Artemis II is a useful reminder that, for all the noise around tariffs, rates and geopolitics, some of the most consequential stories of 2026 are unfolding several hundred thousand miles above the rest of them. It is also a reminder that space, as an investable theme, has quietly grown up.
Volatility can be difficult to navigate, but for the space economy, geopolitical tension is proving to be a structural accelerant rather than a headwind. Space is no longer purely a civilian domain. It is the ultimate high ground in national security, underpinning communications, intelligence, surveillance, and precision strike capabilities. That reality is now being priced into national budgets at a scale we have rarely seen.
NATO’s revised spending targets imply close to a doubling of defence expenditure between 2024 and 2035. The U.S. Department of Defence budget trajectory, from $580bn to a $1trn request for this year, is equally striking, with the Golden Dome missile defence program alone representing up to $831bn in incremental spend. These are contracted pipelines flowing directly into companies that sit at the core of the investable space universe.
Beyond defence, the space economy benefits from a second layer of resilience: it is a critical infrastructure and reindustrialisation play, underpinned by strong services revenue streams. Satellite connectivity, earth observation, and positioning services are deeply embedded in the global economy, from supply chain logistics to climate monitoring. Secular demand for these services does not switch off in a downturn, and the combination of defence-linked revenue visibility and mission-critical civilian applications gives the theme durability through the cycle.
Step back from the near-term picture, and three forces are compounding simultaneously to make the space economy one of the most compelling long-term investment themes available to equity investors today. First, the dramatic reduction in the cost of access: launch costs have fallen from approximately $20,000 per kilogram in 2000 (down from $400,000 per kilogram in the Apollo era) to around $2,000 today, a 10x improvement that has fundamentally opened the market to commercial participants. Second, the exponential improvement in satellite capability over the last two decades: 100x better imaging resolution, 10x faster bandwidth, and 100x lower data latency, enabling a wave of new applications. Third, private capital is flooding in, and a burgeoning IPO pipeline is bringing some of the most innovative names to public markets.
The total addressable market is forecast to grow at a 10% CAGR toward $1.8trn, and the opportunities are becoming increasingly diverse. We see the most compelling risk-adjusted returns in launch infrastructure (still the critical bottleneck), satellite broadband connectivity (particularly direct-to-device technology transforming mobile access globally), and defence-adjacent applications. As the domain transitions into an active warfighting frontier, government contracts are driving a structural, high-visibility revenue base.
Capturing that opportunity, however, requires discipline. Space-themed funds have proliferated, but a meaningful proportion of the names within the investable space universe are pre-revenue or loss-making. Active security selection is therefore essential. Disciplined diligence on companies with robust fundamentals, defensible competitive positions, and identifiable catalysts is what separates durable thematic returns from speculative exposure.
A few holdings illustrate the approach. Rocket Lab, a vertically integrated launch provider and satellite manufacturer, addresses both the supply bottleneck in access-to-orbit and the growing demand for small satellite infrastructure, making it the #2 in global launch today. AST SpaceMobile represents our conviction in direct-to-device satellite broadband, a technology that could connect the four billion people currently without reliable mobile coverage using existing handsets. And Avio, as Europe’s only provider of solid rocket motors, sits in a unique part of the value chain for rockets and missiles, benefitting from both defence and commercial customer bases.
The investable public equity universe continues to expand rapidly. Space venture funding is up roughly 20x versus 2016, and over $120bn of market capitalisation has been created from space IPOs alone in the last few years. With a potential SpaceX listing on the horizon and Artemis II’s crew having stepped back onto solid ground, the theme is approaching a defining moment, one that could cement the total addressable market and bring the downstream possibilities of the space economy firmly into the mainstream of public market investing.
