5 Ways To Invest In The Space Industry

Investing

5 Ways To Invest In The Space Industry

Want to shoot for the stars, literally? Here are five ways to invest in the space industry while keeping your feet planted firmly on the ground.

Published on 8 December 2017

“Space, the final frontier,” as Captain Jean-Luc Piquard famously said, is – for all intents and purposes – a market with potentially infinite potential. Morgan Stanley forecasts that the space industry will account for more than US$1.1 trillion by 2040. Today it’s worth a puny US$350 billion.

Ever since the space shuttle programmes were halted in 2011 and budgets were cut at NASA, companies have turned the new “space race” private. Celebrity entrepreneurs such as Richard Branson, Elon Musk, and Jeff Bezos are ensuring new technologies and publicity keep the human race heading upwards and outwards, while profiting along the way. Here are five ways that you can be a galactic space investor:

1. Invest in the internet

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According to Morgan Stanley, satellite broadband will make up 50% of the global space economy by 2040. That’s huge compared to today’s numbers, where the internet is hardly on the map. They even say that it could be as much as 70%. The demand is continuing to grow for more and more data bandwidth and the cost of providing it via satellite is falling. Less than 1% is the number they are estimating that it will cost in comparison to today’s prices. Internet data companies – such as as GoDaddy and Alphabet, which feature prominently in Morgan Stanley’s “Space 20” stocks – are primed to reap these rewards.

2. Invest in space tourism

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Companies such as Richard Branson’s Virgin Galactic are a stone’s throw away from putting paying passengers into space. Launched in 2004, the company has 600 tickets sold for the US$250,000, five-minutes of weightless space flight. Plagued by a crash several years ago, commercial flights are set to take shape soon, but there hasn’t been a timetable given as of yet.

3. Invest in commercial passenger space services

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Space X, founded tech visionary Elon Musk, has plans to send you from city to city at about 17,000 mph via space. Yes that’s right, strap into a rocket and a few minutes later, arrive at your next destination. Now other companies have pointed towards doing this as well, including the aforementioned Virgin Galactic. However, with a similar looking set up to SpaceX’s already successful cargo rocket services, one can’t help but expect this to become a reality first.

There is also demand for travel between earth and the International Space Station (ISS). SpaceX and Boeing are working on a ferry-craft that will launch astronauts as early as 2019.

4. Invest in cargo ferry services

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There’s a little bit of a monopoly going on in the space cargo ferry industry. Due to the high-cost of entry and “re-entry” this was probably always going to be the case initially. Three companies are leading the pack and have been selected by NASA to start supplying the ISS with cargo in 2019: SpaceX, Sierra Nevada Corp, and Orbital ATK. The contracts will run until 2024, with each company supplying the ISS a minimum of six times each. SpaceX and Orbital ATK have already been successfully supplying the ISS for several years.

5. Invest in the defence industry

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Tech startups are working with the Department of Defence in the US to ensure they maintain their dominance in Space. Many of these startups work with data coming from satellites. Typically these will be related to imagery so, companies such as DigitalGlobe and Planet have contracted with the government to utilise their image software and imaging satellites.

The bottom line

Investing in space is becoming mainstream. The opportunity to reach for the stars is no longer a government-only initiative. Whether its launching rockets, creating software, or providing internet, companies from all walks of life are getting in on the action. We expect this number to grow exponentially as we head further into the 21st century. Getting in early is not without its risks, but with so much going on, investors are sure to find the right investment with the potential to rocket their portfolios higher.

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