Space Economy Edge

Space stopped being a science project in 2023. SpaceX collapsed launch costs from $50,000/kg to $2,700/kg, and suddenly every business plan that assumed cheap access to orbit became viable. Rocket Lab just posted $200M in quarterly revenue with a $2.2B backlog and 31 launch contracts signed in a single quarter. Intuitive Machines is guiding $900M to $1B in 2026 revenue — a 5x increase — off NASA lunar delivery contracts and defense awards. Redwire's backlog hit $498M building space infrastructure and manufacturing hardware in orbit. Planet Labs sits on a $900M backlog selling AI-processed satellite imagery to defense and commercial clients. These aren't pitch decks — these are production contracts with the US government and Fortune 500 companies. Three forces are driving this simultaneously. Government spending on space shifted from R&D budgets to production-scale contracts — the Space Development Agency, Artemis moon base, Space Force, and classified programs are all writing checks measured in billions, not millions. AI created commercial demand for space data that didn't exist five years ago — a satellite image is just a picture until machine learning can extract real-time intelligence from it at scale. And a SpaceX IPO expected at a $2 trillion valuation later this year will force every institutional investor to build a space allocation for the first time, repricing every publicly traded space company in the process. Space ETFs like ARKX and UFO spread across 30 to 50 holdings including legacy aerospace conglomerates where space is a single-digit percentage of revenue. This strategy owns 12 pure-play names across three layers: the launch providers and infrastructure builders with multi-billion-dollar backlogs, the satellite data and connectivity companies monetizing space commercially, and the emerging operators that add diversification and upside. When the sector enters a sustained downtrend, the strategy pulls speculative positions to cash and holds the revenue-backed core. Each month it rotates the weakest momentum names out and the strongest in. Before earnings — events that routinely swing space stocks 20 to 30 percent — it trims profitable positions to protect gains. Space is volatile by nature. This strategy was built to thrive in that volatility rather than just absorb it.