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Why Space Stocks Are About to Blast Off

Written by Jason Stutman
Posted September 28, 2018 at 8:00PM

I know this might come off a bit cliché, but I can remember wanting to become an astronaut for NASA when I was still a child.

Growing up, I found myself naturally drawn to science, my interests spanning the ages.

On one end I was obsessed with the dinosaurs, most of which I knew by name through animated books and movies. Dr. Alan Grant of Jurassic Park was one of my grandest heroes, not to mention the fact that I carried a plastic Triceratops with me wherever I went.

At the opposing end of space and time, I dreamed of popular science fiction. I looked out to the stars at night and imagined a future filled with interstellar travel, trade, and exploration. There was nothing I wanted more than to fly a rocket to the great beyond (not even Dr. Grant could hold a candle to idols like Buzz Aldrin and Neil Armstrong).

But as most of us know, dreams can dissipate as we grow older, and it wasn’t very long before my wild ambition was overshadowed by staunch pragmatism. Not only were astronauts one in 15 million, I soon realized, but human space travel was as dangerous as it was uncommon.

Drawing a line between fantasy and reality, space became an afterthought to me for many years. If we weren’t sending men to Mars or colonizing the moon, I couldn’t care less. After all, there were plenty of pertinent matters to attend to right here on Earth.

Little did I know, though, that space would eventually come roaring back into my life. Mine and everyone else's, that is.

On the verge of a technological revolution, the reality is that we are now entering a new era of human history — what USA Today, CNBC, and Jeff Bezos are all calling the “golden age of space exploration.”

After years of living in the background of our minds, space is one again coming front and center.

Welcome to Space Race 2.0

Forbes puts it plain and simple: “[The] Space Industry is Booming.”

In fact, a record $3.9 billion was invested in commercial space ventures last year alone, with projections now approaching 300% broader industry growth. And the truth is we’re only just getting started.

In April, Morgan Stanley urged its clients to look out for what it’s calling “a new era of space exploration.” The investment bank is now forecasting a $1.1 trillion industry annually in 20 years. For perspective, that’s twice the size of global smartphone sales today.

Needless to say, the space industry is expected to be a substantial and meaningful growth opportunity for early investors.

So where exactly should you be looking today? Well, the billionaires and tech mavericks are a good place to start...

Speaking to reporters, Amazon CEO Jeff Bezos has made a telling statement, comparing the space industry today with the internet industry in the late ’90s.

You will see the same thing in space that I’ve witnessed on the Internet over the last 20 years... It will be a golden age of space exploration.

Along with a growing list of successful billionaires, Bezos is betting BIG on the emerging space industry.

The list now includes Tesla CEO Elon Musk, Virgin Group CEO Richard Branson, and Microsoft co-founder Paul Allen, just to name a few. They all see tremendous opportunity and promise in commercial space, with ambitions of space tourism and even factories operating out in the Earth’s orbit.

Of course, this is ultimately one small piece of a larger equation.

Government initiatives, including the pending creation of a U.S. Space Force, are sounding the bells of a new bull market. The same is true for small satellite internet deployments, promising to soon blanket the world in fast, wireless internet.

This includes Space X’s Starlink satellite constellation, already approved by the FCC for thousands of LEO (low-Earth orbit) satellites, enough to soon double and eventually quadruple the number of satellites in orbit today.

Mind you, that’s just one constellation. Many other companies are clamoring for a piece of the pie. That includes:

  • SoftBank-backed OneWeb, which wants to launch a constellation of 700 LEO satellites
  • Boeing, which has a proposed global network of up to 2,956 LEOs
  • Canada-based Telesat, launching a V-band LEO network comprised of 120 satellites
  • And Samsung, which has outlined its own 4,600-satellite constellation

Over 250 SmallSats were launched in 2017 alone, 70% of which are owned by for-profit enterprises. That number is about to explode over the next decade, though, with Frost & Sullivan predicting new installations and replacement missions to grow to 11,631 by 2030.

The conclusion investors should be making here is obvious enough. You don’t have to be a rocket scientist to conclude that demand for launch services is about to balloon.

That means massive revenue growth not just for private firms like SpaceX and Blue Origin, but also for a niche group of publicly traded “space stocks” that represent the picks and shovels of this emerging industry.

Keep an eye out over the next few weeks, as we have more details on those opportunities heading your way.

Until next time,

  JS Sig

Jason Stutman

follow basic @JasonStutman on Twitter

Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and The Cutting Edge. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted.

Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary.

Outside the office Jason is a lover of science fiction and the outdoors, and an amateur squash player at best. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.

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