Beyond SpaceX

04 June 2026

• SpaceX excitement has re-rated global space stocks, but most European space assets still trade at discounts to US peers.
• Europe is investing heavily in “space sovereignty” through launch, satellite and communications programmes such as IRIS², the EU’s satellite constellation¹.
• Companies including Avio, Airbus, STMicroelectronics, Leonardo and Kongsberg, among others, offer exposure to Europe’s growing space ecosystem.

The excitement surrounding a potential SpaceX IPO has triggered a rush into anything linked to the space economy. The VanEck Space Innovators ETF has risen by 97.3% year-to-date², while many loss-making US space companies trade on significantly higher valuations. And US-listed companies dominate the ETF’s constituents, with just four (cash-generative) European companies – SES, Melrose, Eutelsat and Avio - accounting for a combined 11.5% of assets³.

On the launch pad?

STMicro apart, European space-related stocks have yet to match the global space sector’s YTD returns.

Stock performance, indexed to 100 at the start of 2026

European equities have also started to move recently. Shares in Avio, OHB, SES, Eutelsat and STMicroelectronics have all outperformed broader European markets year-to-date as investors begin to recognise the strategic value of space assets.

We do not expect Europe to produce the next SpaceX anytime soon. However, for us, the excitement around the SpaceX IPO highlights the val ue we see in many companies that are exposed to the same theme, businesses that are already profitable yet offer exciting growth prospects. Europe has quietly built a strategic space ecosystem spanning launchers, satellites, semiconductors and communications infrastructure, yet we believe that many of these businesses remain undervalued within broader industrial and defence groups.

Sovereign Launch Capability

Avio is one of the clearest examples of Europe’s push for “space sovereignty”. The Italian group is the prime contractor for the Vega launcher and a key supplier within the Ariane programme through Arianespace, making it strategically important to Europe’s independent access to space. Management is targeting a minimum cadence of three Vega C launches and four Ariane 6 launches per year.

The business is already heavily exposed to Europe’s launch ecosystem. In FY2025, Avio generated EUR 358.9 million from Launch systems and a further EUR 81.7 million from Space propulsion, much of it tied to Ariane 6 motor production. Combined, launch-related activities accounted for more than 80%⁴ of group revenue.

Despite this strategic positioning, Avio trades on roughly 2.6x EV/sales* for 2027, well below many US-listed space peers, such as Rocket Lab, which trades at a stratospheric 70.4x* multiple and is the top constituent of the Van Eck ETF. Avio is also benefiting from rising defence demand through its solid-rocket motor business, supplying MBDA as European governments rebuild missile inventories, while agreements with Raytheon and Lockheed Martin provide additional exposure to growing US defence spending.

Airbus, Leonardo and Thales: Building a European Space Champion

Several European aerospace and defence groups also possess substantial, but, in our view underappreciated, space businesses. Airbus Defence & Space builds military satellites, payloads⁵ and sovereign communications systems, while Leonardo and Thales provide capabilities across satellite manufacturing, Earth observation, navigation and secure communications through Thales Alenia Space and Telespazio.

Kongsberg, the Norwegian defence company, has meaningful exposure through satellite manufacturing, ground-station infrastructure and surveillance systems.

Importantly, Airbus, Leonardo and Thales have agreed to merge their space operations to create a European space champion with around EUR 6.5 billion⁶ of annual revenue, as we discussed in our Forming a Pan-European Space Champion blog last October. The proposal highlights Europe’s growing focus on strategic autonomy in space.

Analogue Semiconductors and LEO Satellites

One of the less obvious beneficiaries of the growth in low-earth-orbit (LEO) satellite constellations is STMicroelectronics. Modern LEO networks, such as SpaceX’s Starlink, require highly specialised analogue, radio-frequency and power-management chips capable of handling signal transmission, beam steering, connectivity and energy efficiency across both satellites and user terminals. STMicroelectronics has become a key supplier to Starlink, providing custom semiconductor solutions used in satellites, gateways and user terminals. Management recently disclosed that revenue from LEO programmes has grown from approximately USD 175 million in 2021 to around USD 600 million in 2025, and is expected to approach USD 1 billion in 2026.⁷

Europe’s Satellite Capability

SES and Eutelsat are often viewed as legacy operators threatened by Starlink. While we agree that these operators are structurally disadvantaged versus Starlink, in our view, Europe’s satellite operators are becoming increasingly important to Europe’s sovereign communications ambitions, particularly in the Government and Defence realms through their Medium Earth Orbit (MEO) and Geostationary Earth Orbit (GEO) satellites (an area that SpaceX has not yet targeted).

In LEO, Eutelsat’s ownership of OneWeb gives Europe an existing LEO capability, while both companies are expected to play important roles in the IRIS² programme.

Germany’s OHB also offers direct exposure to European space spending through satellite manufacturing and institutional space programmes.

Neither SES nor Eutelsat is likely to challenge SpaceX commercially, but as governments place greater emphasis on communications resilience and technological autonomy, we believe that these businesses may increasingly be viewed as strategic infrastructure assets rather than traditional telecom companies.

Tom O’Hara, David Barker and Jamie Ross manage European Equities strategies at GAM Investments. You can find out more information on the team here.