10 Best Space Stocks to Buy in 2022 and Beyond

In the past few years, having the best space stocks is becoming more popular in the market. People lie; Elon Musk, Jeff Bezos, and Richard Branson are trying to get to the stars first.

By 2040, the space industry will be worth more than $1 trillion. This shows how vital this new and largely untapped sector is.

This article discusses how to invest in space stocks this year, the best space stocks to watch, and how to invest with competitive commissions.

Why should you buy space stocks?

Morgan Stanley's research shows that by 2040, the global space industry could be worth more than $1 trillion. There has been a vast growth potential in space that hasn't been used yet, like broadband by satellite and sending people to space.

Even though most space companies are owned by private companies and only a few by public companies, governments have only recently started to take space seriously. For example, in 2019, the US made the Space Force the sixth military branch.

NASA didn't send a person to the International Space Station (ISS) until 2020, when they used a rocket made by the private sector for use in business. 

Early investments in space stocks could be interesting for long-term investors willing to take on more risk in newer, more volatile sectors.

10 Best Space Stocks to Buy in 2022 and Beyond

1. Astra Space Inc. (ticker: ASTR) (ticker: ASTR)

Space exploration has always been a problem, but people's efforts to reach the stars keep improving. In February, problems with an Astra rocket caused NASA to lose four satellites. This caused the stock price of the company to drop sharply. 

Randy Baron, portfolio manager at Pinnacle Associates, says, "Astra's recent problems show how hard it is to join the club of launch start-ups that want to make sending things into space cheaper." 

Since the mission failed, the organization has looked into what went wrong and found the problems. It has also made progress in business, announcing a multi-launch contract with a launch services company and a deal to sell engines to a company that designs and makes satellites. 

Its shares are still low, but that could be a good deal if the company meets its goal of launching a new product every day by 2025.

2. Rocket Lab USA (NASDAQ: RKLB)

Since this company is the only other one that regularly launches rockets, most investors don't know about it. Still, after the privately-owned SpaceX, it is the second most profitable space company.

Since its first orbital launch in January 2018, Rocket Lab's Electron launch vehicle has made 23 successful flights and put 109 satellites into orbit. Customers use these satellites to take pictures of Earth, monitor the weather, and track ships. 

Also, it has built three launch sites, one of which is in New Zealand. It was the first launch pad in the country owned by a private company. 

Every 72 hours, a new rocket could be sent into space from there. Its facility in Wallop Islands, Virginia, is only used to launch rockets for the US government.

Rocket Lab went public in August 2017 when it merged with a particular purpose acquisition company (SPAC) and started trading at $11.55 per share the same day. In the next few weeks, it went up to almost $21 per ticket but slowly decreased.

This is partly because earnings before interest, taxes, depreciation, and amortization (EBITDA) grew to more than $25 million in the third quarter, and revenue dropped by half to $5.3 million. 

This was mainly because COVID-19 kept making it hard to launch things in the fourth quarter. In the fourth quarter, only two rockets were launched, but this year, the number of launches will likely increase again.

3. Mynaric AG (MYNA)

There is more to the business of space than just entrepreneurs trying to get as many people to use their launch services as possible. Baron says that the successful software-as-a-service model in the IT sector is giving rise to new business models. 

Some examples are space data as a service, satellites as a service, and ground stations as a service. Baron says that all of these offer the benefits of space without the need for one-time satellite production, government regulation, launch integration, or space data transfer. 

Space as a service will depend on how well the next generation's internet service lets people talk to each other. Baron likes Mynaric because he knows much about communication networks that use lasers.

4. The company Virgin Galactic (NYSE: SPCE)

Virgin Galactic is another space company about to take off. Like Rocket Lab, it has a low valuation, but its investors have been burned more often.

The market has lost faith because the launch has been delayed, and there have been efforts to get more money. But Virgin will be ready to start space tourism soon. Virgin is an exciting stock that investors shouldn't pass up because it serves a small market niche.

Virgin has also launched rockets successfully, though not nearly as often as Rocket Lab and often with long delays. The business thinks, though, that it is ready to start space tourism in the fourth quarter of this year.

Since a seat on one of Virgin's spacecraft costs more than $250,000, it won't replace cars, trains, and planes as most people's preferred way to get around. 

There are more than 2,700 billionaires and more than 60 million millionaires worldwide, so Virgin will have no trouble finding customers.

Last summer, it was found that 600 people had reserved seats on a Virgin flight. This shows that people are very interested in space tourism. 

Analysts think more than 120 billion dollars will be spent on this kind of travel, and Virgin Galactic is the only company that can take advantage of this. By 2023, it is expected that sales will reach $1.7 billion.

Right now, a share of Virgin's stock costs less than $9. Still, it is likely to grow by 250% over the next year, less than the 400% growth that Canaccord Genuity analyst Austin Moeller predicted. 

Now is space tourism, and investors may want to get on board with this stock that could grow.

5. SpaceX

Even though Russia has invaded Ukraine, SpaceX is still building its Starlink satellite internet network. CNBC says that every day, more than 150,000 Ukrainians use the internet service Starlink.

SpaceX is one of the most valuable pre-IPO companies in the world because investors are so hopeful about the company. In October of last year, an insider fully shared transaction showed that the company was worth $100 billion, which was a 33 percent increase from its previous value. But Tesla (TSLA) CEO Elon Musk has no plans to get the word out about the company right now.

Still, SpaceX's Starlink satellite business can go public. SpaceX has launched around 2,000 Starlink satellites to provide high-speed Internet connections. The company is said to have a quarter-million individual and business users.

NASA and the Department of Defence often use Falcon 9 rockets from SpaceX to send things into space. Falcon Heavy has also sent government and commercial items into space.

SpaceX always sends people to the International Space Station in the Crew Dragon capsule. The fastest Dragon flight was the one that took place on April 27 and lasted less than 16 hours. SpaceX is also making the Starship for missions to deep space and people who want to visit space.

6. Trimble

Trimble (TRMB -0.58%), an industrial technology company, may help the space industry advance with its software solutions that let clients use data information to run their operations. It can, for example, use satellite data to help customers get the most out of their physical assets. 

Thus, it focuses on buildings and infrastructure, geospatial data, commodities and utilities, and transportation as its main business areas.

For instance, the company's technology helps farmers get the most out of their crops. As the space sector grows, Trimble's ability to simplify parts of these complicated industries and applications could make it a great fit. 

Due to the immaturity of space, Trimble could be a good company for broad exposure. It is also the largest holding in ARK's ARK Space Travel & Technology ETF, which is focused on space.

7. BlackSky Technology

As technology improves, satellites can send and receive information between space and Earth faster. 

BlackSky Technology (BKSY -9.24%) is a geospatial-data company that is building a network of satellites so that its software-as-a-service platform can quickly monitor the terrain of the Earth. 

US intelligence agencies and businesses in the commodity and insurance industries are some of the people who use it. It is a new company against other satellite providers on the market. 

Still, BlackSky's $2.5 billion transaction pipeline will bring in steady income for the company over the next few years. Investors will somehow want to keep an eye on how things are done to make sure that backlogged work turns into invoiced revenue and that BlackSky's satellite network grows in a good way over time. 

Its market value is only $370 million, so if things go well, there is much to gain.

8. Boeing

Boeing was one of the first companies to work in space. They helped build the rocket that took the Apollo 11 crew to the moon in 1969. Now, the Space Launch System rocket is being made in New Orleans.

The SLS is the world's most powerful rocket and can send astronauts and spacecraft into deep space. The NASA rocket has had trouble with being late and going over budget.

Boeing also made the Starliner spacecraft, which astronauts use to travel between the ISS and Earth. During the testing flight in December 2019, the capsule couldn't get into the correct orbit, and there were also some delays. 

NASA also hires Boeing to build satellites and run the International Space Station. United Launch Alliance, or ULA, is a partnership between Boeing and Lockheed Martin that makes rockets for NASA, Amazon, and other companies.

9. Lockheed Martin Corporation (LMT)

Regarding more prominent companies, Kalkine Group CEO Kunal Sawhney talks about this main defense contractor. 

He says, "Markets change all the time, so smart investors might want to take a chance on businesses that are least affected by supply chain disruptions." 

Large-cap firms usually have the flexibility to deal with these short-term problems because they tend to have a more stable and diversified income stream due to their market dominance. 

In its most recent quarter, Lockheed made almost $15 billion in sales. More than $2.5 billion of that came from its space division. Sawhney says that dividend income is still not better than investing in space stocks. 

Keep in mind that the company has a lot of different ways to make money, so even if the space division does well, other parts of the company may lose money if, for example, the Pentagon's budget is cut.

10. Procure Space ETF Trust II (UFO)

A space-themed exchange-traded fund may be right for you if you want to invest in the space industry but don't want to do the research needed to pick specific stocks. 

"Investing in one Space Company at a time is very risky, and there's a good chance you'll lose money," says Michelle Connell, owner, and president of Portia Capital Management. She suggests putting your money into a group of companies, pointing to UFO. 

Since none of the ETF's top 10 holdings make up more than 6% of its total weight, she says, the odds are high that some of these companies will provide their services and make money for their investors."

How can you buy stocks in space?

Before you buy any space stocks, it's essential to make sure you understand how the companies make money. For most businesses, this is a straightforward thing to do. For example, Starbucks sells coffee, which brings in money. 

Here are some of the best stocks in the coffee industry. But almost no one launches a rocket every day, while most people drink coffee every day.

One important thing to remember is that space companies can make money in a few ways:

1. Putting things into space costs money

2. Getting hired by NASA or the Department of Defence to build rockets, satellites, etc.

3. Charging for services provided by satellites once they are in the air.

   
   

Most of the space companies that come to mind make money by making rocket parts and selling them to NASA. In 2020, NASA had a budget of about $22.7 billion as a point of reference.

Should you buy space stocks? 

Space is fun, but it can also kill you. Most of these stocks are the same way. Many of these businesses have the potential to change the world in extraordinary ways, but there is also a big chance that one or more of them won't get the tech right and never reach their full potential. 

Space stocks could be a good choice for investors who want to take risks. Just be aware of the risks of exploring new areas, and keep space stocks as a small, risky part of an extensive portfolio.

Related questions: FAQs

1. Is space an excellent way to spend money?

Shortly, investing in space will likely affect more than just aerospace and Defence. For example, the IT Hardware and Telecom sectors will likely be affected. Morgan Stanley thinks the global space industry could make more than a trillion dollars by 2040, up from the current $350 billion.

2. Are there stocks in space?

Procure Space ETF (UFO), and ARK Space Exploration ETF are two choices (ARKX). The two funds could buy stocks in companies in the space industry, like Boeing, Airbus (EADSY), and Amazon (AMZN). 

3. What does the coming future hold for the space business?

According to recent research by Morgan Stanley, the global space industry could bring in more than USD1 trillion in revenue by 2040. In 2020, it brought in USD350 billion. Similarly, Mordor Intelligence predicts that the spacecraft market will grow at a compound annual growth rate (CAGR) of more than 8% between 2021 and 2026.

4. How do companies put money into space?

Investing in an exchange-traded fund, or ETF, can be a less risky way to buy space stocks since many of these companies are still young and have uncertain futures. Procure Space ETF (UFO), and the ARK Space Exploration ETF are two of the choices (ARKX). 

5. How do companies in space earn money?

NASA's most recent commercial contracts were SpaceX (Dragon) and Boeing (CST-100). Both companies are getting money from the government to build their private space taxis. The companies must reach specific goals before they can get money.

Final Thoughts

When you invest in space, you get long-term benefits. Most space companies stay private, so only a small number of players are open to the public in this niche area of the market. But, as with any themed investment, there are also many risks to watch out for. 

So, before you invest, you might want to look at any information you can find to see how space exploration could fit into your portfolio.