BIT Research Report | The New Space Economy: From "Sci-Fi" to "Hard Currency"
- Core Thesis: The space economy is transitioning from government-led to commercially profitable. Having already reached a global scale of $626 billion in 2025, SpaceX's IPO will serve as a catalyst for the industry. However, current valuations for some companies are high, requiring investors to differentiate between various tracks and risks.
- Key Elements:
- The five core tracks of the space economy are launch services, satellite communications, Earth observation, national defense & security, and space infrastructure. Among these, defense & security carries the lowest risk, while space infrastructure is extremely high-risk.
- Reusable rocket technology has reduced orbital launch costs by 95%. The Falcon 9 has achieved over 640 launches, becoming the core driver of cost reduction in the industry.
- SpaceX filed for an IPO in April 2026 with a target valuation of $1.75 trillion. Starlink has over 10 million users and a profit margin of 63%, but its nearly 88x forward price-to-sales ratio indicates a risk of valuation bubble.
- Rocket Lab (RKLB) reported revenue of $602 million in 2025 with an order backlog of $1.85 billion, but its free cash flow is negative. The Neutron rocket is its key to breaking the monopoly.
- Planet Labs (PL) posted FY2026 revenue of $307.7 million, with recurring revenue accounting for 98%, showcasing typical characteristics of a "software-defined" space company.
- Among space-themed ETFs, UFO has returned +153% over one year and offers the highest purity, while conservative investors are better suited for ITA (iShares Aerospace & Defense), which has lower volatility.
Key Data: $626 billion market size in 2025 · UFO ETF annual return +153% · SpaceX target valuation $1.75 trillion · RKLB one-year return +250%
1. Core Investment: Five Gold Mines of the Space Economy
Don't lump all "spacefaring" companies together. Before researching individual stocks, understanding the sector's logic is more important than stock picking:
1. Launch Services — "Space Courier"
Business Model: Delivers payloads into orbit, charging per launch.
Risk Level: High (risk of engineering failure; a single failure can impact contracts for years).
Representative Companies: SpaceX (monopoly position), Rocket Lab (RKLB).
2. Satellite Communications & Broadband (SatCom) — "Orbital Operators"
Business Model: Stable subscription model, providing broadband connectivity globally, excellent cash flow.
Risk Level: Medium (high upfront capital expenditure, but deep moats).
Representative Companies: SpaceX (Starlink), AST SpaceMobile (ASTS).
3. Earth Observation — "Space Big Data SaaS"
Business Model: Daily imaging and data sales, serving governments, agriculture, and defense.
Risk Level: Low (high revenue expectations, extremely low marginal costs).
Representative Companies: Planet Labs (PL).
4. Defense & Security — "Hard Currency Infrastructure"
Business Model: Long-term government contracts, providing missile warning, GPS, and military satellites.
Risk Level: Very Low (strong safe-haven attributes, supported by national strategies).
Representative Companies: LMT, NOC, LHX.
5. Space Infrastructure — "Long-term Exploration"
Business Model: Building forward-looking hardware like lunar landers and in-orbit services.
Risk Level: Extremely High (currently in a cash-burning phase, dependent on government funding timelines).
Representative Companies: Intuitive Machines (LUNR).
2. Why the Space Sector is Having Its Moment in the Spotlight
Space has transitioned from an exclusive government domain to a commercially viable sector. One key engineering breakthrough has reduced the cost of reaching orbit by 95%.
Scale Explosion: The global space economy has reached $626 billion. McKinsey predicts it will reach $1.8 trillion by 2035.
Core Driver: Reusable Rockets - The Falcon 9 had completed over 640 launches by April 2026, fundamentally altering the economic model.
Demand for Satellite Broadband: 3 billion people globally lack internet access; satellite constellations are the only viable large-scale coverage solution.
SpaceX IPO Effect: The IPO filing in April 2026 has focused the attention of mainstream institutional investors on this sector.
3. SpaceX IPO: What It Is and Why It Matters
Filed confidentially on April 1, 2026, aiming for one of the largest IPOs in history on the Nasdaq.
Financial Performance: Total revenue of approximately $150-160 billion in 2025, with EBITDA around $80 billion. Starlink surpassed 10 million global users, boasting a 63% profit margin.
Valuation Warning: A $1.75 trillion valuation implies a forward Price-to-Sales (P/S) ratio of ~87x. This premium reflects extreme market optimism for Starship and xAI integration.
DXYZ Specific Warning: Destiny Tech100 (DXYZ) has long traded at a ~50% premium to its NAV. Once SpaceX is publicly listed, DXYZ's scarcity premium will vanish, potentially leading to significant selling pressure.
4. Deep Dive into Key Publicly Listed Companies
Rocket Lab (RKLB):
2025 revenue of $602 million (+38%), with a backlog of $1.85 billion (+73%).
Key Point: The Neutron rocket is central to its competitive strategy. Currently has negative free cash flow of -$322 million, still in a capital investment phase.
AST SpaceMobile (ASTS):
FY2026 revenue guidance of $150 million to $200 million, with partners like AT&T and Vodafone.
Key Point: Validating direct-to-device satellite connectivity for standard smartphones.
Planet Labs (PL):
FY2026 revenue hit a record high of $307.7 million, with recurring revenue accounting for 98%.
Key Point: A quintessential software-driven space company with a highly stable government contract base.
Intuitive Machines (LUNR):
Provides transportation for NASA's Artemis program, with a backlog of $943 million.
Key Point: Stock price is highly volatile, fluctuating primarily with NASA mission milestones.
5. Allocation Tools: Space-Themed ETFs
UFO (Procure Space ETF): Highest purity. One-year return +153%. Expense ratio 0.94%. Expected to hold SpaceX as a core position post-IPO.
ARKX (ARK Space Exploration): Actively managed. One-year return +74.4%. Focuses more on the intersection of space with AI and big data.
ITA (iShares Aerospace & Defense): Conservative choice. Primarily holds traditional defense giants like Boeing and Lockheed Martin, with significantly lower volatility.
6. Investment Risks & Key Catalysts for 2026
Core Risks
- Valuation Bubbles: RKLB and SpaceX trade at extremely high revenue multiples, with positive factors already priced in.
- Equity Dilution: Most early-stage companies raise funds by issuing new shares, diluting existing shareholder equity.
- Lock-up Periods: The expiry of post-IPO lock-up periods for SpaceX (Sept-Dec 2026) could lead to additional market supply.
Key Catalysts for 2026
SpaceX S-1 Prospectus: Will publicly disclose audited financial statements and detailed Starlink data for the first time.
Neutron Rocket Development: Can RKLB truly break SpaceX's monopoly in the medium-to-heavy payload market?
ASTS Revenue Ramp: Validating the commercial viability of the direct-to-device business model.
Summary:
- Investors with a more conservative risk profile typically gain exposure to this sector through broad ETFs or large, established defense companies before considering individual pure-play space companies.
- Investors with a higher tolerance for volatility and a longer time horizon can delve into individual stocks like Rocket Lab or AST SpaceMobile, but must fully understand that the potential for greater upside comes with the potential for greater downside.
- Investors focused on the speculative end of the sector, researching lunar infrastructure or early-stage launch companies, are essentially making long-term judgments about which companies will still be operating and growing five to ten years from now. This requires a completely different analytical framework than researching profitable, cash-flow-rich mature companies.
- Investors who encounter vehicles like DXYZ should spend time understanding the structure of the instrument they are researching before drawing any conclusions. In certain structures, the market price of a financial instrument and the value of its underlying assets can diverge significantly.
Before researching specific companies, identify which of the above investor types you belong to. This will help ensure you are focusing on the right information and asking the right questions.
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Data as of April 2026. Sources include Novaspace (12th Edition Space Economy Report and 24th Edition Government Space Programs Report), the Space Foundation (Q2 2025 Report), and industry data from OrbitalRadar.com. Company fundamentals and market analysis incorporate in-depth reports from 24/7 Wall St., The Motley Fool, Seeking Alpha, Morningstar, and Blockonomi on Rocket Lab, SpaceX, and DXYZ; financial forecasts and launch records reference Quilty Space’s Starlink projections, Wikipedia’s Falcon and Electron launch logs, and official earnings reports from Rocket Lab and Planet Labs. Additionally, the report adopts the latest information on the space sector, ETF trends, and Starlink financial data from WTOP, ETF Trends, Procure ETFs, and TradingKey.
Disclaimer: This report is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future returns. Investing involves risks, including the potential loss of principal. Clients should consult a qualified financial advisor before making any investment decisions.
