The space race has expanded dramatically since its early days. Although NASA retains its status as a major space agency, no longer are state-sponsored space agencies the only entities heading into orbit. Private-sector companies have arisen to pursue exploration, discovery, and perhaps most importantly, profits.
This issue of Signal from Noise is the first of a two-part series on the current state of space exploration and the private-sector companies involved. We begin by taking a look at launch capability and orbital efforts, with a follow-up to focus on efforts to build space stations, return to the moon, and ultimately send human beings to Mars for exploration.
Getting to Space
Space tourism is still in its infancy, but today, it is technically possible for civilians to go to space — and not just celebrities like Katy Perry, who was gifted an 11-minute Blue Origin flight on April 14 alongside Lauren Sánchez, Jeff Bezos’ then-fiancée. Blue Origin does not disclose how much it would charge someone who isn’t a pop star for a passenger seat on its New Shepard rocket, but Virgin Galactic (SPCE 2.99% ) is currently offering passenger tickets in the neighborhood of $600,000 for a sub-orbital spaceflight. Virgin Galactic customers will reach altitudes of about 62 miles (100 km) — high enough to reach space and achieve a few minutes of weightlessness, but not at a speed or trajectory sufficient to achieve orbit.
Sending astronauts into space has also become increasingly feasible for a greater number of countries, even those who don’t have their own rocket ships. Half a century ago, only major powers like the U.S. and Soviet Union could afford to send astronauts into space, but today even countries without major space programs like Sweden, Italy, and Turkey can send their astronauts to the International Space Station on privately run SpaceX flights organized by Axiom Space (more about this company later), all for a “mere” $55 million. (Phbbbt. Pocket change, right?)
Perhaps most importantly, sending a satellite into space has become significantly less expensive. Per SpaceX, the average per-kilogram launch cost using the space shuttle in the early 1980s was roughly $54,500. Today, Space X charges roughly $1,400 per kilogram, just 2.6% of that earlier price. The sharp decline in launch costs is largely due to the dramatically reduced turnaround time, effort, and cost needed to recover and refurbish the rocket boosters used during launch.
On a per satellite basis, it’s also been beneficial that new technology has enabled the manufacture of significantly smaller, lighter satellites. For example, a GLONASS-M (Russia’s answer to GPS) satellite launched into orbit in 2003 weighed 1,480 kg, or 3,250 lbs. Today, the typical Starlink satellite comes in at 260 kg (576 pounds), and it is common to see much smaller satellites – for instance, CubeSats that measure 10 cm on each side and weigh in at 1.33 kg (< 3 lbs).
SpaceX’s low costs make it an attractive launch option for government entities like NASA and the U.S. Space Force, as well as for rivals building their own satellite constellations, including Amazon’s Project Kuiper, and France’s OneWeb. What’s more, it’s plausible that those prices will continue to fall as improved technologies are developed and as other companies emerge to compete with SpaceX. Jeff Bezos’s Blue Origin already has contracts in place with NASA and the satellite broadband provider AST SpaceMobile (ASTS 18.25% ).
Other private-sector companies offering launch capabilities include Rocket Lab (RKLB 10.80% ), a provider of so-called “small lift” solutions — helping companies launch smaller satellites into orbit and helping them get those satellites operational. In recent years, Rocket Lab has also begun designing and producing its own line of satellites, including a line of stackable flat satellites that make it easier to launch multiple satellites at once. Key to Rocket Lab’s business is its Electron rocket, which features a lightweight, largely 3D-printed, rocket engine that can be manufactured in just 24 hours. The company is also working on a medium-lift reusable launch vehicle currently dubbed the Neutron rocket, scheduled to be unveiled before the end of the year.
Firefly Aerospace (FLY) began as a similar provider of small-lift launch services, but it has become more active in NASA’s Project Artemis, with a contract to launch and deliver cargo to the lunar surface. Despite this, the company maintains a base of private-sector customers, which include Lockheed Martin and L3Harris.
With such competition driving innovation and likely economies of scale taking effect, Citi’s base-case projection (calculated in 2022) is that launch costs could fall to $100 per kg by 2040. Elon Musk has been widely quoted as suggesting that SpaceX could go even further and someday bring the cost down to $10 per kg.
Satellites
The declining rate of launch costs and corresponding increase in number of launches is a large part of why Citi analysts expect “the space economy to generate over $1 trillion in annual sales by 2040.” This estimate also includes “new space applications and industries, such as space-based solar power, space logistics, and Moon/asteroid mining, among others” which could possibly generate $100 billion in annual sales by 2040.
These lower costs have already made it possible for thousands of satellites from at least 105 countries to be launched into orbit – the website Orbiting Now lists 13,357 satellites orbiting our planet. United Nations statistics show that the total number of objects launched into space (which includes not just satellites, but also “probes, lander, rovers, cargo craft, crewed spacecraft, and space stations”) began to spike in 2019, with the total count as of this writing standing at 21,289 and the YTD count at 941.
It’s difficult to think of an aspect of our lives that doesn’t involve satellites. High-resolution imaging satellites help us monitor the planet to glean knowledge about our weather, crops, environment — even our retail shopping habits. The military uses satellites for reconnaissance and surveillance. Satellites are vital to personal, commercial, and military navigation, and of course they form a vital part of broadband communications around the world.
Recent years have seen particularly strong growth in small, mass-produced satellites. SpaceX has a commanding lead in this regard: This year, it has been launching such devices at a rate of almost one every other day, and some estimate that roughly two-thirds of satellites in low-earth orbit (LEO) are SpaceX satellites. On its own behalf, SpaceX launches communications satellites providing civilian broadband (Starlink), military/government communications (Starshield), and Mobile/Internet-of-Things connectivity. Other competitors like Project Kuiper are rising to challenge the company. Not to be ignored are foreign competitors such as France’s OneWeb, China’s SpaceSail and Italy’s Leonardo.
Not to be outdone, the U.S. Space Force wants its own satellites, ones that are not under the control of a private, non-government entity. Efforts to create a so-called mega-constellation of such satellites began in late 2019, with the first satellites launched in 2023. The current satellite count stands at 27 out of 160 planned in the first phase of the program, part of the so-called Proliferated Warfighter Space Architecture.
Unsurprisingly, diversified defense and aerospace contractors like Lockheed Martin (LMT 0.35% ), Northrop Grumman (NOC -0.06% ), General Dynamics (GD 1.07% ), Boeing (BA -0.35% ) and L3Harris Technologies (LHX 1.00% ) are heavily involved with the Space Force satellite initiative. They are nonetheless being joined by smaller, privately held startups like York Space Systems, SpaceX, and Sierra Space in providing various products and services. The PWSA, which began during the first Trump administration, is likely to be folded into Trump’s recently proposed Golden Dome missile defense system.
Other notable satellite companies include:
- Viasat (VSAT 2.62% ): Founded in 1986, Viasat is one of the first satellite companies. It operates high-altitude geostationary satellites that provide ultra-high-capacity, ultrafast communications capabilities. Viasat broadband is used to provide in-flight and broadband Internet connectivity.
- Iridium (IRDM 2.39% ): Iridium operates a global network of LEO communications satellites that primarily provide service to satellite phones and Internet of Things devices such as emergency tracking devices and remote sensors (for instance, on offshore drilling rigs, remote construction projects, cargo trucks and ships, etc.). The company’s satellites act as sort of a mesh network, in which the satellites can communicate and relay signals to each other rather than relying on ground stations.
- Planet Labs (PL 8.16% ): Planet Labs provides a network of Earth-observation satellites, providing imagery to help monitor planetside activities and aid in disaster response, agriculture, weather, and military/intelligence.
- Spire (SPIR 7.61% ): Like Planet Labs, Spire operates a constellation of small satellites that collect information about what’s happening planetside. However, Spire’s satellites monitor radio-frequency data rather than optical images. Spire’s customers include companies in the aviation and shipping industries, as well as in the agricultural, energy, and commodities sectors.
- AST SpaceMobile (ASTS 18.25% ): AST is in the process of deploying an array of large “folding antenna” satellites to help mobile service companies like AT&T provide broadband communications to remote and underserved areas, enabling standard, non-specialized/unmodified smartphones to connect even in places without cell-tower coverage. In this, it is in limited competition with Starlink’s nascent Direct-to-Cell service (which is currently limited to text messaging).
Beyond communications and data-gathering
Research done on the International Space Station (ISS) has supported hopes that the low- or zero-gravity environments of space can enable new forms of manufacturing and thus new products. The low-gravity environment of the ISS has already enabled scientists working with Redwire (RDW 10.59% ) to learn how to 3D-print live human heart and meniscus tissue free of the defects caused by gravity, while technologies developed for ISS work have led to inadvertent advances in robotics, CT scans, portable ultrasounds and yes even winemaking (We were simultaneously disappointed and relieved to learn that this did not involve making space wine.)
Many of the companies pursuing space-based manufacturing are young startups, some yet to go public. Thomas d’Halluin, managing director of Airbus Ventures, the aerospace company’s investment arm, cautioned that “this is about patience. Often, and too often, people want immediate reward. Space is not a place of immediate reward.”
Some of the young companies in this space [pun not intended] include:
- The startup Varda Space Industries has launched multiple small uncrewed satellites to conduct research on microgravity drug manufacturing, hoping that microgravity will enable the synthesis of different crystallized compounds that result in more effective, longer-lasting drugs.
- The British startup Space Forge has partnerships with larger companies like Intuitive Machines (LUNR 11.42% ), Northrop Grumman, and Voyager Space (VOYG 5.15% ) to develop its ForgeStar satellite-based manufacturing platform, hoping to sell microgravity manufacturing as a service. [LUNR and VOYG will be discussed in greater detail in Part II.]
- Flawless Photonics, a Silicon Valley startup, recently used microgravity to manufacture an 11 km (7 mile) length of high-quality ZBLAN optical fiber on the ISS, avoiding the unwanted crystallizations and defects caused by gravity that make planet-side manufacturing problematic. Companies like FOMS (Fiber Optic Manufacturing in Space) Inc. and Redwire are pursuing similar goals. (Defect-free ZBLAN fiber cables could theoretically boast repeater-free data transmission at distances that are 200 times longer than current technologies allow.)
Too much of a good thing?
The sheer number of satellites, going up at an accelerating pace, has created risks and challenges that companies in this industry (as well as their investors) should consider.
The first is that we are running out of spectrum — the specific radio frequencies that satellites use to communicate with the Earth (and each other). Even when using different frequencies, satellites’ transmissions can still interfere with each other, to say nothing of ground-based transmissions. Newer satellite companies like Starlink and Kuiper are chafing at legacy rules that seek to mitigate this risk by limiting transmission angles and power levels, arguing that they are only necessary for older, higher-altitude geosynchronous (stationary relative to the earth) satellites. They assert that the newer low-earth-orbit satellites are capable of mitigating the risk by dynamically adjusting their signals as they traverse the skies. The Trump administration has not commented extensively on the issue, but recent actions suggest that it is more inclined toward the perspective of the newer, non-geosynchronous satellite industry.
The second problem has arisen with a surge in satellite launches: space pollution. Experts warn that the tens of thousands of objects orbiting the planet (spent rocket boosters, defunct satellites, have moved us significantly closer to the tipping point for Kessler Syndrome, in which the density of orbiting objects becomes so high that a slowly cascading chain reaction of collisions emerges, resulting in significant service interruptions to essential satellite-based services. This risk is elevated by the estimated 170 million pieces of debris orbiting the planet, the results of spent rocket boosters, dead satellites, solidified liquids expelled from previous space missions, even chipped paint flecks.
Even tiny pieces of debris can pose a major risk to satellites and spacecraft, and already on multiple occasions, the ISS has needed to move in order to dodge debris. Perhaps more importantly, higher levels of space pollution could potentially threaten the safety of space stations and even make it impossible to launch ships and objects from Earth into outer space.
In multiple countries, entities from the private and public sector are investigating various methods to mitigate or even reverse this problem. Some have proposed physically moving space debris either into a graveyard (high-altitude) orbit or into a path of orbital decay using spacecraft equipped with arms, magnets, or even nets. NASA, the European Space Agency, and China are also working on ground and space-based lasers that can nudge debris into orbital decay. (There is some concern that many of these debris-removal ideas could also be repurposed as weapons used to disrupt satellite-based services, incidentally.) Northrop Grumman, Lockheed Martin, and Airbus are all developing debris-remediation solutions but the consensus opinion appears to see Japan’s Astroscale and Switzerland’s ClearSpace SA, an ESA spinoff, as leaders in this endeavor.
In Part II of this series, we will examine efforts and opportunities related to NASA’s long-term goal of sending human beings to Mars. This includes the intermediate steps of building new space stations and establishing a long-term human presence on the moon. Part II will also provide more context about the impact of the second Trump administration on these efforts thus far.
Space launches might not generate the extensive media coverage that they did in the 1960s, but space exploration remains a risky endeavor for all stakeholders, including investors, albeit with potential rewards.
As always, Signal From Noise should not be used as a source of investment recommendations but rather ideas for further investigation. We encourage you to explore our full Signal From Noise library, which includes deep dives on power-generation stocks, the military drone industry, the presidential effect on markets, the America First trade, ChatGPT’s challenge to Google Search, and the rising wealth of women. You’ll also find a recent update on AI focusing on sovereign AI and AI agents, the TikTok demographic, and weight loss-related investments.
