How to Profit From the Space Race 2.0

Michael Robinson

Friday, January 27, 2023

Think we're not already in the middle of the "Space Race 2.0"? You're dreaming...

And here's some data that'll wake you up:

Five years ago, there were fewer than 90 launches into outer space around the world. That's between governments and businesses.

But last year, according to astrophysicist Jonathan McDowell, that number more than doubled. And this year, the trend continues to head skyward.

Privately held SpaceX intends to launch a stunning 100 orbital flights. And though it won't match the sheer output of SpaceX, Boeing (BA) is set to launch its Strainer spacecraft that can transport seven people.

Is that enough of a wake-up call for you? How about this...

Deutsche Bank forecasts that just the launch sector within the outer space market will be worth $35 billion by 2030. When compared with last year's figure, that's an increase of more than 337%!

The question is: How do you know which launch-focused company to invest in? Which one will achieve the most success?

As it happens, you don't have to pick. I'll show you a way to invest in the entire space industry with just one move.

A Trillion-Dollar Industry

I mentioned a $35 billion figure earlier. But consider this: Analysts at Citi (C) and Morgan Stanley (MS) project that space will become a trillion-dollar industry by 2040.

To be clear, that includes the entire industry. We're talking launches, spacecraft construction, satellites, sensors, software, rovers, and much more.

It's a comprehensive list, to be sure. The U.S. lunar program of the late 1960s and '70s pales in comparison.

You see, back then, America really only had one main competitor – the Soviet Union. Today, while Russia and China might be the only ones planning human spaceflight, more than a dozen countries have created launch programs.

Simply put, outer space has become a global phenomenon. And it's why I keep saying that the Space Race 2.0 is an unstoppable trend.

With that in mind, I think it's best to make a broad investment, one that covers as much of the entire industry as possible. After all, it's incredibly difficult to forecast which single space-launch company or satellite manufacturer will strike it rich. So why not invest in as many as we can?

Our Investment Opportunity

That's the opportunity you have with the ARK Space Exploration & Innovation ETF (BATS: ARKX).

Inside this exchange-traded fund ("ETF") are more than three dozen companies, including giants like Lockheed Martin (LMT), Amazon (AMZN), and Alphabet (GOOGL). All three are involved in launches, satellites, and space-related services.

There are also some surprises, like storied agriculture company Deere (DE), better known as "John Deere." Deere is involved in precision agriculture that, perhaps surprisingly, relies on satellite technology. And other holdings include Joby Aviation (JOBY), the leading company in new electric-powered air taxis, and Iridium Communications (IRDM), which operates a network of 66 satellites providing voice and data communications.

But that's not all...

Wait, There's More

ARKX also holds a number of lesser-known firms that have great sales, cash flow, and profits. For instance, you'll find:

  • AeroVironment (AVAV), a $2 billion firm behind the unmanned Ingenuity drone helicopter NASA is flying on Mars. This drone was only meant to fly five times for up to 90 seconds. But it's managed a whopping 36 flights to date. No wonder AeroVironment is a leading drone manufacturer for farmers, wireless companies, and the Pentagon.
  • Teradyne (TER) is a $15 billion robotics leader targeting machines known as "cobots" that are designed to work with humans. The company also provides testing equipment and automation technology that allows Samsung, Intel (INTC), IBM (IBM), and others to produce millions of tiny chipsets without sacrificing quality.
  • ANSYS (ANSS) is a $32 billion engineering simulation and software company that's outer space's "traffic cop." You see, since the Soviet Union launched Sputnik 1 in 1957, humans have put nearly 10,000 artificial satellites into space. And while space is huge, the amount of usable space for satellites in Earth's orbit is surprisingly limited. That makes ANSYS, which now owns a leading tracker and forecaster of satellite and space debris orbits, more valuable than ever.
  • L3Harris (LHX) is one of the most well-respected electronics and communications firms in the U.S. It's also a major player in secure communications for the military, intelligence, and space sectors. This company recently announced it's buying Aerojet Rocketdyne (AJRD), the nation's largest maker of rocket propulsion systems.

This Sounds Familiar

If this fund sounds familiar, that might be because it's run by Cathie Wood. She's a brilliant fund manager overseeing some of the best tech-focused ETFs available on the market.

Admittedly, all of those funds, including ARKX, have been hammered over the last year, falling more than the broad market. But don't worry: ARKX is greatly oversold and is already making a nice rebound.

Investing in this fund is my strategy for profiting from the Space Race 2.0. And if you're a "Pro" subscriber, I'll show you how to position your investment to potentially earn returns of nearly 400%!



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Cheers and Good Investing,

Chief Investment Officer
Trend Trader Daily

Tags: investing space-race