President Donald Trump has now signed a direct order, telling the Pentagon to push forward with drafting legislation and create the sixth branch of the U.S. military: Space Force.
If plans turn to actions, the Space Force will join the U.S. Army, Navy, Marine Corps, Air Force and Coast Guard. Without surprise, the Space Force concept is being viewed with both skepticism and enthusiasm. Either way though, it could spell additional upside for defense contractors and technology firms.
Even though it will take time to implement, if the Space Force comes to fruition, it will surely provide another bit of "oomph" to these companies' top and bottom lines. So what companies would be set to benefit?
Aerospace names will surely be beneficiaries. That brings up the obvious picks, like Lockheed Martin (LMT) - Get Report and Boeing (BA) - Get Report . Between the two of them, they also have a joint venture known as United Launch Alliance (ULA), a rocket company that carries payloads into orbit. The ULA already works with the military, making this one almost a lock (and thus Boeing and Lockheed) when it comes to the Space Force.
That would also suggest that SpaceX, a company run by Tesla (TSLA) - Get Report CEO Elon Musk, could also be a beneficiary of increased space activity by the U.S. government. Blue Origin, a company founded by Amazon (AMZN) - Get Report CEO Jeff Bezos, could also see an uptick in launch activity as a result. Both startups have already done work with, and are in launch contracts with, the military.
Then there's a company like Northrop Grumman (NOC) - Get Report , which provides aerospace systems, mission systems and technology services. It handles everything from communication -- how important do you think that will be for the Space Force? -- manned aircraft, autonomous systems, cyber and security, spacecraft and high-energy laser systems.
Based on these many facets, it appears as though Northrop could be a big winner in this initiative.
There's also names like General Dynamics (GD) - Get Report and Raytheon (RTN) - Get Report , which work on defense systems used by militaries around the world. Industrial/aerospace companies like United Technologies (UTX) - Get Report and Honeywell (HON) - Get Report are also potential beneficiaries.
Are these the only winners? Of course not. Everything from semiconductors to sensors to graphic chip manufacturers could see a "trickle down" effect. As the companies working directly with the Space Force see an uptick in orders, they will need to tap into their suppliers as well.
The bottom line? The list of winners is long and a few of the names above should be go-to beneficiaries.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.