Could Amazon Be A Space Exploration Giant?

Jeff Bezos has been blasted into space – but could Amazon become his competitor? The Amazon Maven discusses how the Seattle-based giant might become a player in space exploration.
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Tuesday, July 20, was another important day for civilian-led space exploration. Amazon founder and former CEO Jeff Bezos was blasted beyond the Kármán line aboard Blue Origin’s New Shepard space craft, days after Sir Richard Branson achieved a similar feat with Virgin Galactic.

To be clear, Jeff Bezos’ mission was unrelated to Amazon  (AMZN) - Get Report – other than the fact that the billionaire astronaut owns 10% of the company, and the founding of Blue Origin can be traced to the wealth that Mr. Bezos’ amassed through Amazon stock. But could the cloud and e-commerce giant be directly involved in space exploration, following in the footsteps of its founder?

Figure 1; Jeff Bezos, founder of Blue Origin.

Figure 1; Jeff Bezos, founder of Blue Origin.

(Read more from the Amazon Maven: Why Cathie Wood Has Gone Sour On Amazon Stock)

AMZN in ARK’s Space ETF

This may be news to some, but Amazon stock is already, to an extent, considered a space exploration play. How so? It is currently the 12th largest holding in Cathie Wood’s ARK Space Exploration and Innovation ETF (ARKX), at an allocation ratio of over 3%.

To think of Amazon as a key player in space exploration, however, is still a bit of a stretch. To the best of my knowledge, the Seattle-based company has no intention of competing with its former founder in the race for space travel, which seems to be at the core of Blue Origin’s mission.

Think more broadly

If the concept of space exploration is expanded to include broad initiatives involving aerospace technology, then Amazon can be (and arguably already is) a key piece of the puzzle.

The company discretely runs Project Kuiper, a $10 billion program aimed at setting up a global internet network connected by over 3,000 satellites low-orbiting Earth. Recently, Amazon signed a deal with a Boeing-Lockheed joint venture to send the first few hundred satellites into space.

In addition, Amazon has been working on further automating its merchandise delivery process by using drones. The company obtained government approval to operate a fleet last year, paving the way for unmanned delivery of packages. Autonomous flights have already been successfully tested.

(Read more from the Amazon Maven: Is This A Sign That Amazon Stock Has Peaked?)

The Amazon Maven’s take

I find it hard to imagine Amazon getting involved in “traditional” space exploration (i.e. manned trips into space) any time soon, or at all. The company has plenty of growth opportunities in e-commerce, cloud infrastructure, consumer products and services, and it will probably address them first.

If anything, Amazon may play an indirect role in space exploration. The more successful the company is at what it does best, the wealthier 10% owner Jeff Bezos will become, and the more capital Blue Origin’s founder will have at his disposal to fund his dream of building a path into the cosmos.

Twitter speaks

Pop quiz: how is Amazon currently involved in space exploration?

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Amazon Maven)