Space may be the next frontier for investors who want their portfolios to keep accelerating upward. Advanced technology has introduced new possibilities that previously seemed like science fiction, and the performance of some of the companies specializing in these solutions has been crushing the S&P 500’s return.
The latest innovations in the industry go far beyond space tourism. “The biggest shift right now is that space is becoming infrastructure rather than just exploration,” Viktor Shpakovsky, investment partner at Beyond Earth Ventures, told U.S. News. “We’re seeing massive growth in satellite constellations for communications, Earth observation and defense.”
Some headline catchers are bringing more attention to the space business. SpaceX, a private aerospace manufacturer and space transportation company, is working on advanced reusable launch vehicles to transport humans to Mars and other places in the solar system, for example. Founded by Elon Musk, SpaceX is targeting June 12 for an IPO on the Nasdaq, according to the latest reports.
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However, it’s far from the only company engaging in space discovery activities, with Blue Origin, Arianespace and United Launch Alliance conducting their own high-profile missions.
Shpakovsky said that companies with rockets and satellite systems have “a huge economic advantage,” but his insights about the moon show that the space industry is just getting started.
“The moon is quickly becoming a real commercial sector. Governments are investing heavily in lunar programs, but we’re also seeing private companies building landers, rovers and logistics systems to support sustained lunar activity. Over the next decade, the moon will likely move from occasional missions to a permanent economic and geopolitical presence,” Shpakovsky says.
Wondering which space stocks and ETFs are worth monitoring? These picks have the potential to take your investment to new heights:
| Space Stock/ETF | Market Capitalization/Net Assets | Business Focus |
| Rocket Lab Corp. (ticker: RKLB) | $74.9 billion | Dedicated satellite launch services and manufacturing space infrastructure. |
| AST SpaceMobile Inc. (ASTS) | $32.9 billion | Building space-based worldwide cellular broadband network. |
| Intuitive Machines Inc. (LUNR) | $5.4 billion | Lunar exploration, cargo transportation and lunar data infrastructure. |
| Kratos Defense & Security Solutions Inc. (KTOS) | $10.1 billion | National security technology, drone systems and satellite communications. |
| Procure Space ETF (UFO) | $749.3 million | Pure-play space ETF tracking global aerospace companies. |
| Ark Space & Defense Innovation ETF (ARKX) | $893 million | Actively managed fund targeting aerospace and defense innovators. |
| iShares U.S. Aerospace & Defense ETF (ITA) | $13.6 billion | Broadly diversified large-cap aerospace and defense equity fund. |
Rocket Lab Corp. (RKLB)
Rocket Lab launches satellites into space on rockets that can land themselves. The company performs this service on behalf of private and public sector organizations. These satellites are critical for Wi-Fi, telecom, the defense industry
, environmental monitoring and other applications.
Governments and corporations turn to Rocket Lab for private, dedicated launches that give them full flexibility regarding when and where to launch satellites. Other satellite launching models offer less flexibility and require ridesharing, similar to taking public transportation versus getting a limousine just for you.
Rocket Lab is already generating revenue while exhibiting strong demand for its services. The company flew a record 21 missions across Electron and HASTE rockets with a 100% success rate. That was enough to bring in $602 million in revenue in 2025, representing 38% year-over-year growth.
Rocket Lab is currently sitting on a $1.85 billion backlog, which is up by 73% year over year. As Rocket Lab continues to scale its number of missions, its revenue should continue to surge.
AST SpaceMobile Inc. (ASTS)
AST SpaceMobile is building a space-based cellular broadband network that aims to provide 4G and 5G internet worldwide. The company has been building connections and enhancing its technology for multiple years, but 2025 was the first year it became a revenue-generating business. AST SpaceMobile closed out the year with $70.9 million in revenue, but momentum is accelerating.
George Kailas, founder and CEO of Prospero.ai, an AI-driven stock picking and signal platform for retail investors, explains that AST SpaceMobile has tangible revenue and tailwinds, which make it less risky than other high-growth stock picks.
“It’s important to distinguish between ‘hype’ and more clearly defined revenue paths. When Tesla Inc. (TSLA) investors get excited about potential future Optimus revenues, the numbers are still highly speculative,” he says. “By contrast, AST SpaceMobile already has approximately $1.2 billion in contracted revenue for 2027.”
AST SpaceMobile also has $3.5 billion in cash and equivalents on its balance sheet to fund its ambitions, and its fully subscribed $1 billion convertible senior notes with a 2.25% APR, due in 2036, show that institutional investors feel confident about its long-term prospects.
“Not only is ASTS in the right subsector to capture major growth potential, but we are particularly bullish because of its global roster of telecom partners, which helps validate the business model and supports long-term revenue visibility,” Kailas says.
Intuitive Machines Inc. (LUNR)
Intuitive Machines, a space exploration and infrastructure firm, has been a volatile stock since it went public through a special-purpose acquisition company, or SPAC, in 2023. The company’s shares went from $2.55 per share on Dec. 29, 2023, to $18.16 on Dec. 31, 2024. The stock proceeded to crash, but shares have now more than doubled since late November, with institutional investors buying additional shares.
The company has been making strategic acquisitions to turn itself into a leading space company that can transport cargo, instruments and satellites to the moon’s surface. It acquired deep space navigation specialist Kinetx and spacecraft manufacturer Lanteris Space Systems. The combined entity generates more than $850 million in revenue and has a record $1.1 billion backlog.
Intuitive Machines has also secured high-quality financing. Its $345 million convertible senior notes, due in 2030, are fully subscribed and only have a 2.5% APR. The convertible bond lets investors buy shares at approximately $13.11 per share, which represented a premium of roughly 25% when the bonds were issued. The stock has since soared past $13.11 per share, indicating that institutional investors who bought these made the right move.
Kratos Defense & Security Solutions Inc. (KTOS)
Kratos Defense & Security Solutions’ share price has seen steady, double-digit growth over the past year. This market outperformance is driven by the company’s defense contracts.
In a fourth-quarter press release that featured 21.9% year-over-year revenue growth, Kratos President and CEO Eric DeMarco cited a significantly improving “global national security opportunity and funding environment for the industry.” He also told investors they are in the middle of a “generational recapitalization of the defense industrial base.”
Kratos’ unmanned drones, air defense systems, satellites, missiles and radars should experience more demand due to these initiatives. Kratos ended 2025 with a $1.6 billion consolidated backlog and a $13.7 billion bid and proposal pipeline, and those numbers have only been growing from there.
Procure Space ETF (UFO)
If you’re looking to spread your investment across multiple companies, the Procure Space ETF offers exposure to pure space stocks as it aims to provide “diversification beyond the limitations of solely earthbound companies.”
The fund has comfortably outperformed the S&P 500 with 46% in year-to-date gains. Additionally, it has more than doubled over the past year. Those gains help justify the ETF’s 0.75% expense ratio. The fund currently has $749 million in assets.
UFO’s top three holdings are Rocket Lab, MDA Space Ltd. (MDA) and Viasat Inc. (VSAT), making up roughly 20% of the fund’s total assets. Overall, UFO has about 50 stocks in its portfolio.
Ark Space & Defense Innovation ETF (ARKX)
The Ark Space & Defense Innovation ETF offers the same premise as UFO. It gives investors exposure to space stocks and has outperformed the S&P 500 with 64% in gains over the past year. It has a lofty 0.75% expense ratio, but it’s easier to overlook the high fee if ARKX continues to deliver high returns.
The fund’s top holdings are Rocket Lab and L3Harris Technologies Inc. (LHX). ARKX is heavily concentrated, with its top 10 holdings making up almost 60% of its total assets. The fund also has some AI stocks like Advanced Micro Devices Inc. (AMD) and Palantir Technologies Inc. (PLTR).
iShares U.S. Aerospace & Defense ETF (ITA)
The iShares U.S. Aerospace & Defense ETF offers the most diversification. Some of the stocks in this fund are space stocks, but others are in the more general aerospace industry. The fund primarily focuses on large-cap growth stocks instead of smaller space stocks that come with more risks and higher potential rewards. This setup results in less volatility, but the fund can still deliver some solid gains.
ITA shares are up by 28% over the past year and have an annualized 16% return over the past five years. Its top three holdings — GE Aerospace (GE), RTX Corp. (RTX) and Boeing Co. (BA) — make up more than 45% of its total assets. ITA has a 0.38% expense ratio.
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7 Best Space Stocks and ETFs to Buy in 2026 originally appeared on usnews.com
Update 05/18/26: This story was published at an earlier date and has been updated with new information.
