We recently published a list of 10 VLEO Technology Stocks and Startups to Watch in 2025. In this article, we are going to take a look at where L3Harris Technologies Inc. (NYSE:LHX) stands against other VLEO technology stocks and startups to watch in 2025.
Very Low Earth Orbit (VLEO) refers to altitudes below 450 km, much lower than traditional low Earth orbit (LEO), which typically includes altitudes between 500 km and 2,000 km. This emerging sector in the space industry offers numerous advantages, including lower latency for communications, higher-resolution imaging capabilities, and reduced launch costs. However, operating in VLEO also presents challenges such as increased atmospheric drag, requiring innovative propulsion and station-keeping technologies. VLEO technology is gaining traction as companies seek more efficient ways to deliver high-speed broadband, enhance Earth observation capabilities, and support national security initiatives. The increasing demand for global connectivity, precise geospatial intelligence, and real-time satellite-based data services is driving investments in VLEO solutions. Governments, defense agencies, and commercial enterprises alike are exploring VLEO applications for sectors such as telecommunications, agriculture, disaster response, and environmental monitoring.
From an investment perspective, VLEO-related stocks and startups offer exposure to one of the fastest-growing segments of the aerospace industry. Companies involved in VLEO range from established aerospace giants developing cutting-edge satellite technology to emerging startups focused on specialized propulsion, high-resolution imaging, and space-based communication networks. The rise of private-sector space initiatives, alongside increased government contracts, provides a strong growth outlook for businesses operating in this niche – for reference, external research boutiques such as Juniper Research estimated that investments into VLEO will reach $220 billion by 2027, from only $17 billion in 2024, implying an annualized growth rate of 135%.
Investors interested in space technology stocks should consider VLEO companies for several reasons. First, the commercialization of space is accelerating, with increasing private-sector involvement from leading firms. Second, VLEO satellites can provide more cost-effective alternatives to traditional LEO and geostationary orbit systems, creating opportunities for companies offering facilitatory or complementary technology in this space. Finally, the sector benefits from strong long-term tailwinds, including advancements in artificial intelligence, cloud computing, and 5G networks, which require faster and more efficient space-based infrastructure. With this, we will take a look at some of the best VLEO stocks to invest in.
Our Methodology
We shortlisted 10 names, which include both publicly traded companies as well as private companies and startups. We ranked the names by market capitalization or the amount of funding raised as we believe the company’s size correlates with the potential to gain a substantial market share by either facilitating or complementing the rapid growth of the VLEO technology market. For publicly traded companies we also include the number of hedge funds that own it.
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 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A military jetfighter against a deep blue sky with the sun behind it.
L3Harris Technologies Inc. (NYSE:LHX)
Latest Valuation/Funding Estimate: $37.50 billion market capitalization
Number of Hedge Fund Holders: 40
L3Harris Technologies Inc. (NYSE:LHX) is a leading defense contractor and aerospace technology company with a strong presence in satellite communications, electronic warfare, and space-based intelligence. The company plays a crucial role in the VLEO sector through its advanced satellite solutions designed for military, intelligence, and commercial applications. As governments and private entities increasingly rely on VLEO satellites for real-time surveillance, reconnaissance, and secure communications, LHX stands to benefit from growing demand in this specialized space domain. The US-based company ranked fifth on a recent list of 10 Best Space Stocks To Buy According To Analysts.
From an investment standpoint, L3Harris Technologies Inc. (NYSE:LHX) is an attractive play on both the VLEO trend and broader defense sector growth. One of the company’s key advantages in the VLEO market is its expertise in compact, resilient satellite technology. LHX has been developing next-generation small satellites optimized for VLEO operations, providing high-resolution imaging, rapid data transmission, and enhanced situational awareness. Unlike traditional geostationary satellites, VLEO satellites operate at much lower altitudes, offering superior image clarity and reduced signal latency, which is particularly valuable for defense and intelligence agencies. The company benefits from long-term government contracts, steady cash flows, and a commitment to innovation, making it a relatively stable option in the aerospace and defense industry. Furthermore, as geopolitical tensions drive increased military spending on space-based assets, the company is well-positioned to capture a significant share of this expanding market. With its strong track record, robust financials, and leadership in high-tech satellite solutions, LHX represents a compelling investment opportunity for those seeking exposure to the rapidly evolving VLEO and defense technology landscape.
In the fourth quarter of 2024, L3Harris Technologies Inc. (NYSE:LHX) delivered on its 2024 commitments by executing its Trusted Disruptor strategy and making progress towards its 2026 framework, ending the year with a record backlog. LHX achieved revenue of $21.3 billion, up 10% and 4% organically, with a segment operating margin of 15.4%. For 2025, management expects organic growth of 4% at the midpoint, with segment operating margin anticipated to be mid-to-high 15%. The company exceeded its gross cost savings target by 2x, reaching $800 million in 2024, and now expects to achieve $1.2 billion in cumulative cost savings by the end of 2025, exceeding its $1 billion commitment from a year ago. Looking ahead to 2026, LHX has updated its financial framework, increasing segment operating margins to a low 16% while targeting $23 billion in sales and $2.8 billion in cash, representing a double-digit CAGR – the optimistic long-term guidance represents a strong signal that long-term tailwinds, including from exposure to VLEO, are starting to play out.
Overall, LHX ranks 1st on our list of VLEO technology stocks and startups to watch in 2025. While we acknowledge the potential of LHX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LHX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
