Al Root

SpaceX fared better than NASA in President Donald Trump's initial budget proposal for fiscal year 2026.

On Friday, the president released his so-called skinny budget request for the year. Included was a 13% boost in military spending to $1.01 trillion. That level of growth would be a positive for the aerospace and defense sector, but investors should remember it is only a proposed increase.

In another corner of the aerospace industry, NASA is facing potential cuts. The president proposes slashing $6.3 billion from NASA, or about 25% of the space agency's fiscal year 2025 budget request of some $25 billion.

On the chopping block are some Mars exploration missions, but there is also a proposed increase of about $650 million for commercially focused Mars programs. Money would flow from NASA to the private sector to build and maintain launch and exploration programs. The proposal also would phase out NASA's Space Launch System, Orion space capsule, and Gateway space station.

Northrop Grumman and Boeing are suppliers to the SLS program, wrote Vertical Research Partners analyst Rob Stallard in a Monday report. Lockheed Martin builds the Orion spaceship.

It is impossible to see changes in Mars-focused spending and cuts to the SLS program and not think of SpaceX. The company is planning its own Mars missions and is the dominant space-launch provider on the planet.

SpaceX has launched its Falcon 9 rocket 49 times so far in 2025, accounting for more than half of global launch activity. Its Starship rocket is larger and more powerful than NASA's SLS, but is being developed at a fraction of SLS's costs.

Falcon 9 is partially reusable, and Starship is designed to be fully reusable. That gives SpaceX an enormous cost advantage over the rest of the industry.

SpaceX remains dominant, but the rest of the growing commercial space industry is a relative winner in Trump's budget proposal. That includes companies such as Rocket Lab USA, Intuitive Machines, AST SpaceMobile, and Redwire, among others.

Those four stocks are up about 44% on average since the Nov. 5 presidential election, trouncing the S&P 500 by almost 50 percentage points.

SpaceX, of course, is privately held. It is the most valuable aerospace and defense company on the planet with a private market valuation estimated at some $350 billion.

Exactly what will happen to NASA's budget and some of its 17,000-plus employees is hard to say. Overall, the goal appears to be letting NASA become more of a manager of commercially supplied systems than a developer of its own hardware.

It is important to remember that lower costs to reach space have allowed the space industry to grow and offer new applications. SpaceX has more than 7,000 satellites in orbit, profitably offering Wi-Fi service to millions around the globe. Amazon.com is building its own space-based communications network.

The future of space exploration is bright. Exactly how the business gets done is up in the air.

Write to Al Root at allen.root@dowjones.com

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May 05, 2025 10:45 ET (14:45 GMT)

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