Ep. 318 How Rocket Lab And ASTS Are Creating Out-Of-This World Innovations
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Hello and welcome to another episode of the Investing with IBD podcast. It's Justin Nielsen here, your host, and it is April 30th, 2025. We've got another month in the books and quite a month it's been between Trump tariff talks, the pauses, and all sorts of news items kind of tossing things to and fro. But, you know, today we want to talk a little bit about some of the future, some of the things that could be happening in

on the horizon. And to help us do that, we are very happy to welcome back Andrew Channon. He is, of course, the CEO of ProcureAM, which has a, you know, ETF, UFO. As you could imagine, it's a little bit about space. So we'll be talking about the new space race, what it means for defense, communications, getting satellites up. And welcome back to the show, Andrew.

Thanks for having me. Absolutely. So last time we had you on, I think we were having a lot of discussions. We've had you on a couple of times, so I might be getting my appearances confused. So forgive me. But I know that when the Ukrainian war started, we talked a lot about how much space was involved with the war, from the initial recognition of Russian troop buildups

And, you know, to, you know, once the war actually started. So it really seems to have kind of changed things in a big way. Now that we're, you know, a few years into that war, unfortunately, have you noticed any kind of continuation of that trend or even escalation?

So, you know, I think we were probably talking about that time, how, you know, military strategies from around the world have now considered space to be the strategic high ground for warfare. And I think what the Ukrainian Russian conflict did was it brought to everyone's attention how crucial space is, you know, from a, from a military standpoint, even from a trade standpoint, because if you recall in Kazakhstan, you know,

a Russian-controlled spaceport, they were holding hostage a dozen or so one-web satellites where the UK government was one of the largest investors in that project. And so the ability to buy parts for rockets, the ability to access your own things that you've already paid for,

the ability to interfere with satellite connectivity, all of these things have become extremely important. And what did SpaceX do? They provided Starlink for Ukrainian forces and government so that they'd be able to have hopefully uninterrupted communications.

Many people originally got very excited by the idea that Starlink was stepping up and providing these services and in some cases able to do so in incredibly fast time periods. But

But now, as Elon Musk has become closer with President Trump, we've seen certain countries become less willing to want to work with SpaceX or Starlink. So they're starting to say, OK, well, should we find another provider? OK, should we find one from the U.S. or should we look internally?

And so geopolitics is starting to look the same way that we're looking in the US for secure supply chains, for national security and not necessarily wanting to rely on other nations who could possibly change their friendship with us at a whim.

Other countries are starting to look similarly, and they're saying, do we have the ability to produce something at home? If you're something like the EU, is there another nation in the EU that's able to provide these? And they're starting to look at those as serious players or options for them to be purchasing their services from in the future. And that is kind of reshaping how everyone is looking at the space industry. So it's a multifold approach.

And one that we haven't reached any necessary conclusion yet. But in many cases, you want the best product you can get available at the best price. And if you're saying, hey, we want that, but we're going to exclude these couple options because X, Y, Z, you might end up with a more expensive one. You might not end up with it on time or it might be of inferior quality unless the European providers are able to really step their game on it.

And I guess one of the questions, because, again, when we're talking about investing in some of these companies, you know, you've got SpaceX, which is private. So, you know, that's that's off. But, you know, there's there's so much jostling for position market share, whether or not, again, the whims of, oh, we want to be, you know, U.S. or outside of U.S., specifically.

So how do you kind of gauge who the leaders are and how quickly do you have to shift to say, oh, you know, the winds are changing and now the it seems like this is more in vogue as opposed to other companies. How do you keep track? Yeah.

No, it's tough to say. That's why, you know, so as you mentioned, we created UFO. It's a global space focused ETF. It's not just domestic. It has over 30 names in it. And that allows us to have a focus on the entire global space industry. So like you said, SpaceX is private, but it doesn't exist in its own little bubble.

And so what we'll actually see is, you know, sometimes things that SpaceX does like significantly reduce the cost of launch can help other companies like those that may build satellites or be a company that wants to expand, you know, it's reached into space related activities, businesses and services, and it wants to access space to further grow their business. Well, something like lower launch costs absolutely helps. And so, yeah,

You know, for us, we're looking at the total space industry. We've been happy to see that since we launched the fund each year since the fund launched in 2019, the space industry has grown according to the space report by the Space Foundation.

And so another one of those things that occurred shortly after we launched the fund was NASA came out, Jim Bridenstine at the time, saying that space is open for business. And so we've seen a lot of commercial activity. It's not just government funding it. In the very early days of the space industry, it was almost entirely government funded around the world. Now the government funding has dropped closer to 20%. And we see communications is really the biggest

slice of the pie chart of the overall space industry, but we're seeing many different players come about. The question is, when you say space, what does space mean to you? And to many people, it means many different things. Is every company today a space company? No, but

But almost every single, you know, decent sized company uses space. Like this interview today would not be happening without space. And so, you know, people take for granted what space is, but it's becoming even more intertwined with every single thing that we do and every decision that we make, whether we know it or not.

And so looking at what is space, who's going to be entering, that's why our fund does quarterly rebalances and semiannual constitutions. Sometimes names that are pure play space companies aren't after a period of time.

And they're removed from the index. Or there may be companies that come about that are now generating greater than 50% of their revenues and their market caps are high enough and there's lots of daily volume trade. We're looking at those companies too. So even if it's not in the fund, these are companies across the industry that we're excited about and we're rooting for them all. Mm-hmm.

So for the benefit of our listeners, I want to hit on some of the big themes that you're identifying right now. And maybe we could start with Golden Dome. So this is a defense mechanism. Could you talk a little bit about what Golden Dome is and who benefits stock-wise from this venture?

Yeah. So, you know, you could talk about first order beneficiary, second order beneficiary and so on. This is something that the government has has declared is a major priority. We've had the fortune of looking at the highly successful Iron Dome in Israel and the amount of safety it's been able to provide for citizens there and looking at something that needs to be that safe.

times many, many fold. I mean, we're talking about a huge country with multiple oceans bordering it, with countries on the north and the south, with so much landmass that building this is an extremely coordinated effort. No one company can handle something like this. You need diverse thought and strategy to put something like this together. And you need all those technologies to come together and work.

And so right now what we're being told is this is a tens of billions of dollars project. This would probably cost you billions of dollars if I had to guess just to keep it operational once it's up and running and everything's been built. But you're starting to see consortiums of players looking to align themselves with each other that can go in and try to bid to take down huge chunks of this overall contract that will be awarded. And you're certainly seeing your tried and true

well-known aerospace and defense names in the U.S. that are going to be considered potentially bidding for this. So your Lockheeds and your L3 Harris's and your Raytheons and those names.

We've also seen some tremendous strides from some maybe newer, some public, some private companies. There's talks of consortiums between groups like Andoril, Palantir, SpaceX, and others. So it's going to take a lot of companies. And the ones that win those contracts certainly could benefit from seeing the money from those contracts coming in.

But if you think about it, if these companies are successful, if our government is successful in getting the right companies aligned with the right technologies to build this, I would argue that that could benefit every single American company.

Being able to have companies that can operate in a safe landscape and not have to worry as much about potential threats. Something that happens in New York could impact a Californian company. There's so many butterfly flaps at swings. And to be able to provide a significant safety net for America, for its people, for its allies, if it's successful here, this could be something that these companies could help roll out abroad for.

you know, for our allies. So it might not just stop there. And the companies that are selected are going to be the ones that are spending the money into testing out these technologies. And why couldn't it be rolled out to other countries as well? So it could potentially be, you know, a benefit for them down the road beyond just kind of this initial contract. But it's going to take

a lot of coordination, a lot of companies and a lot of great technologies. And that's why a lot of companies are seeing, you know, an opportunity and are going to be putting their names forward to win some of that contract. And, and, you know, so when, when you talk about a project of this size, again, there's, uh, it's not just one, you know, I mean, of course you think of the aerospace defense, um, you know, folks, but, uh, with that coordination, I mean, um, you know, it,

do you get the consultants in there? What kind of contracts are spread out amongst different industries beyond just your aerospace defense in that case? Yeah, I mean, you know,

We work with a private company that's working on solutions that could be of interest to kind of patching it together with other technologies that these companies aren't currently working on or doing. So there's, you know, you've got big companies that everyone knows about. You've got, you know, medium sized companies that people may or may not. And you've got private companies that may have phenomenal solutions that they're developing that people have never even heard of. And it's going to take all of these in my belief. You know,

All right. So if you're going to have a system that's relying on space, one thing that you're going to need is launch. So you're going to need to launch things into space, whether that's satellites for tracking, detecting, monitoring, helping give the right coordinates, speeds, wind speeds, things like this. You may be using satellites to either gather that information or relay that information to the site that needs to have that information in order to be effective. Mm-hmm.

you know, launch is good, but you need the things that you're going to launch into space. So you have to build, you know, the various types of satellites and make sure that they have the right sensors and lenses and communication abilities. They're going to have to harden those satellites because if someone sees that as something that is critical to this overall force field that we're trying to create, you know, if you could take out the satellite, well then maybe it won't be as effective. So you have to harden that or you have to harden it for, you know, ballistic, you know,

you know, attacks or cyber kinetic types of attacks as well. So it's, it's many different steps. Then, you know, are you using, you know, electromagnetic weapons? Are you using actual missiles? Yeah. We've certainly seen, you know, how expensive just one iron dome missile can cost.

If you're using lasers or you're using other types of technologies that can be reused or you don't need to buy a whole new missile and build it and ship it and whatnot, maybe you could do some of the aspects that the Iron Dome does a lot cheaper. So it's going to take a lot of different types of companies. Certainly aerospace, defense, and technology companies are ones that are interestingly positioned already. Yeah.

And, you know, we'll see what other names that maybe people have never even heard about emerge into the spray as well as they need to start finding ones that can provide, uh, you know, unique solutions to handle this massive rollout. And so with, with your fund, I, you know, there's a certain kind of criteria for it to, uh,

basically qualify as a space company, but, um, you know, do some of these ancillary, uh, companies get in there or are you just kind of, okay, we're aware of the whole, the whole space, if you will. Uh, so you know who the players are and how, uh, different stocks will benefit, uh, you know, that, that are related to your kind of mandate, uh, for, for your space focus. Yeah.

So we are a passive fund. We track the S-Network Space Index, and that's a rules-based, hard-fast rules-based index, which is, as mentioned, it does its quarterly rebalances, semi-annual reconstitutions. And at the reconstitutions times, it's looking for those various kind of fundamental aspects of companies. It's looking at average daily value traded. It's looking at market cap.

But one of the, I think the big differentiators is that they actually do the work to try to determine revenues derived from space. And to me, I think someone that wants to invest in the space industry probably wants to invest in space companies, not just ones where someone can make an argument that, Hey, you know what? That you could say that's a space name. No, they're looking for revenues derived from space related activities, businesses, or services. So at least 80% of the index at revenues,

That reconstitution or rebalance will be in these names that are deriving a majority of their revenues from space. But also realizing that some of these very large diversified aerospace and defense names are not pure play. They do have a major impact and participate in a huge way for this industry. So these more diversified aerospace and defense names either need to have greater than 20% of their revenues, but less than 50%.

from space or over $500 million per year in revenues from space. So it gives us the way of being able to get some of these more diversified names that are major players in, but you know, you might notice, you know, a company like Amazon that's trying to do satellites and project Kuiper, you know, how much revenues are they really generating from space? Not much. You currently don't see it in our fund. Uh,

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Well, and, you know, maybe we shift there and talk a little bit about that. You know, so maybe you could describe what that project Kuiper is, because, as you said, communications is a huge part of space, you know, getting those launches. So what is Kuiper and who benefits from that project?

Well, if it's successful, I would imagine Amazon would probably be one of those possible beneficiaries. It's interesting in that Jeff Bezos, who no longer is running Amazon, has this extreme interest in space to the point that he created Blue Origin.

Um, you know, Amazon is kind of seeing how they're rolling out what they do as a business. And, you know, they've been a huge player as far as, you know, cloud computing and storage and with AWS, um, you know, a satellite constellation could make sense for, for numerous ways for communication, for storage, for logistics. Uh, there's so many things that Amazon does where having space access could be really important. Um,

And, you know, in some cases has nothing to do with this other side project of blue origin. Right. And so right now, project Kuiper's goal is to get 3,200 satellites into space for its constellation. Now what's interesting about that number is when we launched UFO back in April of 2019, we,

there weren't even 3,000 satellites in operation in low-Earth orbit, period, let alone from just one company. And we know that Starlink plans to send potentially tens of thousands of satellites to space for their whole rollout for Starlink. There's other players that have satellite constellations that they would hope to get hundreds of thousands of satellites as well. We are seeing a huge push for low-Earth orbit. What's interesting about Kuiper is...

although they want to have 3,200 satellites in this constellation, their, their approvals to get satellites requires them and other companies that ask for these, you know, vast, you know, large amounts of satellite approvals that you get roughly half of those satellites up within just a couple of years of gaining that approval. And so what that means for blue origin is,

Sorry for Project Kuiper of Amazon is that they need to get roughly 1600 satellites up into space and just a little over a year's time. And that's going to be very interesting to see how they play it out, because the risk is if you don't get those up, it's possible that you may lose the approval for that back half as well. And so that becomes extremely critical if it's if it's important to have 3200 satellites, you can only get half up.

That could be a tough thing for the company. So they are potentially under a time crunch, which interestingly, they didn't only contract with Blue Origin to be their launch provider. And that was strategic because New Glenn isn't necessarily ready to be doing all these launches for them. And so not only did they not just hire Blue Origin, they hired a total of four companies to be their launch provider.

It's possible they may need even more if there's not the bandwidth ready and the spacecraft aren't ready to send those payloads up to space. So that could provide an opportunity, could also provide a real kind of supply crunch for other entities that need to send things into space. If there's only so many companies that could send up so much payload per month and you need to get...

thousand satellites up in just a short amount of time, you know, that could have some, some interesting ramifications for launch companies as well and create some other opportunities. Yeah. I mean, just, just doing the math, you know, a thousand in a year, uh, that's, that's multiple per day, right? You know, I mean, how many, how many satellites can you put in a payload? Uh,

So they're hoping with some of these newer spacecraft that you can have a much larger payload. But when they sent up their batch most recently, two weeks ago, I believe it was a couple dozen satellites. Okay. Yeah. So, yeah, that requires, again, it's a very critical deadline and...

Yeah, I guess. But who knows? They could possibly lax it and say, hey, you know what? That was a really ambitious time window. Maybe we'll give an extra six-month cushion. But it brings up another really interesting thing that I don't think a ton of people are talking about. But like I said, we had roughly a little over 2,000 satellites in operation or spacecraft in operation in low-Earth orbit in 2019. Now we already have more than double that. Mm-hmm.

We're talking about having tens of thousands of satellites and spacecraft in low Earth orbit over the next several years. That brings in risk as well. And so to the extent that we start overcrowding low Earth orbit, companies are still going to have ambitions. Governments, militaries are still going to have important things that they need to do.

Well, they start limiting other companies that come along asking for thousands of satellites for their constellations. It's probably going to have to create a much bigger build out of companies that help with monitor detection, tracking, monitoring.

as well as more solutions for helping to get satellites out of the way. Because one big concern is if you have a lot of traffic in space, you could have collisions. And when you have collisions, it's not just an initial collision and everything's done and stuff falls back to earth. That stuff still is going at your orbital speeds around the earth and could create a massive debris field. So, you know, that could create, you know,

other industries for the space industry to help us deal with those problems, to remove the space debris. Many companies want to do it, but there's not really a positive economic model for doing so at the current moment. But as we send things into space, it's,

the more things we send, are we going to start cutting back how easy it is to get approvals? So will the companies that are first have an interesting benefit over companies that try to come about later and do similar things? So there's a really interesting time period right now. And a lot of this, again, is going to shine the light on launch providers and how much can they launch and are they going to help other companies try to beat their deadlines? Yeah. You know, you say this and I'm just imagining, you know,

My son loves Spaceballs. It's one of the few 80s movies that my wife allows him to watch because so many 80s movies are just not appropriate. But, you know, that Mega Maid at the end, you know, just, you know, cleaning up all the debris, you know, maybe that's what we need. And, you know, traffic lights and everything like that.

But I want to throw this question out to you as well, since we're talking about, you mentioned Blue Origin. You know, Paul from YouTube was asking, you know, what about the kind of the commercialization of spaceflight? I mean, we just saw Katy Perry, Gayle King, you know, and, you know, we've seen William Shatner, you know, go up in space. Is this something, these zero gravity trips that is still kind of on the horizon and,

who's leading in that charge. Yeah, I've still never seen anyone put forward what that kind of total addressable market looks like for that. It's very expensive. We don't know the cost that everyone's providing. We have seen Virgin Galactic. We have seen Blue Origin. We have seen SpaceX offer some of these trips. As far as getting...

I don't know if it's as much bang for your buck because I don't know the price necessarily per passenger. But as far as you're getting the biggest experience so far, SpaceX seems to be that opportunity. Some of these trips can last you a couple of days. You're traveling around the Earth several times. You're not just going up and then coming back down.

But it's going to cost a lot more to do that. But as we get launch costs down, could these prices be a little bit more accessible for the masses? Absolutely possible. How many people want to risk their life doing it? That's going to be part of that total addressable market calculation.

But right now, you need to have a lot of money to be able to do it. And the experience is interesting. And it's a different type of space tourism. It's a different type of tourism. And one that you can spend years telling all your friends about something that you did that no one else has really done. But you're also talking about a lot of money for a very short trip. So I think...

We're probably going to need to see some more technological advances to drive the price down where we can start seeing it become a more regular occurrence. Right now, a lot of it's been for publicity, it seems. Not as much science or the tourism itself. But as they get those costs down, maybe these experiences could be longer and you can add more bang for your buck as a potential future space tourist.

And then, you know, they're also talking about orbiting hotels. So if you get, you know, a space station up into space and, hey, you could spend a couple of days on it and, you know, watch the Earth and do some fun experiments and just things like that. I mean, that to me, that seems like that could have, you know, potentially a much greater appeal. Yeah.

But again, it would probably be a lot more expensive. Right, yeah. The Royal Caribbean of space, I guess. And so I just threw up a chart here of Virgin Galactic. Of course, this is something that was a special purpose acquisition company, came out to much fanfare, went all the way up to $1,000 and is trading below $3 now. So again, does it mean it won't ever work? It just means that right now, stock-wise, that situation...

space tourism seems to be a little out of favor, you know, due to the unknowns, I suppose. And it also seems to be something, you know, you look at Blue Origin and you look at SpaceX and their goal isn't, you know, hey, let's create a fun vacation for people by sending them up into space for a couple of minutes to a couple of days. They have broader goals. They want to see commercial space really, really grow and they want to play that role in it.

And if they happen to also be able to offer these opportunities because they've got the technology and there's some interest and it's some good publicity, sure, we could do that too. But for them, their main focus isn't, hey, let's see how many people we could quickly launch to space and bring them back down. They're looking at some much loftier long-term goals that are going to require a lot of attention.

This just kind of seems to be something where they're able to get a little bit of positivity and get their names talked about and provide a phenomenal experience for a couple of people on each of these trips, but not necessarily what they're banking on to really be what's going to support the company. Yeah. So another company that kind of really had a nice

launch, if you will, more recently was, again, on this whole communication side. There's, of course, Starlink and how many people are benefiting from that access to the internet, to high-speed internet in rural areas. My boss, he lives in an area that doesn't have the best internet, and he uses Starlink and

Absolutely loves it. You know, it's worked out great for him. But there's this company, AST Space Mobile, that had a really strong move last year. It's kind of tapered off. How is this company in that communications space?

So this is a name that I'm certainly familiar with. It's been a name that's been in UFO for a while now. I wasn't as familiar with it until, like you said, about a year ago in May, things started really perking up for that. And that kind of was something that we saw across the space industry. But this seemed like this was like

this one name that really started getting people excited and started kind of turning the downwards tide that we started seeing prior to then over the last couple of years for a lot of these other space names, some of the SPAC, D-SPAC names and some of the other kind of smaller pure play space companies.

You know, back in May last year, they announced, you know, a telecom partnership where they were going to be providing some satellites. And then about two weeks later, another announcement with another company. And, you know, you look at the chart and you can see exactly kind of when I'm when I'm talking about, you know, going from from actually looks like some of that maze cut off because. Yeah, I can do a best fit here because, yeah, as you mentioned, it's off the chart. It's came up so strong.

And you know what? This was a name that most people did not know. And still now, I don't think most people know it. But for the trading community that's looking for names and moving averages and whatnot, this has become a darling for a lot of them.

And so, yes, they're a competitor of Starlink, but it's a really big market that these companies are going after, and it doesn't need to be a winner-takes-all market. They announced deals with some cellular companies, and other companies announced other deals.

Well, prior to that announcement back in May for AST Space Mobile, you had Global Star and Apple announcing at an Apple Day how they were going to be using Global Star to help provide SOS emergency connectivity across the U.S. and hopefully roll out to North America and possibly beyond.

So there's all different ways that companies are potentially using satellite connectivity to expand their current offerings and provide more services, reliability, and features for their existing base. So it seems like Apple is kind of testing it for their hardware.

Now more companies are trying to embed it as well to provide that connectivity. And right now, it had a really large run. For several months, it was the largest weighting in UFOs.

And it's pulled back a little bit, but that's one name. You know, when you're looking through X or other, you know, Reddit or whatnot for information, I've seen the wildest ranges and expectations as far as, you know, what future expected market caps can be and whatnot. And a lot of it relies on, you know,

you know, being extremely successful in everything that they do and kind of pricing things to perfection. But I'm glad to see that this is a pure play space name that is starting to slowly become more of a household name. And there haven't been many names in this pure play space world that have been. So I think, you know, it's really encouraging for the broader industry. And it's also showing how, you know, companies around the world that are, you know,

getting involved in communications are starting to look more towards space to help them. And AST has kind of been this poster child for it. Yeah. Now, one of the things that, you know, again, some of these are very speculative. They're very new. You can see that the sales, you know, the revenues have been, you know, very, very small, right? They're just starting to get sales. Now the estimates going forward are, you know,

you know, ramping up pretty quickly. But those are estimates. So how much when you're kind of looking at these companies, how much are you willing to kind of go on that speculative side of, okay, they might not have the revenues now, but wow, if they can make this happen, the future is looking bright for them. How do you kind of balance that?

Yeah. So, you know, again, it's, it's a rules-based methodology that the index follows. So, you know, it looks at, you know, percentage of revenues from space, you know, actual revenues from space and those names that are pure play. So the, the ones making over 50% of the revenues from space,

Say it's 100% from space and it has a large market cap, there's a good chance that that could be one of the top holdings in the fund. Like you said, the revenues have not been that high and now there's projections. We're not looking into the future. We're looking at what are your reported space revenues so that we can determine whether right now you're a space company or not.

And to the extent that every other company in the space industry stays the same, but their revenues start going up and therefore their market cap starts going up, it could potentially be a larger weighting if those things play out. So again, it's not anything that we're doing to say, hey, you know what? This is happening right now, but we think so we're going to overweight. It's really sticking to the rules and us tracking the index. Mm-hmm.

Um, let's turn our attention a little bit, uh, kind of over to Europe. I mean, we, we started with defense and maybe we'll end a little bit with defense because, you know, one of the things, uh, that president Trump in his first administration was talking about, um, was again, like Europe needing to step up in their defense budgets, uh,

with NATO and so on. And it seems like, you know, this time around, whether it's trust issues or what have you, a lot of European nations are saying, yeah, we really want to do this. You know, we really want to have our own defense and not rely on the U.S. as much. What is that doing to the marketplace and specifically space?

That's kind of a careful what you wish for type of scenario. So, you know, Europe is saying, okay, you know, we might need to start supporting ourselves a little bit more and be less reliant. But hey, that doesn't need to necessarily mean that we're going to spend more and buy American goods. And so, you know, they're starting to look internally and say, hey, what can we produce? What can we source? What can we build here? And so, you know, some names in Europe, you

A lot of them had been, especially in the space industry, have been beat up pretty hard a year back and more. And as things have started to progress, some of those names had been removed from the index because they no longer qualified, whether it was market cap or liquidity, things like that. Some of these names are starting to perk back up. And so a name like Avio is

which trades out of Italy in Milan was the name that, you know, had gotten beat up pretty bad. And now, Hey, they might be a company that they might look to for launch services. You know, you've got SES, you've got util set. You know,

You know, there's a decent amount of dollars. The the defense contractor. We also have Airbus in the fund. You know, a lot of these names are being tapped to see, hey, can you provide these solutions or could you work with others to to be able to help us here? And one of those areas is communications. So some governments are saying we don't want to work with Starlink.

You know, not that it's not been reliable for Ukraine, but they have their own reasons, whether real or not, that they have their reasons. And they're saying, hey, who in Europe can step up and be a better Internet or communications provider for us? And again, they're looking within Ukraine.

you've got a company like Rocket Lab. Yes, you know, they've got a huge presence here, but they also have presence in other countries and, you know, with the Five Eyes nations and whatnot. So, you know, would a European company look at a U.S. company that has operations in Europe and say, OK, that's, you know, better than, you know, a company that doesn't and want to, you know,

Throw them some contracts. We'll see. But Europe is starting to look a little bit more inward for solutions. They're starting to...

raid the coffers a little bit more and put some more money behind it. And we'll see how serious they are long-term and how the technologies pan out. Ultimately, they could put a trillion dollars behind these things. And if they don't pan out, you might still have to look for other solutions. So right now they've been saying, let's look inwards and we'll see what comes of it. But for us, we're happy to see ingenuity in the space industry, whether domestically or abroad, being that we're a global fund. Right.

Maybe you could talk a little bit more about Rocket Lab. This was one that I actually owned in the fall, and then I kind of sold it as it really ramped up. I was almost, you know, this was too much of a good thing. It was going up too far too fast. I wasn't ready for that rocket ride, but it was one of my best winners last year.

And certainly this is one that has some solid revenues. I mean, you can see that this is ramped up from, you know, 54.9 million in sales back in March 23. A year later, you know, up 69% to 92.8. And now they're expected for the March quarter this year, the estimate is for 121 million. So it's gone from, you know,

some decent numbers to, you know, really some solid hundred million plus quarters of revenue. And so, you know, where is it on kind of its trajectory, I guess? Is this something that's potentially just launching or is this something that's kind of already hit lower Earth orbit?

So I can't, I'm not allowed to give projections or predictions or things like that, but as far as, you know, what, what the company's doing and what it has done and some of the things that they've discussed, you know, the, the biggest thing in front of them right now is getting their next generation rocket ready to go. It'll have bigger payloads, allow them to, to get, you know, potentially bigger contracts, um,

ride sharing, where they can get multiple companies to provide things for the payload. And they're really banking a lot of the company's future on rolling out their next gen rocket. Interestingly, though, they saw some need and demand for different types of satellite technologies. And they said, OK, you know what? How about we start being a provider for these solutions?

And so they've diversified beyond just being a pure play launch company. And I've started to find some other areas where they could expand their expertise into and generate some revenues. And, you know, I think that's definitely interesting. It's you live in a tough world when your only client is the government and you're dealing with budget cuts or changes or security lap, you know, whatever it is.

You know, it's difficult when you can provide for the government and for other clients. That becomes more interesting and it gives you a little bit more safety that you're not just relying upon one one purse being able to fund everything. And that's kind of how they position themselves. So, yeah, every now and then you'll get a rumor that, you know, they're not on schedule with their next gen rockets or this or that. And you see some volatility or, you know,

the whole market trades, you know, together and, you know, because the S and P 500 is down today, you know, we got to knock, you know, some of these tech names down a little bit more than S and P just cause that's what we do. You know, you know, they're, they're really building, um, you know, a solid footing. No. Will there be the demand for the launch? You know, if, if,

If we have this huge crunch to get things up into space and there's a hurry and they've got a big old payload racket that can help send that up and ease that burden, they might be able to get a lot of money for doing that, especially when the risk is not having your constellation built.

So their timing is very interesting. Whether they'll be able to hit their deadlines or not is anyone's guess. But I think people have looked at them as a really reliable launch provider. And you've got SpaceX and then you've got everyone else combined in second place, maybe. But Rocket Lab for a company that was, you know,

a fairly small company a couple of years ago, uh, is, is doing a pretty impressive job at, at growing out their, their base, um, their product offerings and their capabilities. So I, I think it's, uh, it's definitely been, uh, an exciting name to kind of have tied into this industry. Mm-hmm.

So to kind of just wrap up, you know, you mentioned a number of times how it's a rule-based strategy. You're going off of an index. So is there anything about like tariffs and, again, some of this, you know, globalization uncertainty that plays into it? Or is it just kind of like, you know what, we're going to do what we do. And all of that, you know, all of that stuff is really not playing into it, the global economic uncertainty.

Outlook or any of those items. Yeah, those forces may have an influence on broader markets, individual companies. For all you know, a name, a big publicly traded name overseas could get sanctioned by the U.S. for any number of reasons. And we might not be able to transact with them. I mean, there are all different types of

you know, things that could occur. Space industry has a lot of things because, you know, as everyone says, space is hard. And so you have your own unique, you know, problem set of things that you need to get past. So it's something that's, you know, not immune from risks and geopolitical risk can absolutely affect that. But at the same time, you know, geopolitical head-butting,

sometimes that spurs innovation and you have governments that say, Hey, we need to spend more on space defense. Well, guess what? How do you do that? You spend money and, you know, companies win contracts and they can benefit from, from that. So if China says that they want to send someone to the moon and build a military base there, okay. It goes against a couple of treaties, not that they've signed them, but,

The U.S. isn't going to just say, okay, you're doing that. Congratulations, you beat us. No, typically we say, hey, we need to spend a lot more money. We need to move faster than we're already doing because we can't get left behind. And so that kind of rivalry, when you're talking about an industry that has so much reliance, that's so intertwined with the military and national security and defense, it's something that you can't really just have as an afterthought.

And so that's why we're seeing some of these bold things coming forward from the government about Golden Dome and some other initiatives. And potentially with Jared Isaacman, who knows, maybe Mars starts getting a little bit more prioritized as opposed to the moon, which has really been a focus of the U.S. government for decades. And what kind of opportunities could that create? What kind of rival? What kind of...

you know counter rivalry measures will that you know trigger other countries to do and really kind of spur this next space race yeah well andrew uh thank you so much for kind of laying that out a lot of interesting things again the innovations um i i don't know i always get a little um a little excited with all of these different things that are possible um i mean i loved uh you

I mean, heck, I just watched Apollo 13 for, I don't know how many times I, it was my son's first time, but, uh, you know, I love watching that stuff. So it's going to be really interesting to see how this plays out. Thank you so much for giving us some, some companies to think about, uh, in, in this newest space race and how different it is this time because of communications and all of the things that, uh,

that go along with it and, and even the traffic, you know, so very interesting stuff. And, um, people can follow you on X, uh, at ETF Wunderkin, um, and, and anywhere else that they should, uh, kind of get, get your insights.

Well, hopefully on this podcast again, but that's where we put most of our stuff. If people come to our website and sign up, we do provide monthly newsletters and some other interesting thought pieces as well, typically focused around the space industry. So always happy to communicate with people on any of those forums. Awesome. Thank you so much for coming, Andrew. Really appreciate it.

Absolutely. Well, that's going to wrap up our show. Thank you so much for watching and you're going to want to join us next week. We've got Mark Minervini coming back on the show. He is, of course, one of the podcast favorites. We're going to get some insights into how he's been playing this very topsy-turvy market and what things he's looking for to ramp up his exposure. So hope you join us for that and we will see you next time. Take care.