In recent trading, U.S. aerospace stocks have experienced significant growth, driven by what analysts are calling the "Trump/Elon Deal," acknowledging the relationship between President-elect Trump and SpaceX CEO Elon Musk. Notable gains this week include Rocket Lab (RKLB, Financial) up 41%, Intuitive Machines (LUNR) up 28%, Spire Global (SPIR) up 26%, Planet Labs (PL) up 16%, Redwire (RDW) up 15%, and AST SpaceMobile (ASTS) up 10%.
Andrew Chanin, CEO of ProcureAM, noted the underestimated potential catalysts in the space industry, highlighting the interest shown by the President-elect in space as a significant historical figure. ProcureAM operates the Procure Space ETF (UFO).
The surge in aerospace stocks is also attributed to third-quarter performances and specific updates, such as Rocket Lab’s Neutron project advancements and Spire's maritime business sale to reduce debt. Cantor Fitzgerald analyst Andres Sheppard mentioned that a positive market sentiment also boosted stocks. He provided a "buy" rating for Rocket Lab (RKLB, Financial), Redwire (RDW), and Intuitive Machines (LUNR), expecting increased market risk appetite following Trump's victory.
This week's top-performing space stocks have rebounded from post-SPAC slumps, with projections for triple to quadruple growth in 2024. Sheppard cited the space sector as one of the year's best-performing areas, with investor interest surging due to factors like national security, NASA’s Artemis program, and Musk’s ambitious Mars objectives.
Although SpaceX remains privately held, investors are turning to other space companies. Chanin emphasized SpaceX's leadership in rocket launches and satellite broadband benefits companies managing spacecraft, as entry costs into space decrease.
A notable market divergence has also emerged, with recently listed companies’ stocks climbing, while traditional entities like EchoStar (SATS) and Viasat (VSAT) face declines, each dropping over 10%. Alex King, CEO of Cestrian Capital Research, described this as a shift in industry "gatekeepers," as the market determines which companies endure.
Overall, Sheppard remains optimistic about the space sector's outlook, despite substantial gains so far this year. His sentiments align with Rocket Lab’s CEO, who expressed confidence during the company’s earnings call about the incoming Trump administration’s focus on maintaining space industry momentum.
