centres in space, or constructing research labs that take advantage of zero-gravity and other unique conditions in space.
Activities like these are “technologically nascent”, says Evelyn Chow, portfolio manager of the Neuberger Berman Next Generation Space Economy Fund, “so the ability to commercialise it is still some time away”. Orbital data centres, for example, would still be prohibitively expensive to launch, even if the solar power and semiconductor hardware going into them could withstand the level of radiation they would be exposed to in space.
“Based on estimates that we’ve run, it costs something like 8-10 times more per megawatt to do orbital data centre power versus even gas turbine power today,” said Chow.
But this could change in future.
“If you go back to the 50s and 60s, the first Apollo missions, it cost around $400,000/kg to launch something into space,” says Chow.
One of the key innovations has been reusable rockets. It’s an obvious point, but if you use a rocket twice rather than once, you double the return you make on building it in the first place (besides, of course, any extra costs you incur in re-using it).
There are tens of thousands of satellites orbiting the earth, as well as the International Space Station.
Analysis from ETF issuer ARK Invest shows that launch costs have fallen from approximately $15,600/kg to less than $1,000/kg in the 17 years since 2008.
Analysis from Google suggests launch costs could fall to $200/kg by the mid-2030s. At this level, the costs of running data centres in space would be comparable to the energy costs of AI on earth.
Satellites themselves have also become much cheaper. Low-earth-orbit (LEO) satellites tend to be smaller and cheaper to launch than other types, and smaller satellites are increasingly dominant in our skies. That is driving an increase in the total number of satellites that can be launched: according to Chow, there are now approximately 15,000 satellites in orbit and some experts think that could rise to around 100,000 by 2030.
SpaceX: IPO and beyond
One of the major driving forces behind many of these costs coming down has been Elon Musk’s Space Exploration Technologies (SpaceX).
Its reusable rocket, Falcon 9, has brought the incremental costs of launch down to around $1,500/kg, and according to Chow its upcoming Starship model could halve this cost.
SpaceX dominates the launch industry. According to the US Federal Aviation Administration, of 199 licensed space launches last year, SpaceX launched 161 – giving it more than 80% of the total market share.
A SpaceX Falcon 9 rocket lifts off from pad 40 at the Cape Canaveral Space Force Station
As well as monetising these launch services, SpaceX also has a network of over 9,000 satellites comprising its Starlink network which provides internet connectivity across the face of the earth. Starlink is thought to generate 50-80% of SpaceX’s revenue.
Interestingly, SpaceX also owns xAI, which develops the chatbot Grok and the social media network X (formerly Twitter). So there is an artificial intelligence (AI) angle on SpaceX too.
“Running AI requires immense power for storage and processing, and Musk reckons the only way to scale up is to tap into solar power from space,” said Dan Coatsworth, head of markets at AJ Bell. “SpaceX plans to use its satellite network to operate as orbital data centres, while at the same time Musk wants xAI to become a leading AI provider. Therefore, parking the two companies together means SpaceX can power AI in multiple ways.”
At present, SpaceX is a private company, so most investors can’t buy its shares directly – though there are various ways you can get exposure, which we’ll get into shortly.
It isn’t going to be private for long, though. SpaceX is reportedly filing for an IPO that could make it one of the world’s most valuable companies – reports indicate that it is targeting a valuation of $1.75 trillion.
Once SpaceX goes public, you’ll be able to buy its shares like any other.
When will SpaceX’s IPO take place?
SpaceX’s IPO isn’t yet finalised but the latest reports suggest that it will take place in June 2026.
How much will SpaceX be worth when it IPOs?
The latest reports suggest that SpaceX could achieve a valuation of $1.75 trillion when it IPOs.
If that transpires, it would immediately make SpaceX one of the world’s most valuable companies. If SpaceX listed with a $1.75 trillion valuation today it would comfortably make the top ten list (though, ironically, it would push Musk’s company Tesla out of this list).
How to invest in SpaceX before its IPO
In the meantime, there are ways you can gain exposure to SpaceX. It is held by a number of funds and investment trusts.
Scottish Mortgage (LON:SMT), for example, has 19% of its portfolio invested in SpaceX – making it the largest holding.
While this isn’t exactly the same as investing in SpaceX, since less than 20p in every pound you put in will be held in SpaceX shares, it is a good way to get some exposure, putting you in a position to profit should the IPO reach or exceed expectations.
Should you invest in SpaceX’s IPO?
There is a caveat over SpaceX’s potential $1.75 trillion listing. While private companies don’t have to disclose financial details in the way that public companies do, KeyBanc analysts estimate that SpaceX made $21 billion in revenue last year. The rumoured IPO valuation is over 83 times that amount. That’s a lot – as of 23 April, Tesla trades at around 14 times sales, and Nvidia trades at around 23 times.
“Bulls might argue that SpaceX’s earnings growth potential is so great that valuing it using 2027 or 2028 forecast earnings might make the equity rating look less outrageous,” said Coatsworth. “Bears could respond by saying that SpaceX is too immature or too high-risk a business to warrant a sky-high valuation.”
So before you join the rush of investors looking to buy SpaceX during its IPO, it is worth considering the risks involved should it fail to live up to its stratospheric valuation in the long run.
How to invest in space
SpaceX competitors and space pure-plays
There are other alternatives to SpaceX if you do feel that the company is too richly priced, though it bears mentioning that many of these also trade at high valuations.
In terms of launch, one of SpaceX’s biggest competitors is RocketLab (NASDAQ:RKLB). Founded in New Zealand, RocketLab is now headquartered in Los Angeles and posted annual revenue of $602 million in 2025.
That revenue number is a small fraction of SpaceX’s rumoured sales, underscoring the fact that, while RocketLab is the second-largest launch company, it is still some way behind rivalling SpaceX’s dominance of this market.
Similarly, AST SpaceMobile (NASDAQ:ASTS) is the second-largest provider of internet connectivity, behind Starlink.
Companies like these are pure-play space stocks. Many of them, though, while driving lots of revenue, are not yet profitable. For more established businesses that are tapping into the growing space economy, Chow looks at more diversified companies.
These include defence stocks like BAE Systems (LON:BA.) and Leonardo (MI:LDO), many of which can tap into space-related technology and revenue streams such as BAE’s contract with the US military for satellite missile tracking.
Angeline Ong, senior investment analyst at trading platform IG, says that the advantage of investing in defence/space double-plays is that they offer growth potential alongside the stability of government-backed contracts.
“Names like L3Harris (NYSE:LHX), RTX (NYSE:RTX) and Kratos (NASDAQ:KTOS) sit at this intersection - spanning satellite systems, communications, surveillance and missile technology - while players like BlackSky (NYSE:BKSY) add a data layer through geospatial intelligence used commercially and by defence,” said Ong.
Industrial firms like Mitsubishi Heavy Industries (TOKYO:7011) also offer diversified space exposure.
“Mitsubishi gets a lot of airtime for gas turbines and the AI boom, but of course, it's really, really critical to Japan's satellite manufacturing as well,” said Chow.
Space picks and shovels
That makes Mitsubishi a potential ‘picks and shovels’ stock for the space economy – the well-worn stock market adage being that it was the companies selling picks and shovels during the gold rush that made more money than the miners themselves.
“Don’t try to pick the winner - back the companies supplying all of them,” said Ong. “In space, that means businesses providing mission-critical components, satellite data and infrastructure - companies that benefit whether SpaceX or Rocket Lab wins the launch race, or whether Starlink or AST wins the connectivity battle.”
Canadian firm MDA Space (TORONTO:MDA) is favoured by Greg Eckel, portfolio manager of Canadian General Investments (LON:CGI).
The company provides components for space exploration companies, as well as constructing satellites, and builds the Canadarm robotic arm which will be used on NASA’s Gateway space station orbiting the moon.
“They have a $4 billion backlog,” said Eckel. “For a company that only has revenues of not even $2 billion yet, that’s a good indicator that something good is happening behind the scenes”. This is especially the case in the context of MDA having recently doubled satellite production capacity at its Montreal facility.
Italian solid rocket motor (SRM) manufacturer Avio (MI:AVIO) could also be worth a look.
“SRMs are probably one of the biggest defence pinch points globally,” said Chow. They drive propulsion for everything from rocket launches to missiles. “These SRMs are getting depleted at an astonishing rate, just in this Iran conflict alone,” said Chow. “They’re extremely specialised… maybe only half a dozen players globally are capable of making them, and Avio is one of the only scale players in this space.
Space funds and investment trusts
Ong picks out three funds and investment trusts that investors could turn to for space exposure:
- Seraphim Space (LON:SSIT)
- VanEck Space Innovators ETF (LON:JEDG)
- ARK Space & Defence ETF (LON:ARCX)
Scottish Mortgage is another option for investors who specifically want SpaceX exposure, though it should be noted that this is a diversified investment trust and isn’t specifically focused on space.
