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There’s a lot happening in space these days: NASA’s ambitious moon mission, data centers in orbit, satellite cell service straight to your smartphone and the list goes on.
There are plenty of reasons to think that future business prospects, new technology and geopolitical shifts will propel the industry to new heights. The renewed optimism of satellite CEOs was clear when I attended SatShow 2026, the industry’s leading conference in Washington, D.C. The mood was in stark contrast to the last few years, when SpaceX’s disruptive force and other business woes were driving the conversations.
SpaceX is still disrupting things as a de facto monopoly, but the entire industry is growing fast and there’s more room for other players to benefit. The global space economy will reach $1 trillion in 2034, up from $626 billion in 2025, according to consulting firm Novaspace. The U.S., led by SpaceX launching 85% of spacecraft into orbit and its Starlink Internet service, reaps most of the business.
One metric that drives home the point is the surge in launch activity last year, which will continue this year and beyond. 2025 saw 325 orbital rocket launches and 4,544 spacecraft (mostly satellites) deployed, according to a global launch report by BryceTech. That marked a 25% year-over-year increase in launches and a 54% increase in spacecraft. The U.S. had 193 launches in 2025, with 165 from SpaceX alone. Second-place China registered 93.
Geopolitics are lifting space revenues
Geopolitical turmoil is spurring growth with higher defense spending and national projects for space. “Now, just given the geopolitical realities, countries are realizing that they need more than what they were buying before,” said Mark Dankberg, CEO of Viasat, at SatShow. Others in the industry agreed. “The geopolitical developments that we’re seeing out there are creating far and away some of the biggest commercial opportunities for Telesat and, I’ll say, the rest of us,” said Daniel Goldberg, CEO of Telesat.
The U.S., European countries, China and other nations want to buy more space services and own and operate their own sovereign satellites. The Pentagon has upped space outlays and will continue the spending spree. For example, the Trump administration beefed up Space Force funding for 2026 and is now requesting $71 billion for the agency in its 2027 budget proposal, an 80% jump compared with 2026.
The wars in Ukraine, Israel and Iran show how space tech is crucial for missile warning and tracking, communications, surveillance, drone and vehicle connectivity, and more. In Ukraine, SpaceX’s ability to deliver high-speed satellite internet to a small antenna on the battlefield has been pivotal. “Starlink is functionally embedded into government infrastructure,” said Kimberly Burke, director of government affairs at Quilty Space, in a presentation late last year. SpaceX can expect more Pentagon contracts for its launch business, too.
“That said, the Pentagon is still wired for diversity,” said Burke. Recent large U.S. military contracts have gone to Rocket Lab, HawkEye 360, York Space Systems, Sierra Space, Lockheed Martin, L3Harris and many others. Though details aren’t clear, a missile defense system known as Golden Dome, costing $185 billion-plus, also catches much industry attention.
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SpaceX going public ignites investing interest
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Investing in the space sector is already heating up this year, and SpaceX’s splashy upcoming initial public offering (IPO) will supercharge interest. The 24-year-old company is seeking a valuation of more than $2 trillion and aiming to raise about $75 billion.
In 2025, revenue was reportedly about $18 billion. Most revenue comes from Starlink, its speedy, space-based internet service, which has more than 10 million residential subscribers, hundreds of thousands of business subscribers and hefty defense contracts.
Upcoming risky bets include launching artificial intelligence data centers into orbit, building a full-fledged computer chip factory and getting Starship, the largest rocket ever, ready for commercial missions. SpaceX won’t have trouble spending tens of billions of dollars quickly to pursue its mission. In the near term, the top focus will be on growing its Starlink business.
SpaceX’s stock listing will bring a new wave of capital to the entire sector, including from a flood of retail investors. Investors in the space sector are bullish about SpaceX’s unprecedented stock listing. The IPO is an “inflection point” for the space industry, said Michael Mealling, general partner at Starbridge Venture Capital, at SatShow. Mark Boggett, CEO of Seraphim Space, said it will pull up valuations across the entire sector.
The heightened attention means that more Wall Street analysts will start covering the sector as space companies are included in more stock funds and more space companies go public. Investors should know that space stocks can be risky, requiring due diligence, and that the frenzy among investors could outpace the reality of individual businesses.
“I am a little concerned about public market investors looking at the space sector and not understanding the level of risk,” said Mealling. “Not every company that goes public is a good company.” Mealling also said that having lived through the dot-com bubble of the late 1990s, “I hope we don’t replicate that.”
Upcoming battle of the two megaconstellations
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As SpaceX prepares to go public, it’s just starting to see a new, fierce competitor in Amazon. Amazon’s growing constellation, Leo, will battle Starlink for customers in consumer, government and business internet markets. Starlink has some major advantages, including a huge head start, with 8,500 operational satellites, and its own rockets to launch them. Amazon is in the early stages of building a commercial business, with more than 200 satellites in orbit so far.
“The signals we get from prospective customers are incredibly strong,” said Chris Weber, vice president at Amazon Leo, at the conference. Amazon is touting how it can integrate Leo with its cloud computing platform AWS. For security-minded businesses, a compelling feature is that data can travel from space to Amazon’s cloud without ever touching the internet. Besides standalone web plans, Amazon could bundle satellite service with Prime, use it to track its vast logistics network, support autonomous drone deliveries and more, according to Neil Shah, an analyst at Counterpoint.
Amazon’s space mission has taken eight years and $10 billion, and that was before the company recently acquired satellite company Globalstar for $11.6 billion to expand its network and land Apple as a customer. The competition with SpaceX spells lower prices, faster speeds and more data for consumers and businesses.
Other constellations in operation or coming soon include Eutelsat’s OneWeb, Telesat Lightspeed, Blue Origin’s TeraWave and Logos Space’s. Sovereign constellations include the European Union’s IRIS2 and China’s Guowang. The tens of thousands of planned satellites mean more demand for rockets, especially for SpaceX, which has a packed launch manifest through 2028.
Other launch vendors poised to benefit include Rocket Lab, Arianespace, Blue Origin, United Launch Alliance and Firefly Aerospace. But they don’t even come close to SpaceX’s ability to reliably launch its Falcon 9. Satellite companies, including Amazon, are desperate for other rockets to start flying regularly so SpaceX doesn’t control launch pricing. Some see Blue Origin’s reusable heavy launcher, New Glenn, as a viable option in the coming years, though the rocket company only had two launches last year. Rocket Lab ranked second in commercial launches last year with 18.
Other space trends to watch
Many companies are excited about bringing satellite connectivity directly to smartphones, no extra hardware required. The direct-to-device (D2D) service is now available on newer smartphones for sending text messages, reaching emergency services and using some low-data apps, such as mapping. The feature is useful in spots without cell service, but the industry hopes it will grow into a massive new business. SpaceX and Amazon are both spending billions of dollars to pursue D2D and will be the two leaders. Other companies working on the tech include AST SpaceMobile, Lynk Global, MDA Space and SES.
Artificial intelligence tools are exploding on the scene to analyze Earth imagery, manage airwave interference, automate in-orbit navigation, answer questions and more. Companies such as HawkEye 360 have built their own AI models from years of proprietary data to better track and identify vessels at sea. Earth imaging leader Planet says AI on the ground can parse terabytes of data and AI in space can autonomously spot methane leaks from pipelines or identify airplanes. NVIDIA AI chips are being used on satellites to process info before it hits the ground.
There’s no shortage of companies with exciting tech. Xona Space Systems is developing an alternative to GPS in low-earth orbit with centimeter-level accuracy. ISI is using AI to analyze geospatial imagery. K2 Space is working on high-power satellites for data centers in orbit. Starcloud is building space data centers and has already launched AI satellites. ICEYE uses radar pulses to produce high-resolution imagery, even through clouds and at night. SpinLaunch has a giant centrifuge concept that flings objects into orbit and is already running test launches.
Traditional hardware segments may see higher sales, too. That includes antenna systems, made by companies such as ThinKom, Intellian and Kymeta. And ground equipment, made by companies such as General Dynamics, RTX, Lockheed Martin, Kratos and Airbus.
A final thought: Space is hard
Keep in mind that space is technically challenging and hugely capital-intensive. “This is not for the faint of heart,” said Amazon Leo’s Chris Weber. “You have to have really long-term thinking.” Major concerns include rising costs, global supply chain challenges and the risk of an economic downturn.
Even in a growing industry, it’s likely that there are too many companies and some of the new business ideas won’t work out. Expect more industry consolidation, plenty of delays and occasional outright failures.
This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.