Did you know that the United States is planning a trip to an asteroid that contains enough metal to make everyone on Earth a billionaire?
Psyche 16 sits in the asteroid belt between the orbits of Mars and Jupiter, and is made pretty much of solid metal. One scientist estimates that it alone contains 10 trillion dollars worth of iron. NASA’s unmanned mission plans to reach Psyche by 2026 and unfortunately this is just a research trip and it not bring all that metal back for us.
Although not all of us will become billionaires from Psyche 16, the resources contained in this single asteroid To do point out all the benefits and riches that could await us in space, including closer to our own moon. It also helps explain why forward-thinking corporations and billionaires around the world have already joined in what I call the “Race for the New Space.”
What billionaires know
The billionaires you keep seeing in the news – Elon Musk, Jeff Bezos and Richard Branson – are excited about the promise of New Space.
I think former Department of Defense official Bryan Del Monte summed it up best when he told the Observer that Jeff Bezos, in particular, “believes that the space represents the railways and highways of the future. That’s why he wants control so badly.”
This New Space race is also much closer to home than interplanetary destinations such as moons and distant asteroids.
Dassault Systems (OTC:DASTY) estimates that there will be thousands of satellite launches per year throughout the 2020s. Over the next 30 years, the number of operational satellites in orbit could grow from around 5,000 today to tens of thousands .
These new satellites will have great implications for Earth issues such as communications, climate change, maritime operations, energy and even world hunger.
As the local neighborhood in space becomes more crowded, new services such as maintaining all those satellites and space stations will become vital. And how about space cleaning? There are currently over 28,000 pieces of “space junk” in orbit just getting in the way.
General John W. “Jay” Raymond is the chief of space operations for the United States Space Force. He said at a recent conference that we are witnessing “a second golden age of space”.
As investors, we want to be ready.
Put your wallet in the race
Finding quality listed companies with a very direct connection to New Space is not easy. Several have gone public through special purpose acquisition company (SPAC) agreements, one of the most famous being Branson’s Galactic Pristine Backgrounds. It competes with Bezos’ Blue Origin, Musk’s SpaceX and a few other space tourism companies.
While interesting, I wanted to look at some less obvious and less direct links in this article. They are also more stable companies whose very existence will not depend on the results of a few launch attempts.
Dassault is a large French software company that emerged from Dassault Aviation in 1981 and specializes in the design, simulation and manufacture of 3D products. Dassault does not manufacture things, but saves its customers money by helping them with design, testing and simulation before these clients do any building, hire or modify the design and manufacture.
This means that Dassault can be involved in most any aspect of the New Space race. For example:
- Design and manufacture of rockets and satellites.
- Reusable launch systems.
- Active removal of space debris.
- Analysis of data collected from space.
It even envisions an in-orbit “road” service to help repair and maintain active satellites.
In New Space, Dassault’s cloud-based 3DEXPERIENCE platform enables companies to accelerate their ability to design and manufacture products. Of course, getting it right the first time also means cutting costs.
It’s a competitive advantage for Dassault that bodes well in the long run.
Nvidia (NASDAQ: NVDA) has positioned itself right in the middle of several lucrative technology trends through its leadership in graphics processing unit (GPU) design. For years, the company has remained at the forefront, bleeding edge, and forward-thinking of this space. As a result, high-end players in gaming, artificial intelligence (AI), machine learning, robotics, and self-driving cars are constantly looking to Nvidia for solutions.
Its connection to New Space provides software and hardware that enables NASA and others to plan accurately and efficiently.
NASA highly values Nvidia because of this ability to provide platforms for intense computing power, and in 2015 the two partnered with the SETI Institute and Autodesk create the Frontier Development Laboratory (FDL). The FDL uses AI technologies to solve problems related to space exploration, space weather, climate change and “all of humanity”. NASA is also using Nvidia GPU-powered simulations to plan the landing of its first manned Mars mission. Current Mars Rover upgrades include two separate Nvidia processor boards used for system functions, motion planning, control software, and vision processing. Elsewhere, researchers are using Nvidia’s data center’s advanced GPU to make sense of the massive amount of data collected by NASA’s Cassini spacecraft before it plunged into Saturn’s atmosphere in 2017. This Deep learning technology also allows planetary scientists to focus on promising areas rather than searching blindly.
There are many other high-profile examples of Nvidia’s AI and machine learning technology helping NASA and others accomplish things dreamed of only a few years ago.
As I look up to the sky and try to figure out all the New Space exploration and research that we may see over the next few decades (and centuries), I love seeing Nvidia once again positioned to provide the side high-end and high-margin trend .
Nvidia’s revenue from New Space exploration and research is not yet significant to its overall business. But it’s an extraordinarily strong and relevant company in many other important areas of our world, and we should continue to experience strong long-term growth.
Yes, everyone knows Amazon (NASDAQ:AMZN) is the online retail giant. But fewer realize that the company derives a significant portion of its revenue from its cloud business, which provides AI and machine learning products to a wide variety of customers.
Amazon Web Services officially unveiled a new business segment of aerospace and satellite solutions in 2020. AWS can analyze massive amounts of data collected from space to help customers make important and actionable decisions. For example:
- AWS Ground Station provides satellite owners and operators with global access to their space workloads so they can downlink data and provide satellite commands across multiple regions. The result is that satellite operators do not have to own and manage duplicate ground station infrastructure.
- AWS Ground Station is already used by NASA’s Jet Propulsion Lab and many other customers. The Mars Perseverance rover returns critical and scientific data that is processed and hosted in AWS.
I’ll also note – in case you prefer one giant corporation over another – that Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) provides similar services with Google Cloud. This includes helping NASA’s Frontier Development Lab with artificial intelligence and analytics to accelerate existing research to find life on other planets using “Bayesian” neural networks. More:
- The Google Cloud Platform enables satellite operators such as Airbus Defense and Space to access petabytes of satellite images in real time. Airbus operates a constellation of radar and optical satellites for more than 1,000 customers.
- Google Cloud helps SpaceX by providing data and cloud services to deliver internet service through SpaceX’s Starlink satellites. As part of the deal, SpaceX will actually locate Starlink ground stations in Google data centers.
If you’re considering investing in the New Space race, I recommend a longer-term perspective than usual. The companies in this article will take some time to develop space-related revenue into a meaningful part of their business. However, they all have enormous resources and talents, and even without the space business, they are among the most relevant companies in the world.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.