In this article, we discuss the 10 best space stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Space Stocks to Buy Now.
Investments in space exploration and human spaceflight firms have exploded in the past few years as the public sector interest in the area increases, the total cost of space launches comes down dramatically, and new advances in technology boost rapid growth in the industry. Tesla, Inc. (NASDAQ: TSLA) owner Elon Musk and Amazon.com, Inc. (NASDAQ: AMZN) chief Jeff Bezos have invested billions in their own private space firms over the past decade. According to a report by investment bank Morgan Stanley, the space industry will be worth $1 trillion in 2040.
For comparisons, the industry was valued at $350 billion in 2020. Morgan Stanley predicts that investments in space are likely to go beyond aerospace and defense in the coming years and spread to the information technology and telecom sectors. Companies like SpaceX, owned by Tesla, Inc. (NASDAQ: TSLA) supremo Elon Musk, and Blue Origins, led by Amazon.com, Inc. (NASDAQ: AMZN) bigwig Jeff Bezos, are likely to be at the forefront of this boom. SpaceX is valued at close to $74 billion while Blue Origins is reportedly worth more than $10 billion.
As private funding in the space sector increases, commercial applications of space, like broadband services, space tourism, and investments in reusable rockets will likely dominate discussions. Already, Tesla, Inc. (NASDAQ: TSLA) owner Elon Musk has launched Starlink, a constellation of satellites operated by SpaceX for the purpose of providing broadband services. Musk has also hinted he may take Starlink public, even before SpaceX. Amazon.com, Inc. (NASDAQ: AMZN) chair Jeff Bezos recently undertook a flight aboard a space vehicle operated by Blue Origin to market the capability to the wider world.
Defense-related applications of space are also attracting the attention of government spending. In 2019, the United States announced the launch of a Space Force, a special branch of the military dedicated to space security, combat power projection, space mobility and logistics information mobility. The US government allocated a budget of more than $17 billion for the Space Force in 2022. This represents an increase of over 13% compared to the budget of the force in the last fiscal year. The Chinese, Russian, European, and even Indian interest in the domain has also been growing, along with spending in the sector.
According to Morgan Stanley, innovation in the sector is also a major theme that will continue to shape how the market behaves. The investment bank revealed in a report that the cost to launch a satellite has decreased from $200 million to $60 million in recent years through the use of reusable rockets. This could further drop to around $5 million, the bank claims. The cost of satellite mass production has also come down from $500 million per satellite to $500,000, mostly as a result of relentless innovation in the industry.
In addition to Tesla, Inc. (NASDAQ: TSLA) and Amazon.com, Inc. (NASDAQ: AMZN), some of the other top names in the space sector presently include The Boeing Company (NYSE: BA), Lockheed Martin Corporation (NYSE: LMT), and Northrop Grumman Corporation (NYSE: NOC), among others. Bank of America projects that the space market will cross the $1 trillion in value mark by 2030, a full decade earlier than anticipated by Morgan Stanley. The space sector will likely disrupt other sections of the market as it grows, including the finance world that has been broadly struggling amid the rise of fintech and crypto.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Pixabay/Public Domain
Our Methodology
With this context in mind, here is our list of the 10 best space stocks to buy now. The aim of the article is to provide a basic rundown of the biggest and brightest names in the space industry,
The list is compiled according to the number of hedge fund holders in each company. Data from the 873 funds tracked by Insider Monkey was used for this purpose.
Special importance was assigned to the basic business fundamentals and analyst ratings for each firm to provide readers with some more context into the business so they can make more informed investment choices.
Best Space Stocks to Buy Now
10. Rocket Lab USA, Inc. (NASDAQ: RKLB)
Number of Hedge Fund Holders: N/A
Rocket Lab USA, Inc. (NASDAQ: RKLB) is placed tenth on our list of 10 best space stocks to buy now. The company concentrates on developing rocket launch and control systems. It is headquartered in California.
Rocket Lab USA, Inc. (NASDAQ: RKLB) has a market cap of $87 million. The company offers a host of space-related services that include dependable launch solutions, spacecraft design and development, satellite components and on-orbit management.
On August 23, the stock soared close to 4% after the company announced that it would begin the final process of designing and manufacturing two interplanetary Photon spacecraft for a science mission to Mars.
9. Astra Space, Inc. (NASDAQ: ASTR)
Number of Hedge Fund Holders: N/A
Astra Space, Inc. (NASDAQ: ASTR) is a California-based space launch company. It is placed ninth on our list of 10 best space stocks to buy now.
On July 27, investment advisory Deutsche Bank initiated coverage of Astra Space, Inc. (NASDAQ: ASTR) stock with a Buy rating and a price target of $13, noting the firm offered a unique value proposition in the marketplace.
Out of the hedge funds being tracked by Insider Monkey, California-based firm Light Street Capital is a leading shareholder in Astra Space, Inc. (NASDAQ: ASTR) with 2.9 million shares worth more than $37 million.
In addition to The Boeing Company (NYSE: BA), Lockheed Martin Corporation (NYSE: LMT), and Northrop Grumman Corporation (NYSE: NOC), Astra Space, Inc. (NASDAQ: ASTR) has also managed to grab headlines as one of the premier space firms.
8. AST SpaceMobile, Inc. (NASDAQ: ASTS)
Number of Hedge Fund Holders: 15
AST SpaceMobile, Inc. (NASDAQ: ASTS) is ranked eighth on our list of 10 best space stocks to buy now. The company provides space-based mobile broadband services and is headquartered in Texas.
On July 12, investment advisory Barclays initiated coverage of AST SpaceMobile, Inc. (NASDAQ: ASTS) stock with an Overweight rating and a price target of $29, noting that the proposition of the firm was unique and the addressable market was very significant.
At the end of the second quarter of 2021, 15 hedge funds in the database of Insider Monkey held stakes worth $74 million in AST SpaceMobile, Inc. (NASDAQ: ASTS).
Along with The Boeing Company (NYSE: BA), Lockheed Martin Corporation (NYSE: LMT), and Northrop Grumman Corporation (NYSE: NOC), analysts are also paying attention to AST SpaceMobile, Inc. (NASDAQ: ASTS) as a top name in the space sector.
7. Maxar Technologies Inc. (NYSE: MAXR)
Number of Hedge Fund Holders: 15
Maxar Technologies Inc. (NYSE: MAXR) is a Colorado-based earth intelligence and space infrastructure solutions provider. It is ranked seventh on our list of 10 best space stocks to buy now.
On August 30, investment advisory Barclays initiated coverage of Maxar Technologies Inc. (NYSE: MAXR) stock with an Equal Weight rating and a price target of $35. David Strauss, an analyst at the firm, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm Simcoe Capital Management is a leading shareholder in Maxar Technologies Inc. (NYSE: MAXR) with 2.4 million shares worth more than $96 million.
The Boeing Company (NYSE: BA), Lockheed Martin Corporation (NYSE: LMT), and Northrop Grumman Corporation (NYSE: NOC) are some of the most renowned names in the space industry, alongside Maxar Technologies Inc. (NYSE: MAXR).
6. Virgin Galactic Holdings, Inc. (NYSE: SPCE)
Number of Hedge Fund Holders: 18
Virgin Galactic Holdings, Inc. (NYSE: SPCE) is placed sixth on our list of 10 best space stocks to buy now. The company is headquartered in New Mexico and markets human spaceflight solutions.
On August 31, investment advisory Jefferies initiated coverage of Virgin Galactic Holdings, Inc. (NYSE: SPCE) stock with a Buy rating and a price target of $33, noting the desire to explore space could drive the revenue of the firm up to $1.7 billion by 2030.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Virgin Galactic Holdings, Inc. (NYSE: SPCE) with 4.5 million shares worth more than $209 million.
The Boeing Company (NYSE: BA), Lockheed Martin Corporation (NYSE: LMT), and Northrop Grumman Corporation (NYSE: NOC) are some of the most recognized names in the space industry, just like Virgin Galactic Holdings, Inc. (NYSE: SPCE).
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Disclosure. None. 10 Best Space Stocks to Buy Now is originally published on Insider Monkey.
