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Private Space Explorers Set to Gain From NASA’s 2020 Budget

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NASA’s budget request for fiscal year 2020 could prove to be a blessing for numerous American private companies operating in the space arena. The $21-billion space budget could offer ground-breaking opportunities for these corporate giants to bank on.

NASA’s 2020 Objective for Space

In a statement released earlier this week, NASA Administrator Jim Bridenstine highlighted the budget’s primary objectives. These include going to the Moon and exploring it for the next 10 years, sending astronauts to Mars and researching on transformative aeronautics technology.

However, the most crucial bit of information revealed by NASA was that it is starting an array of small commercial delivery missions to the Moon. Considering there are a few prominent U.S. space companies developing cutting-edge space technologies, rockets and propulsion systems, these stand to gain significantly.


Tesla, Amazon to Benefit From Commercial Missions

SpaceX TSLA and Blue Origin AMZN could benefit immensely from NASA’s commercial space mission. These companies are striving to develop cheap space infrastructure such as reusable rockets and spacecraft, which could bring down the cost of space travel tremendously, thus increasing access to space.

In addition, SpaceX’s new endeavor to manufacture rockets meant for transporting humans and cargo beyond Earth’s orbit puts its ambitions in line with NASA’s objectives. The independent space agency has a budget of $363 million to assist companies in developing “a large lunar lander” that will take cargo and humans to Moon. At present, SpaceX and Blue Origin are NASA’s top candidates for lunar lander funds.

Both Tesla and Amazon carry a Zacks Rank #3 (Hold). Tesla has outperformed the broader industry in the past two-year period (+13% vs. -6.2%). Amazon has also outperformed the broader industry in the same period (+98.3% vs. +52.3%).

NASA’s traditional contractors such as Lockheed Martin (LMT) and Boeing (BA) are also competing for the agency’s many awards. Bridenstine said on Mar 13 that NASA won’t wait for Boeing’s immensely expensive rocket for deep space explorations. In fact, the agency will continue using its space launch system Orion spacecraft, primarily used for the same. Lockheed Martin is NASA’s major contractor for Orion.

Broader Space Exploration Benefits Space Industry

According to a Morgan Stanley report, the global space industry is poised to generate revenues of $1.1 trillion or more by 2040. As more opportunities for space exploration and innovation crop up in the space industry, investments will increase as well.

Apart from SpaceX and Blue Origin, several other corporations have also taken a keen interest in developing low-priced space infrastructure. The trend is reflected by the fact that nine other companies are bidding for up to $2.6 billion in contracts this year for lunar transportation to fulfill NASA’s futuristic objectives.

In fact, Morgan Stanley’s list of “Space 20” stocks provides an insight into the companies that are expected to benefit from the space industry’s exponential growth. The list includes corporate giants such as Apple AAPL, Alphabet GOOGL and Microsoft MSFT among others. This improves their investment worthiness to a significant extent.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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