Note from Ed Coburn, CEO, Cabot Wealth Network
Following their recent article on the AI Megatrend, we’re happy to share another guest column from Michael Proffe and Gregg Early.
Michael Proffe applied the discipline and rigor he learned as an engineer and certified pilot to his emerging passion for investing to build Germany’s largest independent investment advisory publisher – as well as one of the most recognized and influential investing experts in Europe. His particular area of expertise is investing in megatrends.
As always, please share any feedback that you have regarding these guest posts at support@cabotwealth.com.
Think back to the days when explorers were sailing the oceans, not knowing if there was an end of the world, or what was beyond the shores they lived upon.
While we have done some remote exploration of our galaxy, we’re only now beginning to understand the value of space.
For example, there are quadrillions of dollars of minerals that are potentially available on the Moon, nearby asteroids and other planets.
That means there are a number of nations looking to access this wealth. And that also means there are pirates and competing pioneers. That means there are quadrillions of reasons that any nation that accesses this wealth will want to protect it from discovery, to transport, to receiving back on Earth.
This also means setting up all the infrastructure to build out that logistical system – telecommunications, extraction, transportation, and of course, security.
Yet there’s even more value in space. There’s also the opportunity to use space as a way to improve life and security on Earth. Starlink and Golden Dome are two examples of space tools that are focused on using space to enhance security and productivity here.
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Space Race 2.0 Is in Full Gear
While most Americans have heard of Elon Musk’s SpaceX, or Jeff Bezos’s Blue Origin, there are a large and growing number of space companies around the world.
China, Europe, India, the UAE, Japan and others are actively building out their own versions of Starlink as well as private launch and space vehicle companies.
And they’re also all building out military applications for space as well.
In 2024, the U.S. Space Force was given a $61 billion budget. And in the coming years that will be dwarfed as more countries grow their defense sectors beyond prying eyes, well above the Earth.
India, China, Europe, and consortia of countries elsewhere are all investing in space, not only for commercial purposes but for defensive purposes as well.
Everybody Wants a Golden Dome
You may have heard the desire of President Donald Trump to build a Golden Dome, which has been a concept that was first floated by Ronald Reagan.
Part of the key is having a variety of satellite networks in space that are monitoring any significant threats deployed toward the U.S. Today, these threats include hypersonic missiles as well as traditional nuclear intercontinental ballistic missiles.
Some of those satellites are armed with lasers to intercept missiles as they reach their peak altitudes, but that information is also sent to ground-based missile systems as well.
But this is a massively complex system that couldn’t be imagined, much less realized, without the use of artificial intelligence (AI) and space-based systems.
And Golden Dome is just the marquee project that’s being talked about.
China has already built its own space station and is busily building its own space comms, satellites and “dome.”
And everyone is racing to get humans back on the moon to build bases.
The end products are sexy.
But getting those end products established outside Earth’s atmosphere is expensive, time-consuming, and incredibly complex.
Key Space Defense Sectors and Players
Launch companies:
SpaceX is the headline private launch company in the U.S. right now. Although there’s a lot of talk about an IPO in 2026. Its current strength is putting mid-sized payloads in low Earth orbit (LEO). Its Starship is where the money is. That can be the workhorse for Moon missions and beyond that require larger payloads.
Blue Origin is also a private company that is just getting involved in U.S. defense sector launches and is also focused on its New Glenn multi-stage rocket for a variety of missions.
On the publicly traded side, Firefly (FLY) is focusing on the new generation of small satellites that are populating LEO. It’s also building orbital transfer vehicles, which will be crucial in the next phase of space development.
Rocket Lab (RKLB) is a New Zealand-based mid-sized rocket company that is second only to SpaceX in its launches. And as a public company, it’s clearly delivering to a growing customer list. A large number of SpaceX launches are for its own Starlink constellation, which distorts its number of revenue-generating launches. RKLB is also well entrenched in Asia and the U.S. Japan uses its rockets for many public and private missions, and the company is now firing from Wallops Island in Virginia as well.
Space systems:
Redwire (RDW) is a newer company with a long history with NASA and other space agencies. It handles everything from solar arrays to 3D printers and critical components for manned and unmanned missions. It also has a growing footprint in Europe in the defense and space sectors.
Northrop Grumman (NOC) is a long-time defense sector “prime” (a prime contractor that then subcontracts to other companies for major projects). And it’s having a renaissance in space. As a matter of fact, it and RKLB just landed a $1.6 billion contract with the Space Development Agency for Tranche 3 work on missile tracking systems. It’s going to be a key space defense company, especially for Golden Dome.
L3Harris (LHX) is a leading defense communications company. Anywhere there’s a need for secure communications, from walkie-talkies to satellite communications, LHX is on the cutting edge of secure tech. And this long history is now having a big impact in space. It’s a key player for Space Force as well as Golden Dome.
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