Does a $3.5 billion deal ignite the US stock market’s commercial space sector? SDA accelerates the deployment of a space defense network, with low-Earth-orbit commercial satellites becoming critical.

①This marks the largest deal to date for the U.S. military’s low Earth orbit constellation; ②This batch of satellites represents the third order for the U.S. Space Development Agency’s missile tracking satellite group and is expected to launch in fiscal year 2029; ③The global race for space superiority has intensified, with comprehensive competition underway in areas such as space exploration, manned spaceflight, and commercial space activities.

The STAR Market Daily reported on December 22 (edited by Song Zijiao) that U.S.-listed commercial space stocks surged collectively on Friday, with Rocket Lab Corp up 17.69%, AST SpaceMobile Inc-A rising 15.03%, and Virgin Galactic gaining 6.71%.

Rocket Lab, which led the surge, is currently the only leader of the “second-tier” companies that has successfully achieved orbital-level launches and gone public. It has just secured a major order from the U.S. Space Development Agency (SDA), marking its largest contract to date.

According to the website of the U.S. Air & Space Forces Magazine, on Friday, December 19 local time, the U.S. Space Development Agency under the U.S. Space Force announced $3.5 billion worth of contracts awarded to four companies for the procurement of a total of 72 missile warning and tracking satellites—marking the largest deal to date for the U.S. military’s low Earth orbit constellation.

The U.S. Space Force, established on December 20, 2019, is the sixth independent branch of the U.S. military, reporting directly to the President. Its primary mission is to safeguard U.S. national interests in the space domain, ensuring freedom of action in space, protecting its space assets, and providing space-based capabilities to support the U.S. military (e.g., satellite communications, missile warning, navigation, and positioning).

The U.S. Space Development Agency (SDA), a rapid acquisition organization for advanced space technologies under the Department of Defense and now transferred to the Space Force, was established in March 2019. Its core mission is to quickly develop and deploy next-generation space-based military capabilities based on commercial technologies, particularly to address emerging threats such as hypersonic missiles, accelerating the construction of a highly resilient proliferated warfighting space architecture (PWSA) composed of hundreds of low-Earth-orbit satellites.

This batch of satellites constitutes the third order for the SDA’s missile tracking satellite group, specifically the third tranche of the “Tracking Layer” under the PWSA (TRKT3), and is expected to be launched in fiscal year 2029.

Gurpartap Sandhu, Acting Director of the U.S. Space Development Agency, stated in a press release that the third batch of satellites will “significantly expand” the coverage of the SDA and enhance the accuracy of its tracking constellation. “The addition of these satellites will enable near-continuous global missile warning and tracking coverage, as well as generate payloads capable of producing fire control-level tracking for missile defense.”

The four companies are Lockheed Martin, Northrop Grumman, L3Harris, and Rocket Lab, each tasked with producing 18 satellites for the SDA over the next three years. Due to slight differences in the satellite products offered by each company, the corresponding contract values vary:

Lockheed Martin’s contract is valued at $1.1 billion for the production of missile warning, tracking, and defense satellites.

Rocket Lab’s contract is worth $805 million for missile warning, tracking, and defense satellites;

Northrop Grumman’s contract is valued at $764 million, solely for missile warning and missile tracking satellites;

L3Harris was awarded a contract amounting to $843 million, exclusively for missile warning and missile tracking satellites.

All four companies are existing suppliers of the U.S. Space Development Agency, with clear intentions to expand production.

L3Harris recently announced that its facility in Palm Bay, Florida, has achieved ‘full-scale production’ of advanced missile-tracking satellites. The company expanded its production floor in August, and Ed Zoiss, President of its Space and Airborne Systems division, stated during a media tour on December 10: ‘We are now in full production, and there is no doubt about that.’

Zoiss also noted that as the number of satellites delivered in tranches by the SDA increases, the industry is now preparing for continuous production.

However, the third tranche of funding, originally planned to be disbursed in two parts (one in October and one in December), experienced slight delays due to a government shutdown. The Pentagon reallocated some project funds to pay military personnel during the six-week funding gap.

The PWSA being built by the U.S. Space Development Agency is a constellation comprising near-Earth orbit data relay satellites, missile warning, and defense satellites. The agency plans to deploy multiple satellites in batches every two years. Currently, it has deployed eight missile warning and tracking satellites and 19 data relay satellites as part of its experimental ‘Tranche 0’ constellation. Concurrently, the agency is conducting a 10-month launch campaign to send an additional 28 missile warning and tracking satellites and 126 communication satellites into orbit as part of the first tranche plan.

Missile warning, tracking, and defense represent three interrelated yet independently distinct missions. Missile warning sensors alert users after a missile launch. Missile tracking systems monitor the trajectory of the missile. Missile defense sensors provide the essential data required for intercepting missiles.

The report notes that the tracking layer will eventually form a global network of low Earth orbit missile warning satellites, which is expected to play a critical role in the Pentagon’s development of an advanced missile defense system named ‘Golden Dome.’

Space exploration has been elevated to the level of U.S. national strategy. On December 18, President Trump signed an executive order mandating measures such as increased R&D and attracting private sector investment to ensure America’s “space dominance.”

According to the White House release of the executive order, titled “Ensuring American Space Dominance,” the U.S. government will adjust its space policy.

In the highly anticipated lunar exploration efforts, through the Artemis program, Americans are to return to the Moon by 2028; by 2030, establish “initial elements of a permanent lunar outpost” and lay the groundwork for subsequent Mars exploration. Regarding the application of nuclear power in space, the executive order states that short-term utilization of space-based nuclear power must be achieved, including deploying nuclear reactors on the Moon and in space orbit, and launching a lunar surface reactor by 2030.

The executive order also emphasizes the need for capabilities to identify and respond to threats to American interests in space, including the deployment of nuclear weapons in space. Additionally, the order encourages active private sector investment in the space domain, aiming to attract at least $50 billion in additional investment into the U.S. space sector by 2028. It also seeks commercial alternatives to replace the International Space Station after its expected retirement in 2030.