Three Investments to Buy for Profiting from Launch Services Growth

Three investments to buy for profiting from launch services growth feature a promising trajectory.

The three investments to buy for profiting from launch services growth feature an ascending company able to put small satellites into orbit, a supplier of parts used in rockets, as well as a fund that gives exposure to a variety of technology stocks. For investors seeking to fuel their portfolios, this trio of possibilities could provide a boost.

SpaceX founder Elon Musk and President Trump recently clashed over several space-related issues.  The conflicts most notably include U.S. government use of SpaceX’s launch services and the broadband-providing Starlink business, wrote Timothy Horan, an equity research analyst with Oppenheimer, in a June 9 research note. Horan predicted Musk will ultimately “capitulate” as his rhetoric about the President’s deficit-increasing “big, beautiful bill” seems to be moderating. As for Trump, he recently said Starlink is a “good service,” per a Reuters report.

Three Investments to Buy for Profiting from Launch Services Growth: RKLB

Long Beach, California-based Rocket Lab Corporation (Nasdaq: RKLB) describes itself as an end-to-end space company with a track record of mission success. Its business activities include providing launch services, spacecraft components, satellites and other spacecraft and on-orbit management solutions to make it faster, easier and more affordable to access space.

“We believe that space has defined some of humanity’s greatest achievements and it continues to shape our future,” Rocket Lab posted on its website. “We are motivated by the impact we can have on Earth by making it easier to get to space and to use it as a platform for innovation, exploration and infrastructure.”

In a significant development, Rocket Lab announced on May 27 that it had agreed to acquire the parent holding company of Geost, LLC (Geost), a Tucson, Arizona-based electro-optical and infrared (EO/IR) payload manufacturer that provides high-priority national security satellites. The seller is Lightridge Solutions, a portfolio company of ATL Partners, for a price of $275 million, consisting of $125 million in cash and $150 million in privately placed shares of Rocket Lab common stock.

The price also could be boosted by up to $50 million in potential additional cash earn-out payments tied to revenue targets. The acquisition marked Rocket Lab’s formal entry into the satellite payload segment, strengthening its role as a provider of national security space capabilities. The acquisition is expected to close in the second half of 2025.

Three Investments to Buy for Profiting from Launch Services Growth: Gursky’s View

Rocket Lab is a buy recommendation of Citigroup’s aerospace and defense analyst Jason Gursky. The company’s share price fell amid a recent market sell-off but its outlook offers hope for it to emerge as a launch industry success, Gursky wrote.

Chart courtesy of www.StockCharts.com.

The key challenge for launchers is to establish reliability. Rocket Lab can enhance its growth and quest to achieve profitability by putting the satellites it is entrusted to launch into their proper orbits without problem.

Gursky expressed optimism that Rocket Lab will succeed. Investors who like bargains may want to consider purchasing shares in Rocket Lab after its share price dip.

Bryan Perry, leader of the Cash Machine investment newsletter and the Hi-Tech Trader advisory service, has recommended a pair of companies that have been heavy users of launch services to replenish spacecraft that provide low-Earth-orbit (LEO) satellite services. One of them is a current recommendation in Hi-Tech Trader, Covington, Louisiana-based Globalstar, Inc. (NASDAQ: GSAT).

Bryan Perry heads the Cash Machine investment newsletter and Hi-Tech Trader.

Three Investments to Buy for Profiting from Launch Services Growth: ARKX

Due to the lack of profits and, in some cases, revenues for most space companies, Michelle Connell, who heads Portia Capital Management in Dallas, said she favors ARK Space Exploration and Innovation ETF (BATS: ARKX). The exchange-traded fund (EFT) is offered by Cathy Wood, the founder and chief executive officer of ARK Invest, an investment firm known for its thorough research of cutting-edge technology, Connell counseled.

The ETF holds shares in artificial intelligence (AI), robotics and space. This fund is actively managed to include those companies that are or could become key competitors in their respective industries. ARKX has a dynamic process for managing its investment portfolio, so turnover of its stocks can be high, Connell continued.

Michelle Connell owns and is chief investment officer of Portia Capital Management.

Several of Wood’s holdings for ARKX are well-known and successfully diversified across the industries of government and space., Connell told me. The fund also is market-cap weighted, so those who buy shares in ARKX will be purchasing larger positions in solid space companies, as well as gaining exposure to some innovators, she added.

The following companies comprise almost 40% of ARKX:

Kratos Defense            10%

Rocket Lab                     9%

Iridium (IRDM)            8%

L3Harris Tech L(HX)   5%

Palantir Technologies  5%

Investors that believe in the future viability of the space industry, but don’t want the high risk of owning only one or two names, would be smart to look at ARKX as an alternative investment choice, Connell concluded.

Chart courtesy of www.StockCharts.com.

Three Investments to Buy for Profiting from Launch Services Growth: KRMN

Huntington Beach, California-based Karman Holdings (NASDAQ: KRMN) is looking to make one or two bolt-on transactions a year as it seeks to bolster both its design and manufacturing capabilities.  Karman’s private equity sponsor appears to continue to be involved in sourcing deals, including the company’s most recent transaction, wrote Jason Gursky, Citigroup’s aerospace and defense analyst in a recent research note.

The company’s management suggests no interest in making acquisitions at auction prices or from venture capitalists, Gursky wrote. The good news is that prospective sellers appear to like the idea of combining with Karman as a way to preserve legacy and provide assets a path to continued growth due to the company’s demonstrated success with most large space and defense prime contractors, Gursky continued.

Karman’s acquisition pipeline appears full, with many sellers proactively approaching the company, particularly after its initial public offering (IPO) on February 13, 2025, Gursky continued.

“Management does not feel it is capacity constrained at this point, and said it’s comfortable operating with leverage in the high twos, to low threes,” Gursky wrote in a May 27 research note. “There appears to be plenty of margin expansion opportunity, though it will likely be limited largely to operating expense leverage. At this point, the company expects gross margins to remain flat as it looks to remain cost competitive against its customer’s capabilities – which the company views to be its primary competition.”

However, Karman is making investments in automation to improve productivity – some of which can accrue to the company over time, Gurksy continued. Further, roughly 90% of revenue is tied to firm fixed price contracts, so margin mix could only head in one direction at this point. However, the company doesn’t expect it given customers’ focus on cost, Gursky wrote.

Chart courtesy of www.StockCharts.com.

As far as participating in the Golden Dome project of President Trump to defend against all kinds of missiles from land, sea or space, Karman’s management is aware the project is planned to be built during the current administration’s tenure. Thus, it will need to rely in part on existing technologies such as THAAD, PAC-3, and SM-3/6, as well as those already in development, such as Next Generation Interceptor (NGI), Gursky wrote.

Further, the company’s management expressed hope it can participate in the system through existing unmanned aerial vehicle (UAV) and space launch programs, Gursky continued. Finally, there could well be new technologies introduced to help support the new system, including several Karman might be able to help develop and manufacture over time, Gursky added.

Three Investments to Buy for Profiting from Launch Services Growth: Geopolitical Risk

The conflict between Russia and Ukraine is worsening. But increased need for spacecraft to support national defense may create additional demand for services, amid the rising geopolitical risk.

A technology futurist who is following the industry closely is George Gilder, who leads the Gilder’s Moonshots advisory service. He and his team of senior analysts have identified a start-up launch company that they like as a potential “moonshot” investment opportunity with big potential. For further information about that advisory service, click here.

Caption: George Gilder meets with Paul Dykewicz

The three investments to buy for profiting from launch services growth offer the potential to reward investors who are willing to put their trust in the dreamers and visionaries who view space as a great place to do business.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.