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A
Welcome back to the rundown for another weekend deep dive. Today we are talking about the space economy. 2025 was a big year for the space sector with some space stocks seeing triple digit returns. And the hype is only growing louder as space becomes a bigger part of the tech infrastructure. So in today's episode, we'll break down why the space sector is having a moment right now, what role AI is playing and the four space stocks to watch in 2026. We got a great one for. Let's dive in. Now, before we get into the individual stocks, let's talk about why the entire space sector is on fire right now. Beyond the fact that space is just cool, there are a couple big factors driving investor enthusiasm. The first one is the potential SpaceX IPO. There were reports in early December that SpaceX was looking to IPO in late 2026 at a 1.5 trillion dollar valuation. Space SpaceX founder and CEO Elon Musk pretty much confirmed on X that that was the plan and this would likely be the biggest IPO of all time. What's crazy is that SpaceX was just valued at $400 billion back in the summer of 2025 based on employees selling some stock. Then it was recently reported that SpaceX sold some shares in November at a $800 billion valuation. So their valuation doubled in less than six months. And now they're looking to IPO at $1.5 trillion. So. So the valuation could almost double again. And look, it's easy to see why investors are hyped about SpaceX. SpaceX has a near monopoly on the space economy right now. Just for some context, in 2024, SpaceX was responsible for 84% of US space launches and around 90% of the payload going to space right now is on a SpaceX rocket. Not to mention they also operate thousands of Starlink satellites. So the $1.5 trillion IPO might be justified. And it's this enthusiasm around the SpaceX IPO that has investors re evaluating what other space companies should be valued at. Investors are jumping into lesser known space stocks to find the next SpaceX or at least a potential competitor. Now, One reason that SpaceX is looking to IPO and raise a ton of money is to build AI data centers in space. And that brings me to the next big factor driving up space stocks right now. AI. You know, as we know, big tech companies are spending trillions of dollars to build AI data centers. Well, building these data centers on Earth is challenging. You know, they require a ton of land and energy and Water. According to some research, data centers already consume about 2% of U.S. electricity, and that number is projected to hit 9 to 12% by 2030. So companies like Google, OpenAI, SpaceX and Jeff Bezos Blue Origin are trying to put these AI data centers and in space. It's a wild idea. But the advantage that you have in space is that you would have access to 24. 7 solar power. Another advantage is cooling. See, on Earth, cooling consumes up to 40% of a data center's power. But in the vacuum of space, heat could be released directly through radiation, eliminating the need for energy intensive air conditioning or massive water supplies. Now, personally, I'm still skeptical about the whole data centers in space thing. Like how would you do any maintenance up there if something broke? But according to space reporter Eric Berger, who I interviewed a couple weeks ago on this podcast, he thinks that SpaceX could be launching AI data centers within two years. When you're saying data centers in space, is that like a this decade kind of thing or is that like 10, 20 years down the line?
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B
That's like this, you know, 24 to 36 months thing for SpaceX, I think.
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C
Really?
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Okay, very interesting.
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B
They're going, they're going to move pretty aggressively into this and like I said, they're, they're kind of set up to do it. They're, they already have, have a Starlink version 3 satellite and I think they're going to modify that. And I don't know this for a fact, but I suspect they've already done a lot of that engineering work. And so they can move into production pretty quickly. And I would not be surprised to see some test satellites launch within the next 12 to 24 months.
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A
If AI data centers end up being a viable option, big tech companies could spend a lot of money to make it happen. But it's not just a push from big tech companies contributing to the hype. There's also a push coming from the federal government. So just a few days ago, President Trump signed an executive order called American Space Superiority. The Trump administration wants to cut red tape and funnel investments into the space sector to make sure the US Beats China back to the moon. The current goal is to get an American back on the moon by 2028. So this could mean more government contracts for these space companies. So that's the overall environment pushing up the space sector right now. Now let's talk about the four companies positioned to benefit from it. All right? Now let's talk about the four space stocks to watch in 2026. And these companies cover different parts of the space ecosystem. Let's start with EchoStar. Now, EchoStar isn't really a space company. It's a technically a satellite communications company. They own assets like DishTV, Sling TV and Boost Mobile. But the company has emerged as a way for investors to gain exposure to SpaceX through the public markets. See, back in September, EchoStar sold its wireless spectrum license to SpaceX in a move that some people think means that SpaceX could launch their own mobile service powered by Starlink satellites. The first agreement between EchoStar and SpaceX in September consisted of up to $8.5 billion in cash and up to $8.5 billion In SpaceX stock. And then there was an amendment to this deal in November which tacked on another $2.6 billion in SpaceX stock. So altogether, EchoStar has more than $11 billion in SpaceX stock and, and that's based on a $400 billion valuation for SpaceX. And as I mentioned earlier, SpaceX is now valued at $800 billion. So EchoStar has already seen an ROI on that deal. And as SpaceX's valuation climbs ahead of its IPO, EchoStar stock could climb with it. But that's pretty much the only reason to be invested in EchoStar, because EchoStar's core business, you know, the satellite TV and communications, that's not doing so great. Revenues are actually declining. But if you want exposure, exposure to SpaceX via the public markets before their IPO, investing in EchoStar is the way to do it. Next up, we have Rocket Lab. Now, Rocket Lab is the number two player in private rocket launches after SpaceX. Their Electron rocket has nearly 80 launches since 2018. And on December 22, they completed their 21st launch of 2025, which is a new record for the company. Now, Rocket Lab has tried to separate itself from SpaceX by offering smaller satellite payloads for customers. Now, on top of the launch business, ROCKE also builds satellites for clients, providing a one stop shop from satellite creation all the way to deployment. In fact, Rocket Lab recently won the biggest contract in the company's history from the US Government's Space Development Agency. The agency awarded Rocket Lab a contract worth up to $816 million to build 18 satellites for the Pentagon's missile warning and tracking system. The launches for these satellites are set to begin in 2029. And, and this contract alone represents a massive validation of Rocket Lab's satellite manufacturing capabilities. Now, despite the satellite business making up 70% of the company's revenues, while the launch service only makes up around 30%, the company is doubling down on the launch business. Rocket Lab is building a bigger rocket called Neutron, which is meant to carry heavier payloads, similar to SpaceX's Falcon 9 rocket. The neutron rocket is expected to launch for the first time in Q1 of 2026. So that'll be a big moment for the company. But building the Neutron rocket isn't cheap. The company is still burning a ton of cash. They're not profitable yet, and they won't be for a while. And while Rocket Lab has more than $500 million in backlog launches as of Q3, which is up 56% year over year, they're competing with SpaceX, which has the brand name and also a 15 year head start. Now, the third company on this list is Intuitive Machines. This is the moon play, okay? Intuitive Machines isn't trying to compete with SpaceX when it comes to launches. They're purely focused on the moon. In fact, they use SpaceX's rockets to launch their stuff into space. Intuitive Machines made history in 2024 by becoming the first commercial company to land on the moon. So now they're trying to turn that achievement into a sustainable business. The company is essentially trying to dominate the lunar economy. They manufacture lunar landers, they provide data and communication services for moon missions, and they're also competing for the massive NASA contract to build a lunar terrain vehicle. This contract was supposed to be awarded in Q4 of 2025, but due to some government budget delays, the award announcement has been pushed to early 2026. If intuitive machines wins this contract, it will validate them as the go to company for lunar missions. Add in the fact that the latest executive order from President Trump pushes for Americans to return to the moon by 2028. Intuitive machines could play a big role in that. The risk here though is that Intuitive Machines has had two lunar missions where the lander tipped over on arrival, so they've had some execution issues. Also, if they don't win the lunar terrain vehicle contract from NASA, that could be a big hit, not just financially, but also reputationally as being the go to moon mission company. So a lot is riding on Intuitive Machines winning this contract from NASA. Finally, let's talk about AST Space Mobile. Now, this company went public back in 2021 and it's a rare SPAC success story. AST is building a space based cellular network that connects directly to existing smartphones. Their vision is to provide cellular service using their satellites to existing smartphones. So if you're in a dead zone, your phone would automatically connect to one of AST's massive satellites. The company continues to make progress here. In September of 2024, they launched their first five commercial satellites, dubbed Bluebird 1 through 5. This enabled non continuous coverage across US and other select markets. And it marked a crucial step in achieving its goal of continuous coverage globally. Then in late December, the company launched their largest satellite ever, called Bluebird 6. Now, this satellite is absolutely massive. When it unfolds, it's like 2,400 square feet, which is like the size of a house. And looking ahead, the company expects to launch between 45 and 60 satellites in 2026. Bluebird 7 is expected to launch in early 2026. And then Bluebird 8 through 19 are in various stages of production. The more satellites they have in orbit, the more reliable and continuous the service that AST can provide for network operators. See, AST has agreements with more than 50 mobile network operators all over the world, including AT&T and Verizon in the U.S. in total, they have access to nearly 3 billion subscribers worldwide. And the way it works is that AST provides satellite coverage in dead zones. Through their partnerships, the mobile carriers promote the service to their subscribers. They handle the billing and customer service, and they split the revenue 5050 with AST. Now, AST stock has more than tripled in 2025, but we'll have to see if they can keep that rally going in 2026, because the company is still barely making any revenue. Last quarter they made $14 million, and a quarter before that they just made $1 million. That's not nearly enough for the billions of dollars in cash they are burning to build and launch their satellites. So it might take them a few years before the company starts making meaningful revenue and profit. Not to mention, remember what I said earlier, SpaceX bought the EchoStar wireless spectrums earlier this year, so they're planning to launch a Starlink mobile service pretty soon. And as a direct competitor to ast. And Starlink already has thousands of satellites in space, while AST hasn't even hit double digits yet. So what's my take here? Well, it's hard not to get excited about space. Something that felt like science fiction not too long ago is starting to become reality. And it's great to see all the innovation happening. Costs of launches have dropped 90%. Companies are now building satellites and communication systems and potentially space data centers. So there are real businesses and revenues starting to happen. But lost in all of this hype is that space is really hard. Rockets explode, satellites don't deploy properly, and if that happens, A space stock could lose half its value overnight, and with the valuations already being so frothy for some of these companies, it makes it a very risky investment. A lot of these space companies are barely making revenue. Almost none of them are profitable as they burn through cash to innovate. And I think a key point to remember is that just because a sector is hot right now doesn't make it a good long term investment. I mean, look at what happened with EVs or cannabis stocks. There aren't many winners there. I think the space race will play out the same way. The industry will be dominated by a handful of companies and I feel pretty confident that SpaceX will be one of the winners, probably the biggest winner. But after that, it's hard to say. Some of these companies will literally head to the moon and the others will crash and burn. But if you have the stomach for volatility and a strong belief in a space company, the long term payoff could be absolutely massive. Well, all right guys, that's it for today's weekend Deep dive. Hope you guys enjoyed that one. Let me know in the comments and how you feel about the space sector and if there are certain names, stocks, companies that you're going to be watching closely heading into 2026. By the way, if you enjoyed that episode, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. You know all that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening, listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.
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