Just a few weeks ago, a secret partnership between SpaceX and one of America’s biggest defense contractors came to light.
Somehow, the revelation stayed out of the mainstream press. But it has huge implications for America’s security…
And it could amount to a major investment opportunity.
Here’s what we learned…
Apparently, SpaceX has partnered with defense giant Northrop Grumman (NYSE: NOC) on a classified satellite project for the National Reconnaissance Office.
If you’re not familiar, the NRO is the agency that manages our nation’s vast network of spy satellites. It operates in all phases — design, construction, launches, and, ultimately, operation.
And these days, it’s incredibly busy, as the agency plans to quadruple the number of spacecraft it has in orbit.
As Maj. Gen. Christopher Povak, the NRO’s deputy director, explained:
Proliferation and diversification of our architecture will provide increased coverage, greater capacity and resilience and more timely delivery of data. The diversity of assets will make it more difficult for adversaries to harm the U.S. intelligence infrastructure.
If you read that quote carefully you’ll see that this isn’t just about expanding our satellite architecture, broadening its coverage, improving its capabilities, or streamlining data transfers…
It’s also a matter of making our satellite network less vulnerable to a potential attack.
Indeed, emerging threats like Russia’s space nuke and China’s kill web have made clear that our adversaries have made targeting our satellites a key priority.
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That would obviously be a nightmare, as it could bring our internet-reliant society to a screeching halt. But that’d just be a bonus for our adversaries who are really intent on knee-capping our military by breaking communications, shielding their assets from our view, and weakening our air and missile defenses.
Part of the Pentagon’s response to that effort is to blanket space with as many satellites as possible. That way, we won’t go completely blind if our enemies succeed in knocking some out of the sky.
And that’s what brings us back to SpaceX and Northrop Grumman, who have developed quite a partnership.
We already knew SpaceX was working on satellites for the NRO as part of a $1.8 billion deal it signed in 2021. But the news that the company is working alongside Northrop Grumman was only more recently uncovered in a Reuters report that no other major media outlet has cared to follow up on.
Northrop’s contribution involves testing and installing sensors on hundreds of spy satellites that SpaceX will send swarming through low Earth orbit.
The first batch of these satellites was set to be launched on Sunday — the first of six launches planned for this year. However, the full scope of the operation is a secret.
This isn’t the first time SpaceX and Northrop Grumman have joined forces, either.
In January, Northrop Grumman’s Cygnus cargo delivery spacecraft was successfully launched to the International Space Station by SpaceX’s Falcon 9 rocket. Cygnus carried 8,200 pounds of critical supplies, equipment and science experiments for astronauts aboard the station.
The two will likely continue to collaborate going forward, too, considering the growing relevance of cislunar space (the range of orbits between the Earth and the moon).
Indeed, the United States has ramped up its satellite launches by more than 10-fold over the past decade. And thousands more satellites are set to launch in the years ahead.
We’re also competing with China for a presence on and around the moon itself, with the ultimate goal of getting to Mars.
This has opened up a huge opportunity for aerospace companies like Northrop Grumman, which are branching out far beyond the missiles, tanks, and jets you’d more typically associate with a defense contractor.
Northrop Grumman’s Space segment posted $3.7 billion in sales in the first quarter of 2024, a 9% increase from the same period last year.
That increase mirrored a 9% surge in total sales, leading to a 13% jump in operating income and a 15% increase in EPS.
No doubt, Northrop Grumman is clearly benefiting from off-world conflict as much as it is from Earth-bound defense these days.
I even recently discussed a contract the company got from DARPA to explore the feasibility of constructing a lunar railway on the Angel Research Podcast.
Northrop Grumman isn’t the only stock investors can play this either — even with SpaceX off the table.
That’s because there’s another publicly traded space launch company that’s also set to score major profits from satellite proliferation.
Like SpaceX, it’s already signed and executed numerous contracts on behalf of the NRO, making it a trusted Pentagon partner. However, it’s also magnitudes smaller, trading for less than $5 per share.
I’ve got all the details on the massive profit opportunity here.
Fight on, Jason Simpkins Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more… In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor’s page. Be sure to visit our Angel Investment Research channel on YouTube and tune into Jason’s podcasts. Want to hear more from Jason? Sign up to receive emails directly from him ranging from market commentaries to opportunities that he has his eye on. 
