Stocks in the space sector offer exciting diversity. Tech is one of the most essential parts of the space industry, and the drive to explore the cosmos and discover pushes innovation in tech to new heights. As our technology develops, we will unlock the full potential of space little by little, and it could eventually grow into one of the largest markets ever.
Those looking to get into space stocks have to be able to stomach some risk. There is little room for error in the development of tech in space and lots of room for expensive research and development. However, if you can tolerate the risk, these three stocks are perfect options for investors, given their incredible potential and lucrative positions within the space market.
Let’s learn more about what each company offers and why it is in an exciting position to take off in the coming years.
Lockheed Martin (LMT)
Lockheed Martin (NYSE:LMT) is the largest defense tech company worldwide. Its main customers include the Pentagon and other government agencies. However, Lockheed also has a significant position in the space market, supplying satellite, missile and launch tech to customers like NASA.
Lockheed’s launch business is fueled by a massive partnership with Boeing (NYSE:BA) that started in 2006. The duo is seeing an enormous surge in demand from its government benefactors like the Air Force to launch more satellites to keep up with major competitor SpaceX and allow the government to test its latest defense tech accurately.
Demand is not limited to the company’s launch tech, though. The company has a long history of developing state-of-the-art missile technology. The U.S. Army is also throwing money at Lockheed to acquire its most advanced missile system, the Hypersonic Weapon System. This tech landed Lockheed a contract for $756 Million just last month.
Lockheed has continuously worked to expand these successful segments, as space tech accounted for 19% of net sales and missiles around 17% in Q1. With more investments from government agencies and continued success from its commercial customers, Lockheed is set to do great things. It is an excellent investment for those looking to enter space this year.
Leidos Holdings (LDOS)
Leidos Holdings (NYSE:LDOS) is unique in the space market because, in addition to tech, it provides an extensive list of consulting services. Its main customers are NASA and other government agencies heavily involved in space.
Leidos’s offerings span a wide range of markets, but its space services include tech; education; and accompaniment for cargo, human exploration, and payload transportation missions. The company has a long history of working with NASA and is the leading tech services provider on their countless continued missions.
The company has also made intelligent investments to expand its space capabilities, including acquiring Dynetics, a leading research and security solutions company, in 2020. Dynetics now operates as a subsidiary of Leidos and continues to provide the most cutting-edge technology to the government.
Leidos is a relatively stable stock within the space sector. It has already shown extensive growth this year, reaching an all-time high in price. Investors should keep an eye on Leidos as it continues to prove its undeniable worth and return potential.
Rocket Lab USA (RKLB)
Rocket Lab USA (NASDAQ:RKLB) is not as established as the other companies on this list as it is much newer to the space tech market. While the market already involves high risk, Rocket Lab offers the risk of being a newer company without as many established customers as well.
However, much is to be said about this launch and rocket tech specialist. The company already has a solid base in small-scale launches and is looking to expand its offerings to larger-scale rockets and satellites.
It is important to note that a small scale does not mean a small profit. In April, the U.S. space force offered Rocket Lab a $14.49 million task order to launch a small-scale electron mission. Rocket Lab does not stop at launch technology, either.
On June 11th, Rocket Lab announced that it was on its way to completing a non-binding agreement to receive $23.9M in direct funding to increase the production of its semiconductors, which are used on satellites and other spacecraft.
The funding is under the CHIPS and Science Act, and Rocket Lab was selected for the grant thanks to its acquisition of semiconductor manufacturer SolAero Technologies Inc. in 2022. This young space stock is nowhere near its peak but is primed with the potential to have a massive imprint on the space industry.
On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.