Market Strategy
by Talley Leger, Chief Market Strategist
June 5, 2026
A Hitchhiker’s Guide to the Space Economy
It’s time-minus seven (T-7) days and counting until the SpaceX (SPCX) initial public offering (IPO), which is targeting a monumental valuation between $1.5 - 2.0 trillion+! To ensure a flawless liftoff, management, banks and investors will be counting down their pre-launch checklists till the final ignition sequence.
This week, I indulge the science fact and fiction fans amongst us – me included – with a thought experiment and related research questions about the broader space economy. Indeed, it’s a thrilling time to look upward and outward! However, scaling and valuing an industry that operates outside our atmosphere requires a shift in how we think about and apply traditional financial models.
While this list is by no means exhaustive, here’s a breakdown of how to practically value the space economy today, why infinite space may not equal infinite value, and a few unconventional frameworks for sizing its market and economic prospects.
1. How can we scale and value the space economy?
2025 / 2026 Space Revenues: The global space economy is currently generating between $400 - 600 billion annually. Roughly 70 - 78% of those revenues are driven by the commercial sector, primarily satellite broadband, ground equipment and launch services. For context, SpaceX alone reported $18.7 billion of revenues for 2025.
2025 - 2035 Projection: Conservative estimates from entities like the World Economic Forum (WEF) point to $1.8 trillion of annual revenues by 2035.
- 2025 / 2026 Space Market Capitalization:
- Public “Pure-Play” Companies:$150 - 200 billion. This group is heavily concentrated among a few leaders, such as Rocket Lab ($83 billion), AST SpaceMobile ($37 billion) and Planet Labs ($18 - 20 billion), which account for the bulk of the industry’s market cap.*
- The SpaceX Factor: SPCX is actively targeting an IPO valuation between $1.5 - 2.0 trillion+.
- · Aggregate “Pure-Play” Sector: If SPCX goes public at the high end of its target range, the aggregate market cap of the “pure-play” space sector immediately resets to roughly $2.1 trillion+.
To scale the industry practically, analysts should divide it into a distinct value chain:
The space economy’s near-term value chain
Sources: WCG, 6/1/26. Notes: GPS = Global positioning system. AI = Artificial intelligence.
2. If space is infinite, is the size and value of the space economy also infinite? It’s tempting to think that the universe is physically infinite, so the economic value waiting to be extracted is also infinite.
Mathematically and economically, however, that may be unrealistic. First, value requires utility and scarcity, not just volume. If a company successfully towed an asteroid made of solid gold or platinum into Earth’s orbit and began mining it, the sudden and massive supply shock would likely crash the precious metal’s terrestrial market price.
Second, investors don’t value the sum of all future output. In finance, we value the present value (PV) of all future output. And the PV of any asset is limited by the time value of money (TVM). Imagine humanity eventually creates an interstellar civilization worth quadrillions of dollars annually. If those cash flows (CF) are centuries away and discounted at 5 - 10%, their contribution to PV is surprisingly modest. Even if the space economy yields infinite resources over an infinite timeline, its PV remains finite as long as the discount rate (r) exceeds the growth rate (g) of its CF, as governed by the standard perpetuity formula:
Third, economic expansion in space is currently bottlenecked by the laws of physics, specifically the Tsiolkovsky rocket equation, which dictates the exponential fuel cost of moving mass:
Profit margins in space are literally weighed down by gravity. Achieving linear increases in mission velocity (Δv) requires exponentially larger launch mass ratios, forcing an ever-greater portion of a rocket’s initial mass (m₀) to be devoted to fuel rather than revenue-generating payload (mf). Space may be infinite, but accessible, economically viable space is highly constrained until we discover and harness new energy sources, efficient sub-luminal propulsion (e.g., solar, nuclear, ion) and theoretically faster than light (FTL) travel (e.g., antimatter, gravity, teleportation, wormholes).
3. Is the Earth’s global market cap a reasonable near- to intermediate-term target and longer-term theoretical lower bound?
Earth’s global market cap currently hovers around $150 trillion.
“Escape velocity” and Mother Earth’s gravitational pull
Sources: Google, Visual Capitalist, WCG, 6/1/26. Notes: UK = United Kingdom. US = United States.
- Near- to Intermediate-Term (Now to 2035): No. Suggesting the space economy will eclipse Earth’s market cap in the next decade implies that orbital and lunar assets will generate more economic output than the entire human civilization on Earth. In the near term, space is a derivative of the Earth economy, meaning we launch things into space to serve people on the ground via data, internet and defense.
- Long-Term Theoretical Lower Bound (Centuries): Yes. If humanity transitions into a multi-planetary species – moving toward a Kardashev Type I or II civilization that harnesses the total energy of our local star system – Earth’s current market cap may eventually look like an early waypoint, rather than an upper limit. For any investable timeline today, however, Earth remains the primary engine and ultimate consumer until we encounter and trade with other planets and civilizations.
4. What are some other creative ways of sizing and valuing the space economy?
Stepping outside of standard Wall Street models, here are three theoretical ways to value the space economy:
- The “Orbital Compute” / “Cold-Data” Thesis: I talked about this on our latest episode of WCG’s The Bull of Wall Street podcast. Rather than valuing space for its physical materials, value it for its environment. Space is incredibly cold and offers 24/7 unhindered solar energy. We could size the space economy by calculating the future demand for AI processing power, pricing out the cost of orbiting data centers against terrestrial power grids, and valuing the sector based on orbital floating-point operations per second (FLOPs) per Watt. Investor enthusiasm regarding SPCX is understandable given that it’s the only company currently capable of building data centers in space.
- The “Delta-V” Reserve Currency: In a mature space economy, the US Dollar may become less relevant than the energy required to move assets between orbits. We could value the economy based on the total mass of refined propellant stored in orbital depots, effectively treating v (the change in velocity) as the “gold standard” of the 22nd century.
- The “Biosphere Preservation” Premium: What’s the financial value of offloading heavy, polluting industries such as semiconductor manufacturing or metallurgy entirely from Earth? We could value the space economy by calculating the trillions of dollars in averted climate catastrophe and ecological restoration on Earth made possible by moving heavy industry into orbit.
5. What’s the range of implied investment returns on the space economy?
Using a $2.1 trillion market cap and $500 billion of revenues as starting baselines, here’s the mathematical range of returns required to reach our theoretical targets:
Implied investment returns
Sources: WCG, 6/1/26. Notes: ROI = Return on investment, assuming the valuation multiple remains unchanged. Forecasts and projections are for informational purposes only, may not come to pass, are not guarantees of future results, and are subject to change without notice.
- The “2035” target assumes the space economy hits the WEF’s conservative $1.8 trillion revenue projection. If the sector’s price-to-sales (P/S) multiple of 4.2x ($2.1 trillion / $0.5 trillion) remains constant as it matures, a 3.6x ($1.8 trillion / $0.5 trillion) increase in revenues implies the aggregate market cap would grow from $2.1 - 7.6 trillion.
- The “Earth market cap” target measures the raw expansion required for the space sector’s current market cap ($2.1 trillion) to equal the current global market cap of all public equities on our planet ($150 trillion).
*Traditional aerospace companies, such as Boeing, Lockheed Martin and Northrop Grumman, account for hundreds of billions of dollars of additional market cap. However, analysts generally exclude them from “pure-play” sector valuations because space represents only a fraction of their total operations.
Portfolio Strategy
by Jim Worden, CFA®, CMT®, CAIA®, Chief Investment Officer
June 5, 2026
Why I Believe Active+Passive Is a Better Approach Than Passive Only
I am in the midst of going through my quantitative process that includes reviewing the stock charts for the 5,000 most liquid companies in the world.
I have fine-tuned the process and can get through it in a timely manner, but this is an area that I will leverage AI to assist with more. Most often, there are a few charts that jump out – either for good or for bad. Below is a chart for a company that jumped out recently.
This company was delisted on November 28, 2025 at $0.42 a share. It had a meteoric rise coming out of the pandemic, climbing more than 1,560% in a little over one year. Investors thought that this was a persistent theme that would last a long time. At some point, the fundamentals, technicals, and macro each broke down. This was a holding in the Russell 2000 index, albeit small.
It’s not a perfect example of a failing company, but I like this example because any of our three toolkits – fundamental analysis, technical analysis, or macroeconomic analysis – could have flagged it. But an index wouldn’t have explicitly flagged it. An index would have given it a smaller weight over time until it was removed. This is fine if the starting weight for an investor is very small. If the weight is larger, this represents a slow erosion of an investor’s capital. Because the loss plays out inside the index itself, it never shows up as underperformance (negative alpha) against that index. So investors may not even notice from any index reporting. But if an investor owned each index component, they would have noticed the value getting smaller and smaller, especially if it started out higher.
Don’t get me wrong. I actually like indices. But I believe good portfolio construction blends the best components of indices – low cost, broad investment exposures – with active management that deploys extra tools for the investor – fundamental analysis, technical analysis, and macroeconomic analysis – all wrapped with a risk-managed process that doesn’t allow too much concentration in a handful of names.
Having an approach that utilizes both active and passive can limit and manage exposures to stocks that might be a drag on total returns.
To be clear, there are times when fundamental, technical, and macroeconomic analysis wouldn’t flag a bad investment. But these are usually cases of accounting fraud and few may be able to foresee these. For most of the large company failures, one or more of these toolkits will catch it.
Below is a Venn diagram that shows exactly why we like to use these tools together. This is using the example of the mystery stock above.
But the three toolkits also work to find companies that are firing on all cylinders – they are in a strong uptrend, have improving fundamentals, and often have macroeconomic tailwinds that are a boon to their business. Three positives from the toolkits can also mean stronger conviction until one of the toolkits gives us a red flag.
All data is from Bloomberg. Claude helped generate the original Venn diagram, which was edited for clarity.
Definitions
SpaceX is a private American aerospace company founded by Elon Musk that designs, manufactures and launches advanced rockets and spacecraft. It is famous for creating reusable rockets and operating the Starlink satellite internet constellation.
An IPO is the process where a private company sells its shares to the public on a stock exchange for the first time. It allows the general public to buy a stake in the business and helps the company raise a large amount of money.
Market Cap is the total dollar value of a public company’s outstanding shares of stock. It’s calculated by multiplying a company’s total shares by the current market price of a single share.
A P/S Ratio is a financial metric that compares a company’s stock price to its annual revenues per share. It shows how much investors are willing to pay for every dollar of sales the company generates.
The WEF is an international non-profit organization based in Switzerland that brings together global political, business and cultural leaders to shape global and industry agendas. It’s best known for its annual meeting of elites in Davos.
TVM is a core financial concept stating that a sum of money in your hand right now is worth more than the exact same sum promised in the future. That’s because money today can earn interest, grow through investments and avoid the eroding effects of inflation.
One of the foundational equations of finance, the standard perpetuity formula is PV = CF / r, where PV = present value, CF = cash flow per period, r = discount rate.
The Gordon Growth Model is PV = CF1 / r - g, where CF1 = next period’s cash flow, r = discount rate, and g = perpetual growth rate.
One of the foundational equations of astronautics, the Tsiolkovsky rocket equation is Δv = Ispg0 ln (m0/mf), where Δv = change in velocity required for a mission, Isp = specific impulse (a measure of propulsion efficiency), g0 = standard gravity at Earth’s surface, m0 = initial mass (vehicle + fuel + payload) and mf = final mass after fuel is burned.
The equation implies that required propellant grows exponentially as mission Δv increases. Equivalently, payload fraction falls rapidly as mission requirements become more demanding.
The Kardashev Scale is a framework proposed in 1964 by the Soviet astronomer Nikolai Kardashev to classify civilizations according to the amount of energy they can harness and use.
A Type I Civilization (Planetary Civilization) can utilize essentially all the energy available on its home planet.
A Type II Civilization (Stellar Civilization) can utilize a substantial fraction of the total energy output of its star.
Orbital FLOPs per Watt measure the energy efficiency of computers processing data directly in space. It calculates how many mathematical operations a satellite or spacecraft can perform per second for every watt of electrical power it consumes.
Fundamental analysis: Evaluating a company’s financial health and underlying value by examining items such as revenue, earnings, debt, and cash flow.
Technical analysis: Studying a security’s price and trading-volume history, often through charts, to assess trend and momentum.
Macroeconomic (top-down) analysis: Assessing broad economic and industry conditions, such as interest rates, growth, and demand cycles, that can affect a company or sector.
Index: An unmanaged, rules-based group of securities used to measure the performance of a market or market segment. Investors cannot invest directly in an index.
Russell 2000 Index: A widely followed index of approximately 2,000 smaller U.S. companies, commonly used as a benchmark for small-capitalization (“small-cap”) stocks.
Index weighting: The proportion each security represents within an index. In a market-capitalization-weighted index, that proportion rises and falls along with the security’s market value.
Alpha (active return): The portion of an investment’s return above or below its benchmark. A negative active return reflects underperformance relative to the benchmark.
Delisting: The removal of a security from a stock exchange, after which it no longer trades on that exchange.
Liquidity: The ease with which a security can be bought or sold without materially affecting its price.
Active management: An investment approach in which a manager selects securities, adjusts exposures, or uses research with the goal of managing risk, enhancing returns, or achieving a specific investment objective.
Passive management / index investing: An investment approach that seeks to track the performance of an index rather than actively selecting individual securities.
Market-capitalization-weighted index: An index in which larger companies receive higher weights based on their total market value, while smaller companies receive lower weights.
Concentration risk: The risk that a portfolio has too much exposure to a small number of securities, sectors, industries, or themes.
Relative strength: A measure of how one security, sector, or asset class performs compared with another security, sector, asset class, or benchmark.
Value trap: A stock that appears inexpensive based on valuation measures but continues to decline because the underlying business, industry, or financial condition is deteriorating.
Reverse split: A corporate action that reduces the number of shares outstanding and increases the share price proportionally, without changing the total value of an investor’s position at the time of the split.
Leverage: The use of debt or borrowed capital. Higher leverage can increase potential returns but can also increase financial risk.
Disclosures
This material is for informational and educational purposes only. It is not investment, legal, or tax advice, and it is not a recommendation, offer, or solicitation to buy or sell any security or to adopt any investment strategy. It does not consider the investment objectives, financial situation, or particular needs of any individual investor.
The company discussed is a single, anonymized example selected to illustrate an analytical concept. It was identified with the benefit of hindsight, is not representative of any current or past client holding or recommendation, and does not reflect the results of any strategy. A single example is not indicative of the results of any analytical process.
Statements describing what fundamental, technical, or macroeconomic analysis “could have” flagged are hypothetical and made after the fact. Hypothetical and retrospective analyses have inherent limitations, do not represent actual trading or client results, and may differ materially from outcomes achieved in live conditions. There is no assurance that any analytical method, or any combination of methods, will identify losing investments, avoid losses, or produce profitable results.
The Venn diagram is intended only as a simplified illustration of the analytical framework. It does not represent a complete investment process, model output, or all factors that may be considered in evaluating a security.
Investing involves risk, including the possible loss of principal. Past performance is not a guarantee of, and is not indicative of, future results. The use of multiple analytical methods and diversification do not ensure a profit or protect against loss in a declining market.
Indices are unmanaged, are shown for comparison only, do not reflect the deduction of advisory fees or other expenses, and cannot be invested in directly.
References to active and passive investment approaches are for educational purposes only. Active management, passive management, and blended approaches each involve risks and may not be appropriate for all investors. Active management may underperform an index or passive strategy, and may involve higher fees, expenses, turnover, or tax consequences.
The views expressed are those of the author as of the date shown and are subject to change without notice.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment Advice offered through WCG Wealth Advisors, LLC, an SEC Registered Investment Advisor. WCG Wealth Advisors, LLC and The Wealth Consulting Group are separate entities from LPL Financial. Index performance is shown for illustrative purposes only and does not predict or depict the performance of any investment. Past performance does not guarantee future results.
All information in this report is believed to be from reliable sources; however, WCG Wealth Advisors, LLC, makes no representation as to its completeness or accuracy.
In general, stock values fluctuate, sometimes widely, in response to activities specific to the companies as well as broad market, economic and political conditions. Stock investing involves risks, including fluctuating prices and loss of principal. Value investments can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time. (135-LPL) International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. (93-LPL)
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk. (116-LPL)
The fast price swings in commodities will result in significant volatility in an investor’s holdings. Commodities include increased risks, such as political, economic, and currency instability, and may not be suitable for all investors. (122-LPL)
Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. (28-LPL)
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. (26-LPL)
Standard deviation is a historical measure of the variability of returns relative to the average annual return. If a portfolio has a high standard deviation, its returns have been volatile. A low standard deviation indicates returns have been less volatile. (131-LPL)
This is for educational / general purposes only, does not constitute investment, tax or legal advice and should not be relied on as such. This is not to be construed as an offer to buy or sell any financial instruments. Any strategies discussed are not intended to be relied upon as the sole factor in making an investment decision for any individual. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before investing. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested in directly. These comments should not be construed as recommendations but as an illustration of broader themes.
Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations. In addition, forward-looking statements, including index targets or market scenarios, are hypothetical in nature, reflect current views and assumptions and are subject to change based on market and economic conditions and are not guarantees of future performance. This is a hypothetical example and is not representative of any specific investment. Your results may vary. (88-LPL) Scenario outcomes are illustrative and not predictive. This does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial professional before making any investment decisions.
The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly. (102-LPL)
Government bonds and Treasury bills are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
Publication Date: June 5, 2026
For Public Use in the US
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