In his inauguration speech, President Donald Trump reignited America’s space ambitions with a bold declaration: a mission to Mars.
Promising to plant the Stars and Stripes on the Red Planet, Trump’s vision to invigorate the US space industry and redefine the nation’s role as a leader in extraterrestrial exploration sent share prices of companies like Rocket Lab USA, Intuitive Machines, and Redwire soaring on Wednesday.
Rocket Lab USA was up by more than 28% at 10:34 am, Intuitive Machines was higher by 18.79%, and Redwire was up by 28.5%.
“Above all, my message to Americans today is that it is time for us to once again act with courage, vigor, and the vitality of history’s greatest civilization,” said Trump in a speech from the Capitol.
We will pursue our manifest destiny into the stars, launching American astronauts to plant the Stars and Stripes on the planet Mars.
Potential options for Trump to fulfill his Mars ambition
Trump has a range of options to achieve his Mars mission, including NASA’s Artemis program or a stronger reliance on private enterprises.
According to sources cited by Reuters, NASA’s Artemis program, which was initially focused on returning humans to the moon, will now target Mars as a key milestone.
The program comes with a hefty price tag though, estimated at $100 billion and this traditional government-led approach, while ambitious, faces scrutiny over cost and timeline.
Alternatively, Trump could lean into NASA’s growing partnerships with private space companies.
Firms like SpaceX have already demonstrated success in providing cost-effective solutions for space exploration.
The space giant owned by Elon Musk is poised to play a central role in America’s Mars ambitions.
The company’s valuation has skyrocketed to $350 billion, making it the world’s most valuable private enterprise.
While everyday investors can’t buy SpaceX shares directly, indirect exposure is available through investment trusts like the Scottish Mortgage Investment Trust and Baillie Gifford US Growth Trust, which count SpaceX as a top holding.
According to McKinsey, the global space economy will be worth a massive $1.8trn by 2035, up from $630bn in 2023.
Invezz takes a look at the prospects of the space stocks that were soaring on Tuesday:
Rocket Lab USA (RKLB)
Rocket Lab, known for its specialization in small satellite launches, is gaining traction among investors with its share price up by a whopping 518% in the last year.
Though it is a relatively new entrant to public markets via a SPAC, the company is actively broadening its capabilities, including plans for larger satellite launches and expanding into complementary areas like satellite manufacturing and component production.
Its ultimate aim is to offer an end-to-end solution—designing satellites, facilitating their launch, and providing ongoing monitoring and maintenance in orbit.
Though the space sector comes with inherent risks, Rocket Lab shows promise as a strong contender for investors seeking exposure to the space economy within a diversified portfolio.
Despite being a young and loss-making company, its rapid revenue growth—forecasted at 77% year-over-year to $434 million in 2024—positions it as a potential leader in the sector.
Intuitive Machines (LUNR)
Intuitive Machines has emerged as a standout player in lunar exploration with its stock surging by a massive 698% in the last year.
In February 2024, the company became the first private enterprise to land a spacecraft on the Moon, securing a $4.8 billion NASA contract for a Moon-to-Earth communication system.
The stock carries risks as a loss-making business but the company’s anticipated revenue growth—525% from 2023 to 2026—suggests substantial upside potential.
Redwire (RDW)
As a supplier of advanced space components, Redwire has positioned itself as a key player in the commercial space ecosystem with its share price soaring by 588% in the last year.
It reported a 9.6% revenue increase in the third quarter of 2024, reaching $68.6 million.
The company also revealed strategic growth initiatives, including the acquisition of Harith Systems, anticipated to boost both revenue and capabilities in national security missions.
The full-year revenue forecast was reaffirmed at $310 million, indicating a 27% growth rate.
Analysts say despite operating with a moderate level of debt, Redwire has demonstrated significant market traction.
They anticipate sales growth in the current year, which could further fuel the stock’s upward trajectory.
Additionally, the company is expected to turn profitable this year, potentially marking a pivotal moment for Redwire’s financial health.
ETFs for diversified exposure to space investment
For investors hesitant to bet on individual companies, space-focused ETFs offer diversified exposure to the burgeoning industry.
Popular options include Procure Space (UFO)- a leading space-focused ETF, ARK Space Exploration and Innovation (ARKX), known for its innovative tech focus, and SPDR S&P Kensho Final Frontiers (ROKT) which targets frontier space technologies.
These ETFs provide a balanced approach, allowing investors to capture the growth potential of the space sector while mitigating the risks of betting on a single firm.
Challenges on the horizon
Despite the excitement surrounding Trump’s Mars vision, significant challenges remain.
Critics warn that elements of the Trump agenda, including potential tariffs and immigration restrictions, could disrupt industries critical to the space economy, such as construction and manufacturing.
Moreover, the commercial space sector itself is fraught with risks.
Young companies like Rocket Lab and Intuitive Machines, while promising, remain unproven in the long term.
Space exploration involves high costs, technological challenges, and the possibility of failure, making it a risky bet for investors.
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