Space has gone from a government monopoly to forgotten to a rediscovered investment theme. 

First, some history. The first space economy was financed almost entirely by sovereign balance sheets. According to the Planetary Society, at its peak in 1966, NASA consumed 4.4% of the U.S. federal budget—roughly $60 billion in today's dollars for the Apollo program alone. The private sector was a contractor, building hardware on cost-plus contracts where the government absorbed all financial risk. The total cost of the Apollo program was approximately $25.8 billion—or about $309 billion in today's money.

By the late 1970s, NASA's budget had fallen to less than 1% of federal spending. The Reagan era brought the Space Shuttle, a technological marvel that was also heavily government-subsidized and crowded out private investment.

The 1990s offered a preview of what private space could look like. Telecom companies poured billions into low-Earth orbit constellation projects. By 1998, according to the US Department of Transportation, commercial launches outnumbered government launches globally for the first time in history. But the bursting of the tech bubble stopped progress. Terrestrial cell networks caught up faster than projected, and several companies went bankrupt, setting private space investment back years. The technology was real, but the market timing and business models were not quite right. 

The next phase, the 2000s to 2010s, came from Silicon Valley fortunes willing to absorb losses. Elon Musk founded SpaceX in 2002 and Jeff Bezos funded Blue Origin. A pivotal moment came in 2015, when SpaceX successfully landed the first Falcon 9 booster after an orbital mission, proving that rockets could be reused like airplanes rather than discarded. The implications were huge: according to Orbital Intel, a Falcon 9 launch that once cost $60 million fell below $30 million almost immediately. Today, a rideshare slot on a Falcon 9 costs less than $1,500 per kilogram to orbit—a 95% reduction from the Space Shuttle era.

That cost collapse formed a foundation for the modern space economy. We are now in the third distinct capex wave, and it's the largest by far in global economic terms.

Per the Space Foundation, the global space economy reached approximately $630 billion in 2025, with private companies accounting for 78% of that activity. Government spending hit a record $138 billion, but it's no longer the dominant driver.

Two spending cycles are running simultaneously and reinforcing each other:

1. Commercial Connectivity Infrastructure. SpaceX's Starlink represents the largest private infrastructure project in space history. Amazon's Project Kuiper, its answer to Starlink, has committed billions too. The business model that failed in 1999 (satellite internet) is working in 2026, because launch costs are 95% lower and the satellites are fundamentally better.

2. The Defense Ramp. The US Space Force budget for FY2026 reached approximately $40 billion, and the administration has requested $71 billion for FY2027, a near-doubling driven largely by the "Golden Dome" missile defense architecture. This program calls for a sprawling constellation of space-based sensors and interceptors to detect and destroy ballistic and hypersonic missiles. Twelve companies, including SpaceX, Anduril, and Lockheed Martin, are reportedly competing for the contracts to build it, with initial operational capability targeted for mid-2028.

Together, these two forces are creating a potentially multi-decade spending cycle. The projection: the global space economy reaches $1.8 trillion by 2035. That's roughly a 3x from today in under a decade.

For investors thinking about the space theme with discipline, the landscape can be considered in two distinct areas: higher risk, higher growth, and defense-focused.

• Higher risk/higher growth including companies such as:

  • Rocket Lab (RKLB), competing with Falcon 9, 

  • Intuitive Machines (LUNR), a leading contractor for NASA's Artemis lunar cargo missions and a potential play on the lunar economy and 

  • Planet Labs (PL) which operates the largest constellation of Earth-imaging satellites and layering AI-driven analytics on top of the raw imagery 

  • And of course the recently offered SpaceX.

• The defense-focused names include:

  • L3Harris (LHX), heavily positioned in the Space Development Agency's missile-tracking layer,

  • Northrop Grumman (NOC), the primary contractor for the SLS booster (Artemis program) and deep in missile defense, and 

  • Kratos Defense (KTOS) which builds ground-system hardware for satellites and "attritable" (affordable, expendable) drones for the Space Force

The current wave is different in three structural ways: launch costs are no longer the barrier, the government is a customer, not the only investor, and it benefits from the compounding layer of data and AI.

The risks are real. Execution risk on rockets is high, so potential earnings are at risk too. And government investments can change with shifting politics.

But for investors with a longer time horizon, the space economy may offer a secular growth theme backed by both private innovation and potentially sovereign defense budgets.