By ProcureAM Research
The world is changing under the current Trump administration. These actions are impacting the global space industry. The following three areas should be monitored for their effects on space stocks.
Countries are concerned about the new and changing tariffs and the role that Elon Musk has taken in the Trump administration. Some countries are targeting SpaceX* and Starlink as scapegoats and are looking at alternatives for communications networks. Countries are citing the need to have control over their communications networks and not be dependent on America and Musk’s Starlink.
Canada was one of the first countries to cancel SpaceX contracts when Trump announced tariffs. Canada is reviewing new options including Telesat*, Eutelsat OneWeb*, MDA Space* and Viasat*. European countries are evaluating additional alternatives such as SES* (a Luxembourg-based satellite operator), the Infrastructure for Resilience, Interconnectivity and Security by Satellite (IRIS) program (an EU-backed broadband constellation) and Project Bromo (a new partnership between Airbus*, Thales*, and Leonardo*).
Foreign SpaceX customers are feeling the impact of tariffs when launching from the U.S. Shipping spacecraft and satellites to the U.S. from abroad can result in unexpected tariff costs. One workaround has created an opportunity for Rocket Lab*. Although it is a U.S-based company, launches from their New Zealand site may be exempt from tariffs if the satellites do not travel through the U.S.1
The growing interest by longtime American allies to be self-sufficient and minimize tariff expenses should create growth in international space-related communications corporations.
Concerns about a new world order and changing alliances are motivating countries to up their defense spending. Space related sensors, observation networks, and attack systems are now becoming essential components of a complete defense program.
Europe is planning on increasing its defense spending and budgets due to the uncertainty of future support from the United States. Global military expenditure is seeing the sharpest rise since the end of the Cold War.2 Germany has asked the European Union to activate an emergency clause that would enable the nation to increase investments without violating the bloc’s spending rules.3
Companies benefiting from this increase in spending from European nations include Leonardo*, BAE Systems*, Thales*, and Rheinmetall*, Lockheed Martin* is also benefitting from this defense spending push. 4
Meanwhile, the United States is also looking to increase defense spending. During President Trump’s remarks to Congress earlier this year he described a state-of-the-art “Golden Dome” missile defense system. The system would require space-based sensors and missile interceptors for detection and interception. Competition and spending estimates are increasing for this project. Possible winners include L3Harris*, Northrop Grumman*, Boeing*, SpaceX, Palantir*, and Anduril*. The House and Senate Armed Services Committees’ recent funding proposal allocated an initial $25 billion for the Golden Dome initiative.
The United States is not the only company exploring the universe and seeking footholds in space. China has been busy sending up rockets and looking to establish settlements on the moon.
In the United States, Jared Isaacman was nominated as the next head of NASA. During his confirmation hearing, Isaacman championed the goal of prioritizing moon projects, as well as Trump’s vision of reaching Mars. Isaacman’s efforts to have both targets in play should continue to keep numerous companies busy planning launches, landings, and research. Companies like Rocket Lab, Intuitive Machines*, Northrop Grumman, and Boeing, as well as smaller firms, will likely benefit from this initiative.
The Procure Space ETF® (NASDAQ: UFO) is a space-focused exchange-traded fund with constituents from around the world. Many of the companies which may benefit from the above catalysts can be found within UFO. As space continues to be a growing component of communications and defense systems, space-related products and services will grow in demand.
To learn more about the space companies found within the Procure Space ETF® (NASDAQ: UFO), please visit www.ProcureETFs.com.
1“Foreign SpaceX launch customers seek relief from US tariffs,” by Jason Rainbow, spacenews.com, May 12, 2025.
2“Unprecedented rise in global military expenditure as European and Middle East spending surges”, sipri.org, April 28, 2025.
3“Germany triggers EU’s emergency clause for defense spending,” by Giovanna Faggionato and Chris Lunday, politico.eu, April 28,2025.
4“European defense stocks soar amid re-armament talk”, by Elisabeth Gosselin-Malo, defensenews.com, March 5,2025.
Important Information:
*As of May 13th, 2025, Airbus (AIR FP) was a 2.25% holding, Boeing (BA) was a 2.82% holding, Intuitive Machines (LUNR) was a 5.52% holding, L3Harris (LHX) was a 2.34% holding, Leonardo (LDO IM) was a 0.28% holding, Lockheed Martin (LMT) was a 2.29% holding, MDA Space (MDA CN) was a 4.26% holding, Northrop Grumman (NOC) was a 2.22% holding, Rocket Lab (RKLB) was a 5.47% holding, SES (SESG FP) was a 3.83% holding, Thales (HO FP) was a 0.52% holding, Viasat (VSAT) was a 4.95% holding in the Procure Space ETF® (NASDAQ: UFO). Anduril, Eutelsat OneWeb, Palantir, Rheinmetall, SpaceX, Telesat were 0.00% holdings in the Procure Space ETF®.
For a complete list of holdings in UFO, visit: https://procureetfs.com/ufo/. Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security.
Please consider the Fund’s investment objectives, risks, and charges and expenses carefully before you invest. This and other important information is contained in the Fund’s summary prospectus and prospectus, which can be obtained by visiting procureetfs.com. Read carefully before you invest.
Investing involves risk. Principal loss is possible. The Fund is also subject to the following risks: Shares of any ETF are bought and sold at market price (not NAV), may trade at a discount or premium to NAV and are not individually redeemed from the funds. Brokerage commissions will reduce returns.
Aerospace and defense companies can be significantly affected by government aerospace and defense regulation and spending policies. The exploration of space by private industry and the harvesting of space assets is a business based in future and is witnessing new entrants into the market. Investments in the Fund will be riskier than traditional investments in established industry sectors. The Fund is considered to be concentrated in securities of companies that operate or utilize satellites which are subject to manufacturing delays, launch delays or failures, and operational and environmental risks that could limit their ability to utilize the satellites needed to deliver services to customers. Investing in foreign securities are volatile, harder to price, and less liquid than U.S. securities. Securities of small- and mid-capitalization companies may experience much more price volatility, greater spreads between their bid and ask prices and significantly lower trading volumes than securities issued by large, more established companies. The Fund is not actively managed so it would not take defensive positions in declining markets unless such positions are reflected in the underlying index. Please refer to the summary prospectus for a more detailed explanation of the Funds’ principal risks. It is not possible to invest in an index.
UFO is distributed by Quasar Distributors LLC.