With a new influx of commercial players and partnerships between the private sector and government, the space industry has taken off. So much so in fact, Bank of America Merrill Lynch has estimated that the industry will grow by eight times in the next three decades, and will be worth at least $2.7 Trillion.
Yes, that’s a “T.”
The result will be, as Bank of America has dubbed it in their report released on October 31, a “Space Age 2.0.” “We are entering an exciting era in space where we expect more advances in the next few decades than throughout human history,” the firm wrote in the report.
Bank of America joins Morgan Stanley and other Wall Street investment banks bullish on the off-world industry as the cost of space access is plummeting with the advent of reusable rockets by SpaceX, the growth of private ownership in the market, investments by more than 80 counties, and the rapidly shrinking launch costs from vehicles from companies like Rocket Lab and Vector.
While the firm warned that this is a market where companies have historically had trouble turning a profit, they did say the “for investors with a truly long-term time horizon, we see it as one of the final frontiers of investing.”
The report identified five “pure play” companies, all of which work with satellites, with two of the companies U.S.-based, ViaSat (NASDAQ: VSAT) and Intelsat SA (NYSE: I). Other opportunities range from traditional aerospace and defense companies—Boeing (NYSE: BA), Lockheed Martin (NYSE: LMT), and Northrop Grumman (NYSE: NOC)—to technology giants like Facebook (NASDAQ: FB), Google (NASDAQ: GOOG, GOOGL), and Microsoft (NASDAQ: MSFT).
Morgan Stanley’s report from early October stressed that current investing opportunities are somewhat limited as many commercial space companies are not yet public and may not be for years. However, they do recommend that investors focus on public companies that will benefit from the growth of internet networks using satellites, like Facebook and Google, as they are currently some of the biggest drivers of the space industry. Adam Jonas, a Morgan Stanley analyst, told Business Insider that $725 billion could come from “social media, search, and e-commerce companies” alone.
Space is “a hotbed for disruptive technologies” Bank of America said. The benefit from satellites today is nearly immeasurable, and massive projects like the International Space Station or the Stratolaunch aircraft are only possible through the space industry’s out of this world (sorry again) growth.