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Space: The Frontier with the Deepest Investment Potential?

Jon Brown Jon Brown, Stockhouse
0 Comments| 5 days ago

Space - it has always been the ultimate frontier from science to storytelling and this is especially true for capital markets.

There is a lot going on up among the stars. The global space industry is estimated to be worth $350 billion and by 2040, Morgan Stanley (NYSE:MS) projects that it could be generating revenue of more than $1 trillion.

Satellite broadband internet access providers and ancillary services are expected to see the most significant opportunities in the near and medium term. Meanwhile, second-order impacts are the biggest driver heading to 2040, though it generates virtually no revenue now. Second-order impacts are how internet companies will benefit from the increasing efficiency and decreasing cost of satellites. SpaceX is building the largest ever satellite network, boasting a constellation of more than 4,000 satellites to deliver broadband speeds comparable to fibre optic networks. Cheaper launching costs is also another reason more companies are gravitating toward this market.

(Image via Virgin Galactic.)

Beyond the near-term potential, there are many other opportunities that await across the cosmos. Earlier this week, aerospace company Boeing (NYSE: BA) announced that it will invest $20 million into space tourism company Virgin Galactic to help develop the technologies needed to make hypersonic air travel possible. Virgin Galactic is a spaceflight company within the Virgin Group and has invested $1 billion to build reusable human spaceflight systems with the intent to significantly grow the number of people who can experience and utilize space travel. Its intent is to become the first human spaceflight company to go public and list on the New York Stock Exchange by the end of the year. Both companies also plan to explore developing a vehicle capable of flying around the world at hypersonic speeds. A business jet from Los Angeles to Tokyo would take 11 hours, a hypersonic jet would make the trip in two hours, according to Virgin Galactic.

Talk of investing into space may be met with skepticism from more seasoned investors or those looking for nearer-term gains, however there are a growing number of large firms, both private and public investing into developing this market. In its 2019 assessment on global activity in this market, the Space Foundation noted that the US government is increasing its investment into space. The United States is always looking to secure its leadership in tech, while assessing opportunities and vulnerabilities in surveillance, mission deployment, cyber, and artificial intelligence.

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