Understanding space stocks: the next big opportunity?

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’ll 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, a couple of things to mention. First, this webinar is for educational purposes only and does not constitute financial advice.

Second, we’d love to hear from you. We’ve already had some excellent questions through on Slido. If you’d like to ask a question to our panel, head to Slido.com and use the code 7212046.

There is also a QR code on screen. If you scan that, it will take you directly to the Slido page.

If you see a question on Slido that you like, give it a thumbs up. That will increase its chances of being asked and answered.

Thank you if you’ve already sent in a question. We’ve had some excellent ones that have helped shape today’s discussion.

We’ve got about 40 minutes today. We’ll introduce our panel, go into questions around the desk, and then move on to questions from you.

Let’s introduce our guests.

We have Mark Boggett, CEO and co-founder of Seraphim Space, a global investment firm dedicated to investing in the space tech sector.

We also have James Lockyer, technology equity analyst at Peel Hunt. He helps companies distil their sometimes complex stories for institutional investors, and helps those investors make buy and sell investment decisions.

Let’s kick off with some questions. It’s obvious what we’re going to start with, given the big event last week, which would have been impossible to miss: the SpaceX IPO, generating around $75 billion and valuing the company at over $2 trillion, making it already 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.

Some eye-watering numbers. Mark, let’s start with you. How surprised were you by this success, and what are your key takeaways from last week?

Mark Boggett: No surprise about the success.

With the relatively small free float, all the indices needing to buy in, and the global interest in the world’s largest IPO, it was inevitable that we were going to see a strong first day’s trade.

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

Victoria Scholar: There is much more to it, and we will get to that. But just before we move beyond SpaceX, James, for an investor who is probably relatively new to this sector, how should we think about this business?

There are so many different moving parts: designing and building rockets, Starlink, Starshield, the AI component, and then the broader long-term vision Musk has of colonising Mars and self-growing cities on the Moon.

Do you have to believe in that sci-fi, long-term colonising-Mars story to buy shares, or is there an investment case for the next one to five years?

James Lockyer: You’re right. It is a complex business.

Some of the headlines over the weekend were asking whether investors are buying a space company or an AI company. The way investors could think about it is that it is a telco because of the connectivity and satellite business. It is an industrials business because of the rockets. And it is an AI software infrastructure play.

It is a business made up of different businesses, but those businesses themselves are not too complicated to understand. When it comes to piecing them all together, I would argue there might even be a missing fourth element: energy.

Each of those elements is trying to take us into space and create an ecosystem or industry there. You need connection, you need to get there, and you need power and energy. In theory, that is what he is building.

The first ramp was rockets. That is the hardest part of getting into space: getting off Earth. He has done that successfully and brought down the cost quite dramatically.

Connectivity is the first use case. He talks about data centres in the sky, and that is the next use case, probably in a few years’ time.

On Mars and the Moon, I would argue Mars is further out, but the Moon less so. Given that getting off Earth is the hardest part of getting into space, if you can bounce off the Moon, you can go a lot further. Once we are off Earth and on the Moon, potentially using the Moon’s resources, that could take us further into space.

Victoria Scholar: Mark, what is the impact of the IPO on the broader market and the potential to bring additional capital into the asset class?

Mark Boggett: It has broadened the appeal of space.

Space is now of interest to private equity, sovereign wealth funds and retail investors. That has already led to a surge in investment in other space stocks, which have been gaining traction in recent weeks.

It has also led to broader interest in private companies across the market. For example, we run an index that measures private investment coming into space on a quarterly basis, and the Q1 figure was 100% up on the previous quarter. Those were record figures for one quarter, and we expect that to continue as the year plays out.

Investors doing their diligence and research around SpaceX are discovering a broader market opportunity. It starts with launch and communications, then moves more broadly into Earth observation, energy and all the other areas space serves.

Victoria Scholar: Final question on SpaceX, James. What do you make of this lofty valuation? Do you think it’s justified, or will we look back and see this IPO alongside potential IPOs from OpenAI and Anthropic as a sign of the top of the market?

James Lockyer: Without going down the investment advice route, I would say a couple of things.

If he gets to $1 trillion of revenue, you can see how someone might look at the valuation and say it makes sense, if he gets there.

The difference between this and previous bubbles, such as dotcom in the 2000s, is that there are real revenues here. There are real customers and real activities taking place. In the dotcom era, companies could add “.com” to their name and get a frothy valuation. Here, at least, there are strong revenues, strong growth and real customers.

Companies like Anthropic and OpenAI, which are also in the pipeline, are using SpaceX technologies in some areas. Amazon is there as well.

The fact the IPO has been a success so far is a good thing for the IPO market going forward.

Mark Boggett: I think we’re in a boom rather than a bubble.

Victoria Scholar: Okay. Let’s move beyond SpaceX and talk about the space economy more broadly.

A lot has changed recently. Launch costs have fallen sharply, there has been a rise in reusable rockets, and there has been a big increase in satellites. The landscape has changed drastically. James, talk to us a bit about that.

James Lockyer: One of the things SpaceX has done extremely well is go back to first principles, which is one of Elon Musk’s principles.

Getting into space has become a lot cheaper. In the space shuttle era, I think it was around $50,000 per kilogram. Now it is around $200, and he wants to get below that. That means getting into space is much cheaper.

A big part of that is reusable rockets. For decades, there was no such thing as a reusable rocket, so everyone thought that was just how things were done. Musk asked why, looked at the physics, and reframed the problem.

He also vertically integrated a lot himself and looked at the actual cost of building a rocket, the materials and what could be done more cheaply.

One of the big costs of getting into space is fuel. Ironically, the more fuel you have on a rocket, the more fuel you need, because you need to get the fuel into space as well. If you can reduce that, getting into space becomes a lot cheaper.

Once you are in space, there is low gravity, very low temperatures and other conditions that allow things to be done that can’t be done on Earth, or at least can be perfected in space.

That could include materials creation or medicines, where crystals can be created more perfectly in a vacuum or low-gravity environment.

The opportunities are almost endless. Getting into space is where we are now, and bringing that cost down could lead to a Jevons paradox, where a resource becomes cheaper and more efficient, and therefore we use much more of it.

Victoria Scholar: What are some of those use cases? Perhaps you could give some obvious examples and some more obscure ones — some current and some future.

Data centres have been a massive topic of discussion, given the huge capex from hyperscalers on Earth and the restrictions becoming clear with power demand. There has been increased talk about data centres in space. Give us a few examples.

James Lockyer: There are some great companies in Mark’s portfolio, which I’m sure he’ll touch on.

The obvious one is connectivity through satellites. There are companies doing Earth observation in different ways. We’ve all seen Google Earth or Apple Maps, where the picture is literally from space, but that doesn’t cover every opportunity because it doesn’t see through clouds.

There are radar satellite companies that can do that, and there is thermal imagery — a different type of photography from space.

Earth observation is important for disaster recovery and defence. Ukraine has used Earth observation. Insurance is another example. If you could detect what was happening in a disaster recovery area, insurers could work out the value of claims more quickly.

There is also deforestation monitoring. That is a relatively obvious one because we can picture it.

Then there are less obvious examples, such as data centres in space. At the moment, one of our biggest energy users on Earth is AI, and that is not going to change. If we can take data centres into space, where solar energy is available all the time, and use satellites like Starlink to communicate with them, you could ask a Grok question, have it processed in space and bring the answer back to Earth.

There is also in-space manufacturing. There is water at the poles of the Moon, discovered a few years ago. If we can harness that and take hydrogen and oxygen, suddenly you have a petrol station in the sky, which can allow people to travel onward from the Moon.

Victoria Scholar: What kind of time horizons are we thinking about for these examples?

James Lockyer: It could be anything from one to 50 years, but Musk said in his S-1 that he wanted data centres in space over the next few years, possibly by 2030.

That could be relatively soon. If we can take AI power usage off Earth, what could that power be used for here? Could it bring down prices? Could we be more efficient on Earth?

The nearest opportunity is Earth observation, and there are a couple of companies doing that.

Mark Boggett: I’ll pick up on the data centre point.

For phase one of data centres in space, don’t think about a giant building floating around. What it will really be is a distributed group of satellites — a satellite constellation.

That is why SpaceX is so well positioned to bring the first operational data centre together. It has the launch capability and is a market leader in that area. It has brought out Starship, which is 10 times bigger than the Falcon 9, with 10 times more capacity. That lends itself to putting more satellites into space.

It also has the world’s largest satellite manufacturing plant, where it has already produced more than 10,000 Starlink satellites. Converting those into data centre satellites seems like a fairly straightforward step.

All the conditions are in place to enable the growth of this distributed data centre, and I think we’ll start seeing that by 2030.

Victoria Scholar: Are there any of your portfolio companies you want to highlight that fit into any of those buckets James mentioned?

Mark Boggett: Absolutely. Our portfolio of 26 companies through our investment trust fits into all of those buckets.

Earth observation is probably where we have spent most time investing. This is about new, capable sensors in space that are higher resolution than we’ve ever seen before. Because it is so cheap to put up large constellations, the data you can access from those satellites is moving closer and closer to real time. That is game-changing.

One of our companies, ICEYE, is a Finnish company that has developed a radar satellite constellation. Radar allows them to see the ground from space in all conditions, day or night, regardless of cloud or weather. They can see something the size of a pizza from space, and currently they can see that every hour.

As they double and treble the size of their constellation, that moves from every hour to every half hour, then every 15 minutes — effectively real time.

There are myriad applications for that. Defence is the biggest customer at the moment. But closer to home, think about using Google Maps as you drive into town looking for a parking space. This type of technology could identify parking spaces in real time and guide you into them.

Earth observation is a giant market, and one being driven by defence at the moment.

We also have a company focused on next-generation GPS. Why do we need another GPS? Because the current one is not very accurate. It is only accurate to between one and 10 metres, and more importantly, it is not secure. It is easy to spoof, which means you can’t always rely on the data.

For use cases such as autonomous vehicles, that is a challenge. One of our portfolio companies has developed a satellite constellation that is centimetre accurate and military-grade secure.

We believe that is the unlock for our autonomous future: autonomous cars, drones and robots. Waymo can use sensors all around the edge of the car, but you can’t put those same sensors on a drone or a robot. This kind of GPS innovation is something the market desperately needs.

Our portfolio also reaches into new forms of energy. We have a portfolio company developing nuclear power batteries the size of a microwave to provide power for spaceships and satellites.

Their first customers also include ground-based vehicles and submarines. This is modular energy that can provide a 10-year power source. It draws on the Apollo era and how nuclear power resources were used then, but brings it up to the modern day.

Victoria Scholar: Fascinating. Clearly no shortage of opportunities — they seem endless. But with opportunities, of course, comes risk.

James, do you want to highlight some of the risks?

James Lockyer: One risk that is on everyone’s mind, at least within the industry, is Kessler syndrome.

That is where something knocks into something else in space and creates a domino effect that can impact the whole of space. Even if a foreign nation wanted to disrupt another nation’s satellite, they would have to be careful that it didn’t affect their own assets.

It is a worrying scenario. Fortunately, there are companies trying to solve it. SpaceX’s Starlink satellites have thrusters and AI that help them know where to go so they don’t collide with other things.

Space debris is another issue. There are tens of thousands of items in space floating around — excess rocket parts, satellites and other debris. Reusable rockets could reduce that in future, but it remains a problem.

There are companies looking at mini-thrusters so that if a satellite detects something coming towards it, it can move quickly out of the way and then return. There is also the question of knowing where to place satellites based on trajectories.

That has to involve AI. Part of SpaceX’s AI investment is likely to be about ensuring its satellites, and potentially clients’ satellites, are put in the right place to avoid that kind of event.

If such an event happened, things we rely on, such as GPS, could go out of operation.

Victoria Scholar: Final question before we get to audience Q&A. Mark, your investment trust, SSIT, is trading at a discount to NAV. What’s going on?

Mark Boggett: I wish I knew the answer. The only thing I can tell you is that it shouldn’t be.

Our largest shareholder has been reducing their holding, from 13% down to around 5% over the past week. I think that is weighing heavily on the share price at the moment.

Last week, we announced that our largest holding, ICEYE, had effectively doubled its valuation and was now valued at $10 billion. The 75p per share uplift in NAV that we announced has not been reflected in the share price.

I think it is only a matter of time before that gets reflected in the value. It looks like a single seller has been pushing the price down.

Victoria Scholar: Let’s get on to Q&A.

This one might be for you, James. Graeme asks: I’ve read some commentators suggest the SpaceX IPO could depress the rest of the space market and soak up hundreds of billions of capital. What do you think?

James Lockyer: It has been a successful IPO so far, if you define successful as the share price going up on the day.

Other companies, not necessarily in the space industry, that have been considering IPOs will look at that and see that there is hunger for what is out there.

Mark mentioned earlier that it was a relatively small free float. It raised double-digit billions, so the amount raised was not as massive as the valuation suggests.

I think the most important point is that it has been successful so far. If it had gone the other way, some other IPO candidates might have taken a step back. But given what has happened, hopefully it will bring others out of the woodwork.

When it comes specifically to space, SpaceX is a very large company. There are plenty of other space companies that are not as big and would be relevant for different audiences, stock markets and listing venues around the world.

It might encourage others to test the water and see what appetite is out there. I hope we’re in a positive phase going forward, and I’m looking forward to seeing what comes next.

Victoria Scholar: It’s definitely on trend in space.

Mark Boggett: The pricing of SpaceX is encouraging investors to look at what else is available in the space market and where there is value. I think that will continue.

As the lock-in on SpaceX shares comes off, that could lead to existing shareholders selling down. Where will that flow of capital go? I believe a significant proportion will be reinvested in the space market.

This is a long-term growth market. Investors who have already bought into the space category are likely to reinvest in other parts of the market. I think there will be a trickle-down effect from the SpaceX IPO, and I think it will continue.

Victoria Scholar: A question from John: 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, we were third behind the US and China in terms of the number of space companies that received investment and the amount of capital that went into those companies. In 2025, we fell into fourth place behind Germany.

We have always invested significant sums into the emerging technology area of space, and I expect that to continue. You have big investors like the British Business Bank, which is focused on this area, and specialist investors like ourselves.

To my knowledge, we are the only public space investment fund outside ETFs. We play our part in investing into the UK. The UK has strong entrepreneurs and a good flow of private space businesses.

I’ll leave James to talk about the public ones.

James Lockyer: There aren’t too many public investment companies in the UK that you can invest in directly. There are a couple that are space-adjacent.

For example, Filtronic has SpaceX as a client. There are satellite companies, communications companies, and companies that use space data.

The UK has a historical legacy in space, but for regulatory or government tax reasons, we haven’t been able to attract and retain listed space companies; they have gone elsewhere.

I hope the trickle-down effect from SpaceX means the UK, which is ripe for this, can attract some of its private space companies to the market.

Victoria Scholar: We’ve got a question here, probably for you, James: what is the business case for Tesla eventually being folded into SpaceX? Dan Ives from Wedbush has talked about this and thinks SpaceX and Tesla could merge in 2027. What are your thoughts?

James Lockyer: That’s an interesting question.

Musk has merged a number of his other businesses into it. Tesla vehicles are not just cars; they are effectively computers with wheels attached. They are very sophisticated computers with limited moving parts, which is part of what has made them successful. They can be upgraded over the cloud, and of course they are electric vehicles.

If SpaceX were to do anything, I think it would need to do something in energy to complete its portfolio.

There is also robotics, which Musk wants to lean into through Tesla rather than just cars. If you have in-space manufacturing, that will require robotics to do things humans can’t do. That could be an angle.

Victoria Scholar: Mark, this one’s for you. Sabuhi asks: have investors missed the opportunity to invest in space stocks?

Mark Boggett: I think the reality is that we are really at the start of the growth of this market.

If you look at the last 10 years, they have been fuelled by low-cost access to space through Falcon 9. What we are now looking at through Starship is a rocket that is 10 times bigger. The pricing is not clear yet, but it is likely to be a tenth of the cost. SpaceX is saying it will do a couple of hundred launches a year.

This really is the dawn of the era of mega infrastructure in the space environment.

What is mega infrastructure? It is things like cell towers in space, data centres in space, energy generation in space to bring clean energy back to Earth, and manufacturing in the space environment.

Every protein and every molecule behaves differently in the zero-gravity environment of space. That could lead to breakthroughs in biopharma for new drug discovery, and in new materials, such as synthetic rare earth materials.

There are so many broad areas being catalysed by this new low-cost launch capability. At the same time, capital wants to find its way into the market, and AI is a real enabler for making that happen.

I really think we are still on the first rung of the ladder.

James Lockyer: To take that one step further, one of the headlines I’ve seen is that people don’t understand the business because it is complex. Another is the $28.5 trillion TAM — total addressable market — that has been cited. People look at that and ask where the number comes from.

But taking Mark’s point further, the cost of getting into space is the single biggest factor. It means that number may actually be higher over time.

That brings us back to Jevons paradox. In the 19th century, as the efficiency of the steam engine improved, in theory we needed less coal to run it. But demand for coal skyrocketed because we were doing more things with steam engines than we ever thought possible.

It is the paradox of something becoming easier to use, which means we use much more of it. Are we at the beginning? I would definitely say yes.

Mark Boggett: From a valuation perspective, SpaceX is worth a couple of trillion. The next most valuable space company is around $50 billion, and the one after that is around $40 billion. Then you are into the tens of billions.

I think this market is likely to level out over the next three to five years. We are going to see many more companies from the space market valued in the tens of billions, and some breakthrough successes above $100 billion.

They will cover all the areas we’ve discussed today, each of which could have a huge impact on humanity. These are big TAMs.

Victoria Scholar: It sounds like we talk about the space sector now, but in 10 or 20 years we may not call it the space sector. It will just be part of other sectors — energy, defence, pharmaceuticals and everything else. Space will be an integral part of all of that, similar to tech in a way.

Mark Boggett: It is like AI. You don’t say “the AI sector” because it is a facilitating horizontal capability that drives all sectors.

I think space is exactly the same. In the same way you wouldn’t own Nvidia and say your AI exposure is complete, I think investors are coming to the conclusion that you wouldn’t just have exposure to SpaceX and believe you have the whole space market covered.

Victoria Scholar: Is it challenging to know which parts of the market are going to succeed and which are going to fail?

Mark Boggett: Yes, it is very challenging.

You have to spread your net. There are still only a limited number of new space companies. These are companies using components from other industries, such as 3D-printed components. They are typically privately financed, and there is still a relatively limited pool of them.

Those companies are now scaling and IPOing. The number of companies available to the public market is going to increase significantly over the next three to five years.

Victoria Scholar: We’ve got a question from Matt: the current space race seems very North America-focused. Are there any emerging space investment opportunities from China, for example, that you want to highlight?

Mark Boggett: The Americans will tell you they are neck and neck with the Chinese. There has been huge investment in China in this area, and this is one of the things driving the space race.

There is a focus on the Moon, landing on the Moon, accessing the ice and raw materials there, and establishing a rule of law on this new planet.

From a government perspective, that is what is happening. From a private perspective, there are equivalents to Starlink already operational from China, seeking to win the communications market.

In every other subsector of the market, there are Chinese companies operating and growing quickly.

Today, the market is very split between the West and China, so most companies are not yet coming up head-to-head against Chinese competition. But I think that is likely to increase over time.

Victoria Scholar: A question from Anonymous: is Seraphim effectively a customer of SpaceX in terms of space launch platforms for Seraphim’s company holdings?

Mark Boggett: Yes, 100%.

SpaceX uses something called transporter missions, where they open up a launch for new space private companies to participate. They typically get up to 100 satellites on a single launch.

Seraphim companies normally represent about 20% to 25% of each of those launches.

SpaceX has really underpinned our ability to back these companies that are rapidly getting their satellites into space.

Victoria Scholar: James, this is probably our last question. Alan asks: there have historically been some interesting transactions between Mr Musk’s companies. Is it not a concern that retail investor money is going to be used to enhance his personal fortune?

James Lockyer: It is a tricky one.

His personal fortune has certainly been enhanced. But the transactions and acquisitions that have been made have been to build this group of companies that, in theory, work together.

As I mentioned, you need launch to get into space, connectivity to communicate in space, and AI to run space.

I wouldn’t be surprised if there are others, as you mentioned earlier with Tesla. But logically, the building of this conglomerate makes sense given where we are today.

Mark Boggett: I’ll add my two pennies.

I think Musk genuinely wants retail investors to participate in the upside of the growth of the space market.

We’ve referenced my view that we are only at the beginning of the growth. I believe he believes that too.

SpaceX is a company everyone knows about, but it has been difficult to access because it has been private. It has been difficult for retail investors to get exposure. I think that is why he genuinely wanted to bring in the retail community and allow them to participate in the next phase of growth.

Victoria Scholar: We very much hope to see more opportunities for retail investors moving forward.

A massive thank you to our wonderful 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 here for another webinar soon. Thank you so much for taking time out of your busy day to listen to us.

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Thank you, and goodbye.