The race for access to space has opened up new frontiers of investment opportunities that could yield cosmic returns. It’s hard to imagine, but with the rapid pace of innovation and high public and private interest, areas such as space travel and hypersonic intercontinental travel could become a reality in the near future.
Morgan Stanley estimates that potential revenue from the global space industry could grow 186% from $350 billion in 2020 to more than $1 trillion by 2040. Additionally, potential breakthroughs in aerospace and defense, satellite broadband internet, telecommunications and high-speed cargo delivery could propel the industry to new heights.
Investing in the final frontier
Technological advances and manufacturing innovations over the past decade have redefined what was previously considered only fiction.from artificial intelligence From driverless cars to driverless cars, the technology industry is in the midst of a major evolution. The space industry is no exception.
Since humans first set foot on the moon in 1969, the cost of launching satellites, rockets, and other space artifacts into space has become more affordable. Additionally, the cost of reaching space continues to decline due to a combination of private and public funding and increased competition.
According to 2018 estimates, NASA averaged $152 million per launch.But private companies like SpaceX founded by technology innovators Elon Musk, has developed a spacecraft that can reach orbit at a fraction of the cost. For example, launching SpaceX’s Falcon 9, a reusable rocket, is estimated to cost about $67 million.
Similarly, Blue Origin, the space company founded by Amazon founder Jeff Bezos, has developed commercial reusable space travel rockets and satellites. As a result, the space launch industry has developed into a growing business, with many global companies emerging to secure market leadership.
Changing economics in the space industry, where increased accessibility and affordability could spark a new era of innovation and open the door for investors to back companies that could benefit from this trend. also means
Next destination: Out of this world
Welcome to the era of space travel.
In 2001, American businessman Dennis Tito made headlines when he became the first space traveler to spend nearly eight days aboard the International Space Station. The trip cost him an estimated $20 million.
Since then, multiple civilians, such as Star Trek actor William Shatner, have made pilgrimages to space and spoken of their experiences with awe and admiration. That feeling may give you a foretaste of what’s to come.
As interest in space travel grows, several companies have emerged to capitalize on the trend, including Blue Origin, SpaceX, Virgin Galactic, Axiom Space, Space Perspectives, and Boeing. For example, Blue Origin plans to build an independent space station called Orbital Reef.
Depending on the distance and duration of the trip, costs can range from about $450,000 for a flight on a Virgin Galactic spacecraft to about $55 million for a 10-day trip on an Axiom spacecraft. And demand seems to be increasing. For example, Space Perspective, which charges $125,000 for a six-hour trip to the edge of space, has sold out of available trips by 2025.
Aside from fear of heights, the biggest barrier to entry into space for most people is price. But that could change quickly as competition intensifies. And as demand increases, investment opportunities may also arise.
How is the space economy evolving?
Apart from space travel, Wall Street analysts say expanding access to satellite broadband internet is the most important opportunity area.
In fact, Morgan Stanley estimates that satellite broadband could capture 70% of the space industry’s projected $1 trillion in revenue by 2040. In addition, the investment bank believes that improved access to satellites that support broadband internet could significantly reduce the cost of data.
“The demand for data is growing exponentially, while the cost of accessing space (and by extension, data) has fallen by orders of magnitude,” Morgan Stanley analyst Adam Jonas wrote in a research note. “There is,” he reportedly said. “We believe the greatest opportunities come from bringing internet access to underserved areas of the world, but with the added bandwidth of self-driving cars, the Internet of Things, artificial intelligence, virtual reality, and video. The demand for width will also increase.”
And he’s probably right. The International Energy Agency estimates that over the next 10 years, there could be 145 million electric vehicles on the road, up from just 26 million in 2022, potentially bringing billions of dollars to the global economy. I predict that there will be. Similarly, analysts at market intelligence provider International Data Corporation estimate that global revenue for the AI market could reach $900 billion by 2026. Both high-tech industries rely heavily on data to power their applications.
Investing in space presents long-term opportunities. This niche area of the market remains relatively uncrowded, with only a handful of players available to the public as most space companies remain private. However, like anything else, there are also many risks to be aware of. theme investment. Therefore, before investing, consider reviewing the available information to determine what role space exploration could play in your portfolio.
Editorial Disclaimer: All investors are encouraged to conduct their own independent research on any investment strategy before making any investment decisions. Additionally, investors should note that past performance of an investment product does not guarantee future price appreciation.
