Space Travel by the Second Quarter… Here’s How to Trade It.

Jan 13, 2023
Astronaut cosmonaut discovery of new worlds of galaxies panorama, fantasy portal to far universe. Astronaut space exploration, gateway to another universe. 3d render

For quite some time, space tourism was the most exciting topic on the Street.  Then, it became more laughable than Looney Tune’s space traveling, Daffy Duck in the 24 ½ Century.

It flopped… But if all goes according to plan, space tourism could make a big return – and be a commercial opportunity by the second quarter of 2023.  Should all go well, the industry could be worth up to $800 billion by 2030, says UBS, as reported by Forbes.  By 2040, the industry could be worth $1 trillion, added Morgan Stanley.  

Plus, there’s already a good deal of pent-up demand.  According to analysts at Cowen, 39% of people with a net worth of more than $5 million are already interested in paying at least $250,000 for a flight, says CNBC.  Even the billionaires are jumping on the bandwagon.

  • Richard Branson’s Virgin Galactic wants to launch the first commercial space flights with seats already reserved at $250,000 a pop.
  • Jeff Bezos is devoting more time to his Blue Origin space venture.  
  • Elon Musk’s SpaceX is even raising capital at $137 billion valuation.

While it’ll take some time to get space tourism right, there’s plenty of excitement.  Look at Virgin Galactic (SPCE), for example.

The stock is starting to blast higher. All after the company said upgrades to its VMS Eve (its carrier mothership) are complete.  “The mothership is expected to enter ground tests next week before commencing flight tests to verify the enhancements to the ship. Commercial service remains on track to begin in Q2 2023,” the company said. Better, according to CEO Michael Colglazier, the company is moving forward with commercial operations.

Another way to invest in space travel potential is with an ETF, such as the ARK Space Exploration & Innovation ETF (ARKX). At $13.40, with an expense ratio of 0.75%, the ETF invests in innovations across space.  While the ETF pulled back with the space tourism flop, and with the overall market, it is showing signs of life again. Better, the ARKX ETF offers exposure to stocks such as Trimble, Iridium Communications, Kratos Defense Aerovironment, Teradyne, Garmin, Alphabet, Honeywell, JD Logistics, and dozens more.

If space travel can get off the ground, this could be an “out of this world” opportunity.