Understanding space stocks: the next big opportunity?

*This transcript has been edited for clarity and readability.*

In this webinar

• Welcome and panel introductions (00:03)
• The SpaceX IPO and investment case (02:19)
• What has changed in the space economy? (08:48)
• Space technology: applications and opportunities (11:05)
• Key risks for investors (18:44)
• Audience questions: capital, UK stocks and Tesla (21:50)
• Is it too late to invest in space? (28:50)
• China, SpaceX and retail investors (34:07)

Welcome and panel introductions (00:03)

Victoria Scholar

Hello everyone, and a very warm welcome to today's webinar. Thank you so much for being with us. My name is Victoria Scholar, head of investment at interactive investor, and I'm going to be your host today.

We're here to discuss space stocks and the space economy. Is this the next big investment opportunity? Is it Musk madness, or does he have the Midas touch? We're going to look at some of the risks and opportunities with an expert panel, who I'll introduce shortly.

Before we get started, just a couple of things to mention. Firstly, this webinar is for educational purposes only and does not constitute financial advice.

Secondly, we would love to hear from you. We've already had some excellent questions through Slido. If you would like to ask our panel a question, head to slido.com and enter the code 7212046. The code and a QR code should be on screen now. If you see a question on Slido that you like, give it a thumbs up to increase its chances of being asked and answered.

Thank you if you've already sent in a question. They have helped to shape today's discussion.

We have around 40 minutes today. We'll introduce our panel, move into questions around the desk and then answer questions from the audience.

Our guests are Mark Boggett, CEO and co-founder of Seraphim Space, a global investment firm dedicated to investing in the space-tech sector, and James Lockyer, a technology equity analyst at Peel Hunt. James helps companies distil their sometimes complex stories for institutional investors and helps those investors make buy and sell decisions.

The SpaceX IPO and investment case (02:19)

 Victoria Scholar

Let's start with the big event last week, which would have been difficult to miss: the SpaceX IPO. It generated around $75 billion, valuing the company at more than $2 trillion and making it the sixth-largest company in the US. Elon Musk is now a trillionaire, and he said over the weekend that revenue could surpass $1 trillion by 2030.

Mark, how surprised were you by the success, and what are your key takeaways?

Mark Boggett

I wasn't surprised by the success. With the relatively small free float, the indices needing to buy in and the global interest in the world's largest IPO, I think it was inevitable that we would see a good first day's trade.

The implications for the broader space sector are very positive. It has really made space an investment class in its own right. Everybody is interested in it and talking about it. That's leading investors to learn more about space and discover that there's much more to it than SpaceX.

Victoria Scholar

James, how should an investor who is relatively new to this sector think about SpaceX? There are so many moving parts: designing and building rockets, Starlink, Starshield, the AI component and Musk's longer-term vision of colonising Mars and creating self-growing cities on the Moon. Do you have to believe in that science-fiction vision to buy shares, or is there an investment case over the next one to five years?

James Lockyer

You're right: it is a complex business. Some of the headlines over the weekend asked whether people were buying a space company or an AI company.

Investors could think of it as a telecoms company because of the satellite-connectivity business, an industrial company because of the rockets, and an AI, software and infrastructure play. It's a company made up of different businesses. Individually, those businesses aren't too complicated to understand, although piecing them together is harder.

I would argue that one element may be missing: an energy company. What are those parts trying to do? They're trying to take us into space and create an industry or ecosystem there. You need to get there, you need connections and you need power and energy. In theory, that's what Musk is building.

The first stage was the rockets. Getting off Earth is the hardest part of reaching space. SpaceX has done that successfully and dramatically reduced the cost. Connectivity is the first use case. Musk also talks about data centres in the sky, which could be the next use case in a few years.

Mars is further away, but the Moon is less so. If you can use the Moon as a staging post, including its resources, it could take us further into space.

Victoria Scholar

Mark, what impact could the IPO have on the broader market and on bringing additional capital into the asset class?

Mark Boggett

It has broadened the appeal of space to private equity, sovereign wealth funds and retail investors. That has already led to a surge in investment in other space stocks, which have gained traction in recent weeks, as well as greater interest in private companies.

We run an index that measures private investment in space quarterly. The first-quarter figure was 100% higher than the previous quarter, with record investment in a single quarter. We expect that to continue as the year progresses.

Investors doing their due diligence on SpaceX are discovering a broader market opportunity. It starts with launch and communications, then extends to Earth observation, energy and the other areas that space serves.

Victoria Scholar

James, what do you make of the lofty valuation? Is it justified, or will we look back on the IPO—alongside potential IPOs from OpenAI and Anthropic—as a sign that the market was at its peak?

James Lockyer

Without straying into investment advice, if SpaceX reaches $1 trillion in revenue, you can see how someone might assess a valuation in that ballpark.

One difference between this and previous bubbles, such as the dot-com boom, is that there are real revenues, customers and activity. During the dot-com boom, a company could add “.com” to its name and receive a frothy valuation. Here, there are strong revenues and growth.

Companies such as Anthropic and OpenAI are also using parts of SpaceX's technology, alongside Amazon. The fact that the IPO has so far been successful is a good thing for the IPO market. I think we're in a boom rather than a bubble.

What has changed in the space economy? (08:48)

Victoria Scholar

Let's move beyond SpaceX and talk about the space economy more broadly. Launch costs have fallen sharply, reusable rockets have become more common and the number of satellites has increased. James, how has the landscape changed?

James Lockyer

One of the things SpaceX has done extremely well, using one of Elon Musk's principles, is to go back to first principles.

In the Space Shuttle era, getting into space cost around $50,000 per kilogram. Now, it's around $200, and Musk wants to reduce it further. Reusable rockets are a big part of that.

For decades, there was no such thing as a reusable rocket, so people accepted the existing approach. Musk asked why and reconsidered the physics. SpaceX then vertically integrated much of the process, looked at the real costs of building a rocket and considered whether it could use different materials and build more cheaply.

Fuel is one of the biggest costs of reaching space. The more fuel you have, the more fuel you need to carry that fuel into space. If you can reduce that burden, reaching space becomes much cheaper.

Once you're in space, the lack of gravity, very low temperatures and other conditions enable things that cannot be done on Earth, or can be perfected in space. That includes creating materials or medicines, where crystals can form more perfectly in a vacuum or low-gravity environment.

The opportunities are almost endless. Reducing the cost of access could lead to Jevons paradox: as a resource becomes cheaper and more efficient, we use much more of it.

Space technology: applications and opportunities (11:05)

Victoria Scholar

What are some of the use cases? Could you give us some obvious and less obvious examples, both current and future? Data centres have been a major topic because of the hyperscalers' huge capital expenditure and the power constraints they face on Earth. There's increasing discussion about putting data centres in space.

James Lockyer

Connectivity through satellites is an obvious example. Earth observation is another. We've all seen Google Earth or Apple Maps, where an image is literally a photograph from space, but that doesn't cover every opportunity. Conventional images don't see through clouds, for example, while radar satellites can. Thermal imaging offers another form of observation.

Earth observation has uses in disaster recovery, defence, insurance and detecting deforestation. Ukraine, for example, has used Earth-observation data. Insurers could use it to identify events in a disaster area and assess their value more quickly.

Data centres in space are a less obvious example. AI is one of the largest consumers of energy on Earth, and that demand isn't going to fall. In space, solar energy can be available continuously. If we can harness that, use Starlink satellites to communicate with a data centre and bring the result back to Earth, an AI query could be processed in space. Moving some of that power consumption off Earth could free up energy here and potentially reduce costs.

There is also in-space manufacturing. Water has been found at the Moon's poles. If we can use that to obtain hydrogen and oxygen, we could create a filling station in space that enables missions to travel onwards from the Moon. Getting off Earth is the hardest part.

Victoria Scholar

What sort of time horizons are we considering? Those examples could be anywhere from one to 50 years away.

James Lockyer

Musk said he wanted data centres in space within the next few years, possibly by 2030, so that could be relatively near.

Mark Boggett

For the first phase, don't imagine a giant building floating in space. It is more likely to be a distributed group or constellation of satellites.

SpaceX is extremely well placed to create the first operational data centre. It has market-leading launch capability and has introduced Starship, which is around 10 times larger than Falcon 9 and provides far more capacity to put satellites into space. It also has the world's largest satellite manufacturing plant and has already produced more than 10,000 Starlink satellites. Converting those into data-centre satellites appears to be a relatively straightforward step. The conditions are in place for a distributed data centre, and I think we will start seeing it by 2030.

Victoria Scholar

Are there any companies in your portfolio that fit into the areas James mentioned?

Mark Boggett

Our investment trust has a portfolio of 26 companies covering all those areas. Earth observation is probably where we've invested most heavily.

New, more capable sensors in space offer higher resolution than ever before. Because it's now cheaper to launch large constellations, satellite data is moving closer to real time. That is game-changing.

One of our companies, ICEYE, is a Finnish business that has developed a radar-satellite constellation. Radar enables it to see the ground in all conditions, day or night, regardless of cloud or weather. It can see something the size of a pizza from space, currently with hourly updates. As the constellation doubles and triples in size, that moves towards every 30 minutes, every 15 minutes and ultimately real time.

Defence is the biggest customer at the moment, but there are many applications closer to home. If you were using Google Maps to drive into a town and look for parking, this technology could identify spaces as they become available and guide you to them. The practical applications are huge.

Another company is developing next-generation GPS. Today's GPS is only accurate to around one to 10 metres and is not secure; it can be spoofed, so the data cannot always be relied upon. That's a challenge for applications such as autonomous vehicles.

This portfolio company has developed a satellite constellation that is accurate to centimetres and offers military-grade security. We believe that could unlock an autonomous future for cars, drones and robots. Waymo can place sensors around a car, but you can't put the same array of sensors on a small drone or robot. These applications need better GPS.

Our portfolio also extends to new forms of energy. One company is creating nuclear-power batteries around the size of a microwave to provide power for spacecraft and satellites. Its first potential customers also include ground-based vehicles and submarines. This modular energy source could provide power for 10 years. It draws on the nuclear-power technology used in the Apollo era and brings it up to date.

Key risks for investors (18:44)

Victoria Scholar

There is clearly no shortage of opportunities, but opportunity comes with risk. James, what risks would you highlight?

James Lockyer

One risk on the industry's mind is Kessler syndrome. If one object collides with another in space, it could create a domino effect that disrupts the whole space environment. Even if one country wanted to disrupt another country's satellite, it would have to be careful not to affect its own assets.

Companies are looking to address this. Starlink satellites have thrusters and AI systems that help them avoid other objects. Space debris remains a problem. There are around 20,000 to 30,000 objects floating in space, including old rocket parts and satellites. Reusable rockets could reduce future debris, but we still need to stop objects colliding.

Companies are developing mini-thrusters that allow a satellite to move quickly out of an object's path and then return. AI is needed to understand trajectories and decide where satellites should be placed. Part of SpaceX's AI investment is intended to keep its own and its customers' satellites in safe positions.

If a major collision occurred, services we rely on, including GPS, could stop working.

Victoria Scholar

Mark, your investment trust, SSIT, is trading at a discount to net asset value. What's going on?

Mark Boggett

I wish I knew the full answer. The only thing I can say is that I don't believe it should be.

Our largest shareholder has been reducing its holding from 13% to around 5% over the past week. I think that has weighed heavily on the share price.

Last week, we also announced that our largest holding, ICEYE, had effectively doubled its valuation and was now valued at $10 billion. The resulting 7.5p-per-share uplift in net asset value has not yet been reflected in the share price. I think it's only a matter of time before that value is reflected. At present, I think one large seller has been pushing the price down.

Audience questions: capital, UK stocks and Tesla (21:50)

Victoria Scholar

Graeme asks: “I've read commentators suggesting that the SpaceX IPO could depress the rest of the space market because it will soak up hundreds of billions in capital. What do you think?”

James Lockyer

It has so far been a successful IPO, if you define that as the share price rising on the first day. Other companies, not necessarily in the space industry, that have considered an IPO may look at that and conclude that there is investor appetite.

SpaceX has a relatively small free float. Although the company raised tens of billions, the amount raised wasn't as large as the overall valuation might suggest. There is more money available.

If the IPO had gone the other way, some prospective flotations might have stepped back. Given what has happened, I hope it will encourage others to come forward.

SpaceX is a very large company, but plenty of smaller space businesses may be relevant to different audiences, stock markets and listing venues around the world. They may now test the water because there is demonstrable appetite for the sector.

Mark Boggett

SpaceX's pricing is encouraging investors to look for value elsewhere in the space market. When the lock-up period on SpaceX shares ends, some existing shareholders may sell. I believe a significant proportion of that capital will be reinvested in the space market. These investors have already bought into space as a long-term growth category, so reinvesting elsewhere in it is likely. I expect a positive trickle-down effect from the IPO.

Victoria Scholar

John asks: “What's the forecast for UK space-oriented stocks? What is the opportunity in the UK?”

Mark Boggett

The UK has always punched well above its weight in the private space market. Until last year, it was third behind the US and China for the number of space companies receiving investment and the amount of capital invested. In 2025, it fell to fourth behind Germany.

The UK has consistently invested significant sums in emerging space technology, and I expect that to continue. Major investors such as the British Business Bank are focused on the area, alongside specialists such as us.

To my knowledge, we are the only publicly listed space investment fund outside ETFs. We play our part in investing in the UK, which has strong entrepreneurs and a healthy flow of private space businesses. I'll leave James to discuss the public companies.

James Lockyer

There aren't many publicly listed UK companies that investors can access. There are some space-adjacent businesses. Filtronic, for example, has SpaceX as a customer. There are also satellite and communications companies, and companies that use space data, but few focused exclusively on the space industry.

The UK has a long history in space but, for reasons including regulation and tax, hasn't always attracted and retained listed space companies. Some have gone elsewhere. I hope the trickle-down effect encourages more UK private companies to come to the public market here.

Victoria Scholar

Another question asks: “What is the business case for Tesla eventually being folded into SpaceX?” Dan Ives at Wedbush has suggested that SpaceX and Tesla could merge, perhaps in 2027. What are your thoughts?

James Lockyer

Musk has already merged several of his other businesses into SpaceX.

A Tesla vehicle is essentially a sophisticated computer with wheels. It has relatively few moving parts, can be upgraded through software and is powered by a battery. If SpaceX were to add anything to its portfolio, I think it would need an energy component.

I don't know whether Tesla is likely to be merged, but there could be a connection through robotics. Musk wants Tesla to focus more on robotics, while manufacturing in space would need robots to do things that humans cannot. That could be one possible rationale.

Is it too late to invest in space? (28:50)

Victoria Scholar

Sabuhi asks: “Have investors missed the opportunity to invest in space stocks?”

Mark Boggett

I think we're at the start of this market's growth. Over the past 10 years, it has been fuelled by the low-cost access provided by Falcon 9. Starship is a rocket that's 10 times larger and could ultimately cost a tenth as much, although its pricing isn't yet clear. SpaceX says it plans to launch a couple of hundred a year.

This is the dawn of mega-infrastructure in space: cell towers, data centres, energy generation that could bring clean energy back to Earth, and manufacturing.

Every protein and molecule behaves differently in the zero-gravity environment. That could lead to breakthroughs in biopharma and drug discovery, as well as new materials, potentially including synthetic rare-earth materials.

Many areas are being catalysed by lower launch costs. At the same time, capital is seeking opportunities in the market and AI is enabling further development. I think we're still on the first rung of the ladder.

James Lockyer

One of the headlines I've seen is that people don't understand the business because it's complex. Another concerns SpaceX's estimated $28.5 trillion total addressable market, which some people question.

However, the cost of getting into space is the single biggest factor that could mean that number rises over time. Jevons paradox was identified in the 19th century when the steam engine became more efficient. In theory, less coal was needed, but demand for coal soared because people found many more uses for steam engines. When something becomes easier and cheaper to use, we may use much more of it. Are we at the beginning? I would say definitely.

Mark Boggett

From a valuation perspective, SpaceX is worth a couple of trillion dollars. The next most valuable space company is worth around $50 billion, followed by one at around $40 billion, and then companies valued in the tens of billions.

Over the next three to five years, I expect more of a levelling of the playing field. Many more space companies could be valued in the tens of billions, with some breakthrough successes exceeding $100 billion. They cover all the areas we've discussed, each of which could have a huge impact on humanity and represents a large total addressable market.

Victoria Scholar

It sounds as though, in 10 or 20 years, we may no longer talk about a space sector. Space could simply become part of energy, defence, pharmaceuticals and other industries, much like technology.

Mark Boggett

It's like AI. We don't really talk about an AI sector because AI is a horizontal capability that supports every sector. Space is the same.

Just as you wouldn't invest in Nvidia and say your exposure to AI was complete, investors are recognising that owning SpaceX alone wouldn't cover the whole space market.

Victoria Scholar

Is it challenging to identify which parts of the market will succeed and which will fail? Do you have to spread your net?

Mark Boggett

There are still relatively few “new space” companies. These are typically privately financed businesses using technologies such as components borrowed from other industries and 3D printing.

Those companies are now scaling and starting to float. The number available to public-market investors will increase significantly over the next three to five years.

China, SpaceX and retail investors (34:07)

Victoria Scholar

Matt asks: “The current space race appears to be very North American. Are there emerging space-investment opportunities in China, for example?”

Mark Boggett

Americans will tell you they're neck and neck with China. China has invested heavily in this area, and that is one of the things driving the space race.

Governments are focused on landing on the Moon, accessing ice and raw materials, and establishing a rule of law there. In the private market, China already has operational equivalents to Starlink seeking to win communications customers. Chinese companies are operating and growing quickly in every other subsector too.

Today, the market is split largely between China and the West, so many companies don't yet face Chinese competitors directly. I think that competition is likely to increase.

Victoria Scholar

An anonymous attendee asks: “Is Seraphim effectively a customer of SpaceX, using its launch platforms for Seraphim portfolio companies?”

Mark Boggett

Yes, absolutely. SpaceX operates what it calls Transporter missions, opening launches to new private space companies. A single launch can carry around 100 satellites. Seraphim portfolio companies typically represent about 20% to 25% of each of those launches. SpaceX has underpinned our ability to back companies that are rapidly getting their satellites into space.

Victoria Scholar

Alan asks: “There have historically been some interesting transactions between Mr Musk's companies. Is it a concern that retail investors' money could be used to enhance his personal fortune?”

James Lockyer

That's a tricky question. His personal fortune has certainly been enhanced.

The transactions and acquisitions have been made to build a group of companies that, in theory, work together. You need launch capability to reach space, connectivity to communicate in space and AI to operate there.

I wouldn't be surprised if more transactions happened. We mentioned Tesla earlier. Logically, though, the building of this conglomerate makes sense in the context of what SpaceX is trying to do.

Mark Boggett

I think Musk genuinely wants retail investors to participate in the potential upside from the space market's growth. In my view, we're only at the beginning, and I believe he shares that view.

Everyone knows SpaceX, but it has been difficult for retail investors to access because it was private. I think that's why he wanted to bring retail investors in and enable them to participate in the next phase of growth.

Closing remarks (38:15)

Victoria Scholar

We very much hope to see more opportunities for retail investors in future.

A huge thank you to our panel: Mark Boggett, CEO and co-founder of Seraphim Space, and James Lockyer, technology equity analyst at Peel Hunt.

We'd love to see you at another webinar soon. Thank you for taking the time out of your day to listen. A replay is available on YouTube if you'd like to revisit anything you missed or share the discussion with friends.

We would also love to hear your feedback. We want to be guided by what you enjoyed and what you didn't. An email will be sent this afternoon, so please feel free to share your thoughts.

If you could subscribe to our YouTube channel, that would be great. Thank you and goodbye.

James Lockyer said SpaceX raised less capital than its overall valuation might suggest because only a relatively small proportion of its shares were made available. He argued that the successful listing could encourage other space companies to test the public markets.

Mark Boggett added that the IPO may prompt investors to explore other parts of the space market. He believes some existing SpaceX investors could eventually reinvest proceeds from selling their shares elsewhere in the sector

The UK has historically attracted significant private investment in space technology. According to Mark Boggett, it ranked behind only the US and China until 2025, when Germany moved into third place.

However, James Lockyer explained that relatively few dedicated space companies are currently listed on the UK stock market. Investors are more likely to find space-related businesses involved in areas such as satellite communications and the use of space data.

Mark Boggett believes the space market remains at an early stage of its development. Falling launch costs could support the growth of infrastructure including satellite communications, Earth observation, data centres, energy generation and manufacturing in space.

James Lockyer compared this with Jevons paradox: when technology becomes cheaper and more efficient, people often discover more uses for it and overall demand increases. However, emerging space companies can be highly speculative and investors should carefully consider the risks.

China has invested heavily in space technology and has developed businesses operating across satellite communications and other parts of the market. It also has operational alternatives to services such as Starlink.

Mark Boggett said the Chinese and Western space markets currently remain largely separate, but competition between businesses in these markets could increase over time.