Within the last decade, AI has revolutionized industries such as healthcare (image analysis and disease diagnosis), customer service (24/7 support), and retail (demand forecasting and inventory management). Now it’s venturing further into space, and investors may be considering which space stocks to take a closer look at.
After its successful application on Earth, scientists and engineers are incorporating AI in the exploration and analysis of outer space. Autonomous operations, efficient communication between astronauts, and detection of environmental issues are ways in which AI brings efficiency to space systems. For example, CIMON (Crew Interactive MObile CompanioN), developed by Airbus and IBM, is an 11-pound robot equipped with facial recognition technology that can converse with the astronauts and recognize who it’s talking to.
NASA, the European Space Agency (ESA), and SpaceX are already using AI to improve knowledge of outer space.
These hefty investments may bring promising prospects for investors who are space enthusiasts. Making large strides in using AI in space is SpaceX, Rocket Lab, and Relativity Space. While investing in these private companies may be restricted to institutional investors and private equity firms, there are a handful of publicly traded companies to invest in. Two public companies – Hewlett Packard Enterprise and Cisco Systems – are leveraging AI to create successful imprints in outer space. Let’s take a closer look at both:
Hewlett Packard Enterprise (HPE)
In August 2017, after a year-long experiment with NASA, HPE launched its Spaceborne Computer. The goal was to estimate how well the system could operate in space’s harsh conditions.
Only a few years later, on February 11, 2021, HPE sent AI into the cosmos. The company’s Spaceborne Computer-2 system was launched into space and reached the International Space Station (ISS) on May 7, 2021. The Spaceborne Computer-2 system marks the first commercial edge computing and AI-powered system to be powered up in space.
HPE’s system can process in-space data within minutes and is utilizing AI to perform quick experiments for medical imaging and DNA sequencing. The computer system can also read and collect image-intensive data from remote satellites and relay it to Earth for processing.
Analysts are predicting an 8.16% upside in the stock’s price with a one-year average price target of $17.82 (as of February 9, 2023). The company’s projected annual revenue is $29,409MM.
Cisco Systems (CSCO)
CSCO is actively contributing towards space exploration alongside NASA to digitally transform its future. Among NASA’s six core thrusts are AI and machine learning. Cisco believes its in-built data and AI stacks are directly aligned with NASA’s mission, and through this partnership, Cisco hopes to build comprehensive digital infrastructures that can drive the next generation of product innovation cycles.
As a leading provider of audio and video communication platforms, Cisco WebEx is also going to space as part of NASA’s Artemis I mission. Cisco Webex hopes to utilize video collaboration tools in deep space with the goal to bridge the communication gap between future astronauts, their co-workers, and their loved ones on Earth.
Analysts rank Cisco at #19 among the 30 stocks making up the Dow Jones Industrial Average. The company’s average one year price target stands at $54.45 with a high estimate of $67 and a low estimate of $44.
SpaceX, Rocket Lab, Relativity Space
Navigating a rocket correctly into space is a critical part of a rocket’s journey. SpaceX uses an AI-powered autopilot program that assists rockets’ navigation from the launch pad to the ISS-docking station. In an event of a malfunction, emergency abort systems in rockets can bring astronauts safely back to earth. SpaceX rockets have an in-built AI-driven emergency abort system — tested successfully prior to Falcon 9’s launch. While SpaceX’s IPO prospects may be slim right now, any momentum it generates can have a ripple effect on public space stocks.
Another active player sending rockets into space is Rocket Lab — a private manufacturer of small and medium-class rockets and spacecraft components. On January 24th, 2023, the company launched its first Electron rocket mission from Virginia Space’s Mid-Atlantic Regional Spaceport within NASA’s Wallops Flight Facility. The partnership between Virginia Space and Rocket Lab is expected to bring long-term economic development opportunities, such as jobs, rocket launch tourism, and construction of new facilities.
As a leading platform in software-defined manufacturing, Relativity Space is not behind in exploring the cosmos. The company is transforming rockets by combining data-driven 3D printing, artificial intelligence, and autonomous robotics. Relativity Space’s Terran 1 is the world’s largest 3D printed object being sent on an orbital flight. It is expected to carry out its debut mission in February 2023.
Future prospects: Taking off or nosediving?
The demand for space exploration is also growing exponentially. Various entities including the government, intergovernmental organizations, and entrepreneurs are fully backing space-related missions and products. The United Nations Office for Outer Space Affairs (UNOOSA) believes the space economy contributes both directly and indirectly to socio-economic development and is the driving force behind achieving sustainable development goals.
Over the last few decades, billionaire entrepreneurs have heavily invested in the space industry. Richard Branson Virgin’s Galactic is expecting to send a fully commercial flight to space in 2023, and Elon Musk’s SpaceX is expecting to increase launches this year. Jeff Bezos’s Blue Origin is sending out another rocket in 2023.
If outer space missions continue to show success in the future and investors see lucrative gains in space stocks, the prospects could be favorable. That said, the space industry still stands at the germination stage, and the journey is quite long. Investors should be aware of any risks associated with participating in a nascent industry.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
