Space companies to win billions from NASA's budget, including SpaceX, Blue Origin, Maxar & more - CNBC

The moon seen from the International Space Station on July 9, 2018.

Alexander Gerst | NASA

The National Aeronautics and Space Administration is asking Congress for a $25.2 billion budget next year, a 12% increase from last year that will likely be a boon for companies across the space industry.

NASA's request represents a "bigger than expected increase" to its budget, Morgan Stanley analyst Adam Jonas wrote in a note to investors on Tuesday, with significant implications.

"The pace of development of the space economy is a function of interaction between private investment, government/policy support and public awareness," Jonas said.

NASA got $22.6 billion from Congress for fiscal year 2020 and its increased request stems largely from the agency's goal of fulfilling President Donald Trump's directive to land astronauts on the moon by 2024 – known currently as the Artemis program.

Nearly half of this year's request, or $12.37 billion, is for NASA's lunar campaign – much of which would go some of the biggest space companies in the U.S. The agency outlined $1.4 billion for the Orion spacecraft and $2.26 billion for the Space Launch System, programs for which Lockheed Martin, Boeing, and Aerojet Rocketdyne are the primary beneficiaries.

There is also $3.37 billion proposed to fund the development of competing crewed lunar lander systems, up for grabs with several coalitions submitting competing bids.

"This kind of budget would move us a long way towards the administration's 2024 goals by funding development of two or more of the large lunar landers proposed by SpaceX, Blue Origin, Boeing, Dynetics and others," Rob Meyerson, an industry consultant and former president of Blue Origin, told CNBC.

NASA noted that this is the first time it would direct funding to such a system since the Apollo program. Deloitte specialist Jeff Matthews explained that these commercial providers stand to benefit from NASA budget, although it has yet to be seen what Congress adjusts before approving the budget.

"This is the first step in long process towards appropriations, but I'm encouraged by the ambitious plan presented by the Agency," Matthews said.

Funding lunar cargo and crew missions

NASA missions bound for the moon are the top winners in the budget request, with funding for lunar spacecraft, research and more.

The agency's most notable request is the nearly $3.4 billion to fund the competitive development of crewed lunar lander. Last year, NASA asked for $1 billion for the effort and Congress approved $600 million – so this year's request is more than five times as much. Additionally, NASA on Monday announced that it expects to award the first crewed lunar lander contracts in just a few weeks, in late March or early April.

"It will take a broad coalition to get back to the moon, and NASA is motivated to make it happen," Meyerson said.

Laura Forczyk, founder of space consulting firm Astralytical, expects there to be four bids for NASA's crew lunar lander program: Teams led by Blue Origin (with Lockheed Martin, Northrop Grumman and Draper), Dynetics (with Sierra Nevada Corp.), Boeing (with Aerojet Rocketdyne and Intuitive Machines) and SpaceX.

SpaceX's bid to fly astronauts to the moon is yet to be confirmed, although the company in November joined a NASA pool of vendors bidding to fly cargo missions to the lunar surface. Additionally, SpaceX President and COO Gwynne Shotwell said in October that the company aims to land its next-generation Starship rocket "on the moon before 2022 with cargo and with people shortly thereafter." François Chopard, founder of startup accelerator Starburst Aerospace, said that SpaceX's experience over the past decade developing its Crew Dragon capsule to fly astronauts to the space station makes it a front-runner to fulfill NASA moon plans.

"They are better positioned then anybody else to develop a human moon capsule and lander," Chopard said.

NASA's budget also requests funding for "the lunar Gateway," which Forczyk noted is important to Maxar Technologies, a company that specializes in everything from satellites to robotics in space.

"Maxar has a contract to build the power and propulsion element of Gateway," Forczyk said.

Forczyk also highlighted that NASA would fund the lunar rover program "VIPER," which would likely see bids from rocket companies like United Launch Alliance (ULA) and SpaceX.

Broadening the space economy

Overall, NASA's budget should help drive further technological development and investment across the space industry, especially for small companies that benefit greatly from multi-million dollar contracts.

"We can imagine that a part of this budget increase will come to emerging space startups," Chopard said.

Chopard called out Made in Space as one of those companies, which is testing its 3D-printing technology in space.

"Made in Space could also benefit a lot from this additional budget given all the effort in robotics and manufacturing in space," Chopard said.

Forczyk pointed out the budget's support for new space stations in Earth's orbit, saying it "could mean support of commercial space station plans by Axiom and Bigelow." NASA announced last year that it would open the International Space Station to new activities, with the agency touting it as a stepping stone to building an ecosystem in space.

SpaceX, Blue Origin and ULA may also compete for the potentially lucrative launch contract of NASA's "Europa Clipper mission. The spacecraft was originally going to launch on the Boeing-built Space Launch System (SLS), but costs and delays have that rocket have climbed rapidly.

"The President's budget request recommends bidding the launch for Europa Clipper out to commercial launch service providers rather than using NASA's SLS, saving 'over $1.5 billion,'" Forczyk said.

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