In the new battle for space, the old and new space business are facing off again—in a manner of speaking. Old space could use a win.
Wednesday morning, about 1 a.m. eastern time, the National Aeronautics and Space Administration will attempt to launch its huge SLS rocket on the Artemis I mission.
It’s the first space mission for the new launch system which is roughly 80% more powerful than a SpaceX Falcon Heavy rocket.
Artemis I has been a while coming. NASA has been working on the SLS since 2011, about the time the Space Shuttle was retired. A couple of attempts to launch the mission were scrubbed earlier in 2022 out of an abundance of caution. Hydrogen fuel used to propel the rocket upward was acting in an unexpected manner.
When the mission launches, the SLS will carry the Orion spacecraft into orbit. That spaceship will then use an “Interim Cryogenic Propulsion Stage” to send it on its way to the moon. Orion will go to the moon, circling it for about a week before heading back to Earth. About 1.3 million miles—enough to circle the Earth more than 50 times.
The Artemis I mission is uncrewed and is intended to prepare the technology for future crewed missions to the Moon, and eventually to Mars.
For investors, existing aerospace and defense suppliers are all over the program. Orion is built by
(AIR.France) is making the Orion service module that provides things such as propulsion.
(AJRD) makes the SLS rocket engines.
(BA) makes the rocket core stage, and
(NOC) makes SLS booster rockets.
It gets progressively harder in space the farther the mission is designed to go. Still, while SLS is planning its first mission, SpaceX, which pioneered reusable rockets, has launched its Falcon rockets more than 50 times so far in 2022. And it’s only been about seven years since SpaceX first landed an orbital-class rocket booster for the first time.
SpaceX represents the heart of the new space industry. It looks like it is running circles around the existing players.
Elon Musk’s space company is largely responsible for lowering the cost to reach orbit and creating new business opportunities for things such as space-based communications and space-based Earth observation, which can replace things like spy planes and drones. A bevy of new start-ups including
Rocket Lab USA
(ASTS) are trying to exploit the opportunities SpaceX has helped create.
Stock in those three companies is worth less than $5 billion combined. SpaceX is valued at some $125 billion in private markets. It’s the 800-pound gorilla in the new space business with its launch and satellite building capabilities. SpaceX also offers its Starlink space-based internet for users in many countries around the globe today.
There will be new business for the traditional and new space players as costs continue to fall and new business models gain momentum. The ones that will garner the lion’s share of that new business, however, will be the ones that can go fastest and create the lowest-cost technology.
Headed into the launch,
stock is down about 13% year to date while the
Dow Jones Industrial Average
are off about 16% and 7%, respectively.
For the year to date, Lockheed and Northrop shares are up about 30% and 26%, respectively. An improving defense outlook is the biggest reason for that outperformance.
Shares of the start-ups aren’t doing so well. So far this year, Rocket Lab and BlackSky shares are down about 56% and 60%, respectively. Rising interest rates have sapped some investor enthusiasm for more speculative ideas.
AST is a start-up stock that has bucked that trend. Shares are only off about 5% year to date.
Write to Al Root at firstname.lastname@example.org