Several pure-play space stocks, including RocketLab USA, Inc. RKLB and Intuitive Machines, Inc. LUNR have rallied significantly following the 2024 presidential election.
Analysts attribute this surge to a “Trump-Elon trade,” reflecting the blossoming relationship between President-elect Donald Trump and SpaceX CEO Elon Musk.
The Details: Trump and Musk have formed a seemingly close friendship with the pair traveling together, attending events and spending time at Trump's Mar-a-Lago resort. On Tuesday, Trump joined Musk to witness SpaceX's Starship launch from Starbase in Texas.
Several accounts on social media posted videos and photos from the launch.
Investors view Musk’s influence on Trump’s space policies as a potential catalyst for the industry. The previous Trump administration also created the newest branch of the military, Space Force, underlining the value Trump places on space technologies.
Cantor Fitzgerald analyst Andres Sheppard, also sees the Trump administration and Musk's potential influence on its policies as positive for the space industry.
"I think there's definitely a risk-on, post-Trump-win rally that's being reflected in this industry," Sheppard told CNBC.
"It's only going to continue to proliferate because of national security, because of the Artemis program to get the U.S. astronauts back on the moon, because of Elon [Musk]'s ambitious goals of getting to Mars," Sheppard added.
RocketLab's CEO Peter Beck recently expressed his optimism about space policy under Trump‘s administration, citing its focus on space, national defense and efficient contracting.
"When space does well, Rocket Lab does well," he stated.
Another space stock, Planet Labs PBC PL is up more than 34% over the past month. Investors can also monitor the broader space sector through the Procure Space ETF UFO.
"Space has been one of the best outperformers in the market this year for a handful of these names," Sheppard said.
Overall sentiment in the space sector remains bullish, with expectations of continued growth under a Trump administration and Musk's influence.
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