Space economy: how to invest in a sector worth 1.800 trillion
11 JUN, 2026
The space economy has entered the radar of investors thanks to an isolated event: the listing of SpaceX, the largest IPO in history. But reducing the sector to a single freshman would be a perspective error. Behind the media attention there is a mature, diversified and structurally growing industry, which touches telecommunications, defense, Earth observation and semiconductors.
For those who build portfolios, the relevant question is not whether to buy SpaceX, but how to get a sensible exposure to a wide and heterogeneous supply chain. We have already analyzed the technical effects of the freshman on the indices in the context of the mega-IPO 2026. Here we shift our gaze to the underlying industry: how much it is worth, how it is structured, where the opportunities are and what risks it hides.
How much is the space economy worth
The sector reached a record value of 613 billion dollars in 2024, growing by 7.8% on an annual basis according to the Space Report of the Space Foundation (July 2025). The commercial component accounts for 78% of the total, the government component for the remaining 22%, with the United States leading public spending with about 77 billion.
Long-term projections are what attract capital. The World Economic Forum, together with McKinsey, estimates that the space economy could reach 1.800 trillion dollars by 2035, starting from 630 billion in 2023, with an average annual growth of 9%, almost double the global GDP. The trillion threshold could fall between 2032 and 2034. At these dimensions, the sector would rival the semiconductor industry.
The value chain of the space economy: from launches to services
Understanding where value is generated is the first step to investing wisely. The supply chain is divided into three levels: the upstream (launchers, satellite production, propulsion), the midstream (low, medium and geostationary satellite operators) and the downstream (connectivity, Earth observation, navigation, defense). The collapse of launch costs and the spread of mega-constellations have made previously marginal segments accessible, multiplying sustainable business models.
The most relevant data for a selector concerns the composition of future growth. According to the World Economic Forum, over 60% of the expected expansion by 2035 will come from non-space sectors: supply chain, food, defense, retail and telecommunications that integrate services enabled by space. "Reach" services will exceed 1,000 billion, against the 755 billion of the infrastructure component. The broader exposure, therefore, does not only come from rockets, but from ground applications.
Beyond SpaceX: the investable players of the space economy
Once the supply chain is mapped, the concrete vehicles remain. This is where managers' readings diverge by geography. Rahul Bhushan, Global Head of Index at ARK Invest Europe, views the sector through the lens of American politics and defense spending.
Bhushan identifies in the increase of the US budget for low orbit satellites, risen from 900 million to 13 billion dollars by 2028, a structural catalyst: "These developments represent a significant opportunity for companies that innovate satellite technology, launch systems and space analysis." Among the names mentioned are Iridium Communications, Rocket Lab and Palantir, exposed to government and national security contracts.
The European perspective is opposite and complementary. Tom O'Hara, Investment Director European Equities at GAM, sees value exactly where the market is not looking: "Europe has quietly built a strategic space ecosystem that ranges from launchers to satellites, from semiconductors to communication infrastructures, yet we believe that many of these companies remain undervalued within larger industrial and defense groups." O'Hara cites Avio, STMicroelectronics and the space merger between Airbus, Leonardo and Thales, with about 6.5 billion euros in revenue.
The valuation gap is clear: Avio trades at about 2.6x EV/sales estimated 2027, against the 70.4x of Rocket Lab, the first component of the VanEck ETF. On operators like SES and Eutelsat, O'Hara (GAM) argues that they can be considered "increasingly as strategic infrastructure assets rather than traditional telecommunications companies", thanks to their role in European communication sovereignty.
The risks of the space economy: valuations, concentration and regulation
The enthusiasm hides specific risks that the selector must make explicit. The first is the valuation: many listed US companies trade at multiples incompatible with their current profitability, discounting growth yet to be demonstrated. The dispersion between the 70.4x of Rocket Lab and the 2.6x of Avio signals how much the price, rather than the business, drives today's performance. A rotation of sentiment can hit the most expensive stocks hard.
The second risk is concentration. The sector heavily depends on a few players and, in the US case, on a single entrepreneurial figure, with significant governance implications. The third is dependence on government contracts and the regulatory framework: much of the cited revenues, from pLEO satellites to analysis platforms, rely on public budgets subject to political and budget cycles.
Finally, the capital cycles. Launchers and constellations require substantial investments and long times before generating cash flows, while the geopolitical competition, particularly with China, adds uncertainty to the demand trajectory. These are factors that reward active selection and penalize indiscriminate exposure to the theme.
Conclusion
The space economy is a real investment class, not a narrative bet. The listing of SpaceX has accelerated its recognition, but the value is distributed along a wide supply chain, with very different risk profiles and evaluations between the United States and Europe. For the portfolio, the strategic question is not "buy space", but choose with discipline which part of space really rewards the risk.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax or legal advice, nor an offer to buy or sell financial instruments. The opinions reflect the evaluations of the respective management companies at the date of publication and are subject to change without notice. Past performance is not a guarantee of future results. Emerging market debt involves specific risks: currency volatility, geopolitical risk, liquidity risk, sovereign and corporate credit risk.
