This article looks at the 10 best space stocks to buy according to analysts. We also dive deep into American dominance in space technology.
Space exploration continues to be a key area of research for scientists. In recent decades, it has attracted interest from security experts globally, given the wide use of satellites for peaceful military purposes, such as navigation, intelligence gathering, and military communications.
READ ALSO: 8 Best Military Drone Stocks To Buy According to Analysts and 11 Undervalued Aerospace Stocks To Buy According to Hedge Funds.
Both the United States and the Soviet Union had come close during the Cold War to developing satellites that were capable of striking targets on the surface of Earth. However, all efforts were put to a halt with the 1967 Outer Space Treaty that bans countries from non-peaceful activities in space, including stationing weapons of mass destruction.
The United States continues to dominate space, with the most number of active satellites and the largest space budget. Home-based aerospace companies have played a key role in ensuring this strength. Space Based-Infrared System, or SBIRS, which is one of the United States Space Force’s high priority programs, has further enhanced the country’s space power with capabilities to detect missile launches and provide early warning.
Several pure-play space stocks have surged following Trump’s victory in the November 2024 presidential elections, driven by what analysts are describing as the ‘Trump-Elon trade’. While talking to CNBC, Andrew Chanin, the CEO of ProcureAM, LLC, which runs an ETF with exposure to space stocks, believes the Trump-Elon partnership will prove to be a significant driving force for the industry.
“I don’t think anyone can underplay the potential catalyst that I don’t think many people were talking about before: the most important human in the history of the space industry having the ear of the president-elect, who in his past term found space important enough to create a separate branch of the military.”
Strong financial results during the third quarter of 2024 have also partly led the stock rally. Cantor Fitzgerald analyst, Andres Sheppard, has said there is a broader sentiment driving the stocks, such as demand for national security and ongoing work on key space projects.
“We’re seeing a big increase in investor inbounds. We’re getting calls and emails from institutional investors, which are finally starting to realize that this market is only going to continue to accelerate. It’s only going to continue to proliferate because of national security, because of the Artemis program to get the U.S. astronauts back on the moon, because of Elon’s ambitious goals of getting to Mars.”
Sheppard also stated that space stocks are benefitting from SpaceX being privately held, as investors look toward other companies in the industry to enhance their exposure to the space sector.
With that said, let’s shift focus and look at the 10 best space stocks to buy according to analysts.
A satellite being released from a launch vehicle, heading into space.
Methodology
We sifted through ETFs with exposure to the space sector and our previous articles on the industry to get a pool of space stocks. From there, we picked 10 stocks with the highest average share price upside potential and ranked them in ascending order of the metric.
We have only considered stocks that had at least three analyst ratings. All data is as of January 16, 2025. For perspective, we have also shared the hedge fund sentiment toward each stock, based on Insider Monkey’s database of over 900 prominent hedge funds as of Q3 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Space Stocks To Buy According To Analysts
10. Northrop Grumman Corporation (NYSE:NOC)
Average Share Price Upside Potential as of January 16: 15.43%
Number of Hedge Fund Holders: 48
Northrop Grumman Corporation (NYSE:NOC) is one of the largest aerospace and defense contractors in the world. It is the manufacturer of the B-21 Raider, the long-range, stealth strategic bomber, which is intended to replace the aging B-1B Lancer and B-2 Spirit fleets.
The company is also working on several critical contracts for the US Space Force (USSF). In December 2024, Northrop Grumman Corporation (NYSE:NOC) was awarded a contract extension for Phase 2 of its Next Gen OPIR Polar (NGP) for the USSF’s Space Systems Command. The multi-year award has moved the program into manufacturing, assembly, integration, and testing of ground systems and space vehicles.
This follows the successful completion of the Ground Critical Design Review and Program Critical Integration Review stages of the NGP. Using advanced sensors, the program is aimed at providing coverage of the North Pole to detect missile threats from adversaries, as the quickest path for these threats to the U.S. is from the Northern Hemisphere.
On October 24, Northrop Grumman Corporation (NYSE:NOC) announced financial results for the third quarter of fiscal 2024. The company generated sales of $10 billion, up 2% year-over-year, driven by a surge in demand for advanced weapons amid intense escalations in the Middle East and the Ukraine-Russia war. Net earnings totaled $1 billion, translating to a diluted EPS of $7, beating estimates of $6.08 per share.
NOC’s Space Systems sales dropped by $83 million, or 3%, during the quarter, due to the wind-down of work on the NGI and space programs, which impacted sales by $224 million. However, the segment experienced a $129 million increase in Space Development Agency (SDA) satellite programs and an uptick in sales across NOC’s remaining restricted space portfolio. Moreover, operating income was up 14% from last year, while the operating margin rate stood at 12%.
Northrop Grumman Corporation (NYSE:NOC) is among the best space stocks to buy according to analysts, with a consensus Buy rating, and an average share price upside potential of over 15%.
9. The Boeing Company (NYSE:BA)
Average Share Price Upside Potential as of January 16: 17.07%
Number of Hedge Fund Holders: 52
The Boeing Company (NYSE:BA) is a leading aerospace company that manufactures commercial airplanes, space systems, and defense equipment for customers in more than 150 countries.
2024 was a difficult year for The Boeing Company (NYSE:BA), with its share price losing 30% of its value. The year got off to the worst possible start in January, after a door plug of an Alaska Airlines 737 Max 9 flight fell off after takeoff. Since the incident, there has been a slowdown in the production of airplanes, with an increased focus on safety.
The company’s operations were also hampered by around 33,000 workers going on a seven-week strike, demanding higher wages, job security, and a restoration of their pension. Its problems were further aggravated when NASA in August decided against using The Boeing Company (NYSE:BA) capsule to bring back its two stranded astronauts to Earth, causing a reputational hit.
During Q3 2024, Boeing posted a revenue of $17.8 billion, down 1% from last year, due to lower commercial wide-body deliveries and the IAM strike. This resulted in a quarterly loss of over $6 billion. The Defense, Space & Security segment generated $5.5 billion in revenue and booked $8 billion in orders during the quarter.
Despite ongoing challenges, most analysts believe that The Boeing Company (NYSE:BA) is too big a company to fail, and with a backlog of orders worth $500 billion and international travel growing every year, it is bound to recover once the headwinds are over. Wall Street analysts anticipate a 17.07% uptick, on average, in Boeing’s share price, making it one of the best space stocks to buy according to analysts.
