Wall Street has spent years trying to size the business of space, and the latest estimate comes from UBS. The bank projects that the global space economy could reach about $1.3 trillion by 2040, growing at roughly 7% a year, according to a research note reported by Investing.com. It is worth understanding what that figure means, and treating it with the caution any long-range forecast deserves.
What the "space economy" and "TAM" mean
The space economy is the sum of all commercial activity connected to space: building and launching rockets and satellites, the ground equipment that talks to them, and the services they enable, from satellite broadband and television to navigation and Earth-observation data. It is broader than the old aerospace business of building spacecraft, because it now includes recurring, subscription-style revenue, the money people and companies pay, often without thinking about it, for services that run through space.
Analysts describe the size of that opportunity as a total addressable market, or TAM: an estimate of the maximum annual revenue a market could generate if it reached its full potential. A TAM is not current sales, and it is not a promise; it is a sizing exercise built on assumptions. Change the assumptions and the number moves, which is exactly why these estimates should be read as scenarios rather than certainties.
What UBS's number rests on
The projection is built on a few core ideas. The most important is that the cost of getting to orbit keeps falling. Reusable rockets have already driven launch prices down sharply over the past decade, and cheaper access to space widens the range of activities that can make money there. UBS's case leans on that trend continuing, alongside growth in satellite broadband, expanding government and defense spending on space, and, more speculatively, newer ideas such as manufacturing in orbit. The specific segment and cost figures in the note are the bank's own assumptions, and Boursel presents them as such rather than as established fact.
Crucially, UBS's headline figure is a base case that the bank itself tempers for risk. Space is capital-intensive and execution-dependent: launches fail, programs slip, and regulation and geopolitics can all slow the build-out. A more optimistic path could push the market higher; a more troubled one could leave it well short.
How it compares, and how to use it
Context matters, because UBS is far from the only bank to have put a number on this. Others, including Morgan Stanley and Citi, have for years projected the space economy reaching roughly $1 trillion by 2040, as chronicled in the industry press. UBS's $1.3 trillion therefore sits at the more bullish end of a broadly similar range; the fact that several independent forecasters cluster around the trillion-dollar mark lends the general direction more weight than any single figure.
For investors, the practical value of a projection like this is not the precise number but the thesis behind it: that space is shifting from a government-dominated arena to a commercial one with real, recurring revenue, and that falling launch costs are the engine. That thesis can be right in direction even if the dollar figure proves too high or too low. The sensible reading is to treat $1.3 trillion as one bank's considered scenario, useful for understanding where the money might flow, not as a prediction to bank on. Boursel does not give investment advice; a forecast two decades out is a way of thinking about a trend, not a guarantee of one.
