MW These six fast-growing stocks sit at the cutting edge of space and military technology
By Philip van Doorn
Drew Cupps of Polen Capital envisions 'two distinct camps' of companies providing global satellite communications in the years ahead
Investors can expect global communications and AI data processing - both via satellites - to be important themes for many years in the wake of the SpaceX IPO.
Coverage of technology stocks in the financial media has centered on SpaceX and its artificial-intelligence ambitions - underscored by its $60 billion deal to acquire Cursor, which followed its $85 billion initial public offering on June 12. But Drew Cupps, a portfolio manager at Polen Capital in Chicago, is focused on SpaceX's Starlink satellite communications network while suggesting investors also become familiar with six smaller companies.
Cupps and his team of analysts joined Polen Capital on June 30, 2025, and he took over as manager of the Polen 5Perspectives Small Growth Fund PBSIX. He told MarketWatch that he made a complete and immediate set of changes to the fund's portfolio, in keeping with a small-cap strategy he has now run across several firms for 26 years, and noted that his current team of analysts has been in place for 18 years. From June 30, 2025, through Thursday, the fund's institutional shares had returned 59.7%, compared with a return of 37.1% for its performance benchmark, the Russell 2000 Growth Index XX:RUO, according to FactSet. That isn't a long performance record, but that period of less than a year represents quite a turnaround, as the fund's record for five years through the date when Cupps took over was a return of 6.8%, while the Russell 200 Growth Index returned 43%.
Cupps also runs two exchange-traded funds that were launched in May. These are the Polen 5Perspectives Large Growth ETF PCLC, which holds shares of SpaceX $(SPCX)$, and the Polen 5Perspectives Small-Mid Growth ETF PCSG.
For SpaceX as a whole, "the concept, the sizzle, is that they would combine all kinds of engineering capability" to build and combine AI data-processing satellites "with their launch capability, which is second to none," he said.
Now let's get back to Starlink. In its S-1 IPO filing, SpaceX said its Connectivity segment generated $3.26 billion in revenue during the first quarter, which was 70% of SpaceX's consolidated revenue of $4.69 billion. The Connectivity segment's first-quarter operating income was $1.19 billion, while SpaceX's consolidated first-quarter operating loss was $662 million.
SpaceX said it had about 10.4 million Starlink subscribers as of March 31.
While SpaceX hasn't yet turned a consolidated profit, Cupps believes that its Space and Connectivity segments "have every reason to be profitable" going forward, as the company works toward eventual profitability for its AI sector.
Right now, if you want to use Starlink for a voice call, you need to use Wi-Fi calling or VoIP. "But SpaceX will offer full-fledged voice from your phone and mine to the satellite. They intend to fully compete with land-based networks," Cupps said.
He also said that within large buildings, the full Starlink service would need to be "complemented with a land-based network." He expects T-Mobile US $(TMUS)$ to provide this service to SpaceX, since the companies already have a partnership agreement.
And this brings us to AST SpaceMobile (ASTS), which has now launched 10 satellites for its network to provide communications services directly to smartphones. AST has partnership agreements with AT&T $(T)$ and Verizon $(VZ)$.
"So you can see two distinct camps" for satellite communications networks, Cupps said.
Recent coverage: AST SpaceMobile's stock experiences rocky trading as SpaceX plans to launch its satellites into orbit
He said that the most obvious alternative to SpaceX in the launch industry is Rocket Lab (RKLB), "which is also the most similar in that it has a mature, proven launch capability." He added that Rocket Lab launches much smaller payloads than SpaceX does.
Cupps pointed to Planet Labs $(PL)$ as "another pure space-oriented company" that makes imaging satellites. "They have the largest imaging constellation up today," he said. The company has contracts with the Defense Department and with foreign governments. In addition to tracking ships, armored vehicles and satellite launchers, the imaging network provides weather and other imaging services used by agricultural producers.
Defense-oriented companies
Cupps named three other companies that "really live in both thematic groups - military and space."
The first of these is Kratos Defense & Security Solutions $(KTOS)$, which makes drones and provides various command and control systems to government clients. The company has also joined with GE Aerospace $(GE)$ to develop engines for use in small unmanned aerial vehicles.
The next two companies are both manufacturers of directed-energy weapons designed to shoot down drones or missiles. One of the largest costs for the U.S. during its conflict with Iran has been the missiles used to shoot down inexpensive drones.
These companies are nLight $(LASR)$ and AeroVironment $(AVAV)$.
"NLight is closest to being exclusively military," Cupps said, "because its primary product is directed energy, a high-powered laser, but they can also apply the laser to space-based communication." While nLight's lasers haven't yet been used under combat conditions, the company has mounted its Hades 70kW units on U.S. Stryker combat vehicles and tested the units' ability to shoot down drones.
Along with directed-energy weapons, AeroVironment makes drones known as "loitering munitions" designed to destroy enemy armored vehicles, as well as various systems for use against drones.
Revenue growth projections
The six companies that Cupps mentioned vary in size, so the following table includes market capitalization as of the close on June 18 in the right-most column. LSEG provides consensus revenue estimates adjusted for calendar years for companies (such as Planet Labs and AeroVironment) whose fiscal reporting periods don't match the calendar.
Here are the six companies Cupps mentioned, in the order given above and with SpaceX at the bottom, showing projected compound annual growth rates for revenue from calendar 2026 through 2028, based on consensus estimates among analysts polled by LSEG. The revenue and market-cap figures are in millions.
Company Two-year estimated sales CAGR through 2028 Est. 2026 revenue Est. 2027 revenue Est. 2028 revenue Market cap
AST SpaceMobile 245.9% $166 $842 $1,989 $31,306
Rocket Lab 34.1% $918 $1,269 $1,651 $62,078
Planet Labs 28.1% $424 $543 $695 $10,061
Kratos Defense & Security Solutions 21.0% $1,743 $2,155 $2,553 $10,165
nLight 19.5% $307 $347 $439 $3,651
AeroVironment 17.7% $2,094 $2,432 $2,902 $8,583
Space Exploration Technologies 68.9% $36,138 $67,174 $103,137 $2,434,452
Source: LSEG
In comparison, companies in the S&P 500 SPX are expected to show a weighted revenue CAGR of 8.2% from 2026 through 2028. For the S&P 500 information technology sector, the revenue CAGR is expected to be 22.5%, according to LSEG data.
Don't miss: Here are 20 growth stocks you can buy at 'value' prices
-Philip van Doorn
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 22, 2026 12:02 ET (16:02 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments