In this article, we will take a look at the 7 Best Space Exploration Stocks to Invest In.
The space industry is growing faster than ever and is approaching the next frontier. The U.S. space economy is at the center of this advancement. The space industry is driving significant technological progress that is playing a major role in industries such as telecommunications, defense, energy exploration, bioscience, and manufacturing. Moreover, the robotic exploration missions have increased, accelerating the space activity. This growing space economy creates opportunities to invest in space stocks.
According to a report by McKinsey, the global space economy is expected to reach $1.8 trillion by 2035, up from nearly $630 billion in 2023. The key drivers for the growth of the space economy would be satellites, launchers, and telecommunication devices. For instance, Uber relies on satellite signals and provides GPS directions to drivers and riders.
The growing demand for positioning and navigation services on smartphones and the increased demand for monitoring and data collection powered by AI will be key for the space economy. According to Research and Markets, the global AI in space exploration market was valued at $3.4 billion in 2023. This market is expected to reach $14.25 billion in 2028, growing at a CAGR of 33.19%.
Trump’s Take on Space?
President Trump created the Space Force in his first tenure, creating history by passing a $728 billion defense bill. In his second tenure, the policy for the space economy is relatively unclear as the tariff agenda remains a priority.
Recently, the Chief of Space Operations, Gen. Chance Saltzman, told Defense One that the Space Force remains in a good spot.
“I think in the end, what you’ll see is that because our priorities were so focused on warfighting, so focused on the new emerging threats, that everybody is kind of coming to the realization that we have to address, that we were pretty well aligned with the new administration’s priorities, and so I think the Space Force is going to be in a good spot,” Saltzman said.
Late in 2024, the Pentagon announced to increase its spending for proliferated low Earth orbit (pLEO) satellite services from $900 million to a whopping $13 billion through 2028. This will create opportunities for both private and public contractors of the Pentagon.
With that, let’s take a look at the 7 Best Space Exploration Stocks to Invest In.
A satellite being released from a launch vehicle, heading into space.
Our Methodology
We used financial media reports to shortlist companies engaged in the space exploration business. We then looked for space exploration stocks widely held by hedge funds. Data for the number of hedge fund investors for each stock was taken from Insider Monkey’s database, updated as of Q4 2024. Finally, the 7 best space exploration stocks to buy were ranked in ascending order based on the number of hedge funds holding stakes in them.
Why are we interested in the stocks that hedge funds and billionaire investors 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
7 Best Space Exploration Stocks to Invest In
7. Virgin Galactic Holdings, Inc. (NYSE:SPCE)
No. of Hedge Fund Holders: 10
Virgin Galactic Holdings, Inc. (NYSE:SPCE) is an aerospace and space travel company. It provides commercial spaceflight services for individuals, researchers, and government agencies. The company is involved in the design and development, manufacturing, flight testing, and post-flight maintenance of its spaceflight system vehicles.
Virgin Galactic Holdings, Inc. (NYSE:SPCE) ended 2024 on a better note compared to 2023. The company’s expenses in 2024 dropped from $538 million in 2023 to $384 million, a 29% drop. On top of the reduction in expenses, the company has around $657 million in cash and cash equivalents. Virgin Galactic Holdings is now building real assets and has completed the design phase of its new spaceships. The company plans to launch its first commercial research spaceflight in the summer of 2026. The company has also made notable infrastructure investments, adding cost-effective ships to its fleet.
6. Redwire Corporation (NYSE:RDW)
No. of Hedge Fund Holders: 11
Redwire Corporation (NYSE:RDW) is a leading space infrastructure and innovation company. Redwire assists civil, commercial, and national security space programs. The company is engaged in the development and production of core space infrastructure. Redwire’s spacecraft portfolio is involved in missions and technologies supporting space exploration, including deep space, lunar, and Martian initiatives.
Redwire Corporation (NYSE:RDW), along with ispace-U.S., have signed an MoU to jointly pursue commercial lunar exploration and science missions for the NASA Commercial Lunar Payload Services (CLPS). The NASA CLPS is a multi-award indefinite delivery and quantity (IDIQ) contract with a maximum contract value of approximately $2.6 billion through 2028. Redwire is one of the prime contractors on NASA’s IDIQ contract.
The company has received several other contracts from NASA and other clients. By the end of 2024, the company secured $229.8 million in contract awards, ending the year with a backlog of $296.7 million. In FY2024, the company posted a record $304.1 million in revenue, up by 25% year-over-year. The increased demand for Redwire’s space infrastructure solutions and strategic investments led to revenue growth. The company delivered 186 sensors to support different space missions. Redwire added three new facilities in California and Poland, expanding its global footprint and improving its production capabilities.
5. Intuitive Machines, Inc. (NASDAQ:LUNR)
No. of Hedge Fund Holders: 26
Intuitive Machines, Inc. (NASDAQ:LUNR) is a diversified space exploration company that offers various space products and services to support the exploration of the Moon, Mars, and other planets. Intuitive Machines has achieved major milestones, including the first U.S. commercial lunar space landing, through its IM-1 mission with NASA’s CLPS initiative.
Intuitive Machines, Inc. (NASDAQ:LUNR) remains a prominent partner of NASA. The company is a major commercial partner of NASA’s Artemis program, which alone has committed over $93 billion. Intuitive Machines obtained a transformative NASA Near Space Network contract worth around $4.82 billion.
On March 25, Josh Sullivan from Benchmark reiterated a Buy rating on LUNR shares, maintaining a price target of $16. Sullivan highlighted a strong backlog and solid financial position to be key for the company’s growth. Intuitive Machines, Inc. ended FY2024 with a record backlog of $328 million, indicating a 22% growth from a year ago. The company posted a strong cash position of more than $385 million. The company anticipates 2025 revenue of between $250 million and $300 million, with analysts projecting annual earnings growth of almost 94%.
4. Rocket Lab USA, Inc. (NASDAQ:RKLB)
No. of Hedge Fund Holders: 37
Rocket Lab USA, Inc. (NASDAQ:RKLB) is an end-to-end space company. It offers small and medium-class rockets, spacecraft, and spacecraft components. The company also provides related software and services to support the space economy. The company is engaged in reliable launch services, on-orbit management solutions, and other space-relevant infrastructure solutions.
Rocket Lab USA, Inc. (NASDAQ:RKLB) ended 2024 with a record revenue of $436.2 million, beating the estimates by $1.90 million. The company made a record 16 launches for Electron in 2024, a notable 60% increase in launch cadence from a year ago. The company achieved over $450 million in newly secured launch and space systems contracts. The company’s Neutron program is moving smoothly and is ahead of its planned launch in the second half of 2025.
The company’s newly introduced constellation-class satellite platform, Flatellite, will be available for defense, national security, and commercial services. This satellite platform opens paths for Rocket Lab to operate its future constellation.
3. L3Harris Technologies, Inc. (NYSE:LHX)
No. of Hedge Fund Holders: 48
L3Harris Technologies, Inc. (NYSE:LHX) is a diversified end-to-end technology company offering solutions in space, air, land, sea, and cyber domains. The company serves through four segments: Space & Airborne Systems (SAS), Integrated Mission Systems (IMS), Communication Systems (CS), and Aerojet Rocketdyne (AR). The SAS segment is involved in space missions and offers full-mission solutions. L3Harris expanded its space business after it acquired Aerojet Rocketdyne in 2023. Aerojet Rocketdyne offers engines and space systems for propulsion to the U.S. government, including NASA, DoD, and other space contractors.
On April 11, Noah Poponak from Goldman Sachs upgraded the rating on LHX shares from Sell to Buy, increasing the price target from $198 to $263 per share. Poponak is bullish on LHX following improved financial performance and the potential environment of increased defense spending. L3Harris Technologies, Inc. (NYSE:LHX) posted a non-GAAP diluted EPS of $3.47 in Q4 2024, surpassing expectations. The robust financial performance was driven by increased demand across its businesses, backed by operational efficiencies. During FY2024, the company posted a revenue of $21.3 billion, up by 10% from a year ago.
2. Leidos Holdings, Inc. (NYSE:LDOS)
No. of Hedge Fund Holders: 51
Leidos Holdings, Inc. (NYSE:LDOS) is a defense company engaged in various operations. The company offers a range of space-based services such as managing space missions, designing and manufacturing rocket payloads, and communication services for the rocket payloads. The company has a strong and growing business with space and defense agencies, including NASA, the Pentagon, and other agencies.
Leidos Holdings, Inc. (NYSE:LDOS) continues to perform well with remarkable outcomes in 2024. The company surpassed its three-year performance target set in 2021, obtaining an organic revenue CAGR of 6.6% and an adjusted EBITDA margin of 12.9%, exceeding its targets. For the full year, the company posted a revenue of $16.66 billion, growing by 6% from a year ago. Leidos won several contracts, including a $2.6 billion follow-on contract with the TSA and a $4.1 billion IDIQ for the IFPC Enduring Shield Air Defense system. The company is well-positioned to benefit from the current environment and achieve its goals.
1. Lockheed Martin (NYSE:LMT)
No. of Hedge Fund Holders: 65
Lockheed Martin (NYSE:LMT) is a global aerospace and defense company, famously known for its F-35 Joint Strike Fighter jet. However, the company has a notable space business focused on the manufacturing of satellites and missiles. The company has a launch business through a joint venture with Boeing.
Lockheed Martin (NYSE:LMT) is well-known for its relationship with the Pentagon and NASA. The company is involved in several government programs. Its space unit exposes it to the growing defense areas, such as hypersonic missiles. Lockheed Martin also designs and builds lunar and deep space exploration, including NASA’s Orion spacecraft. The company is also creating weather and climate observation satellites such as the GOES-R series.
Space accounts for more than 15% of the company’s total revenue. In FY2024, the company’s space segment posted $12.5 billion in revenue, out of a total of $71.04 billion. Lockheed Martin might face headwinds in its defense segment, but the opportunities in the space economy add to its benefit.
While we acknowledge the potential of LMT to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks have lost around 25%. If you are looking for an AI stock that is more promising than LMT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks To Invest In According to Billionaires.
Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
