Space & Defense Stocks: Three Ways to Play the $600B Military Space Boom
Felix opens by recapping recent wins in quantum computing stocks and a prior Mercury Systems (MRCY) call, then pivots to a broader thesis: US government space and defense spending is exploding, with figures cited including a $40B+ Space Force budget, $60B in total DoD space outlays, and $13–185B allocated to the Golden Dome missile shield program. He frames this as a "$600B economy racing toward a trillion" and argues the IPO of SpaceX signals a structural inflection point for the sector.
The three featured stocks represent different layers of the space/defense stack. Mercury Systems (MRCY) is positioned as the "brains"—processing modules inside F-35s and Patriot missiles—with a reported 350% earnings beat, $1.5B backlog, and a new classified computing contract. Astronics (ATRO) is the "power" layer, supplying cockpit and cabin electronics to commercial aviation and military comms test equipment, guiding toward ~$1B in revenue with a $734M backlog. Redwire (RDW) is the "infrastructure" play—solar arrays, antennas, and orbital structures—with 58% revenue growth and contracts including a $1.8B indefinite-delivery DoD deal, but it remains cash-flow negative with notable share dilution.
Felix presents a three-step screening framework he attributes to a 50-year-old Wall Street protocol: - Follow the money: prioritize government contracts, backlog size, and book-to-bill ratios above 1.0 - Identify the moat: security clearances, supply-chain lock-in, and proprietary technology create durable barriers in defense - Assess risk honestly: path to profitability, debt load, dilution, and insider activity must all be checked
The key concern flagged is the risk of chasing high-volatility names on FOMO. Redwire is explicitly labeled the highest-risk of the three due to ongoing cash burn and a prior 270% run-up that subsequently collapsed. Felix's counter-intuitive warning—"cheap stocks make new all-time lows; stocks at all-time highs make new all-time highs"—underpins his preference for momentum-validated names over beaten-down speculations.
Bottom line: The defense and military space buildout is real and well-funded, and Felix sees Mercury as the lower-risk anchor, Astronics as a steady compounder, and Redwire as a higher-risk, higher-upside infrastructure bet. The session closes with a pitch for a live workshop (wealthmachine.org) focused on converting the current IPO cycle into a multi-year wealth-building strategy.
Felix pitches Mercury Systems, Astronics, and Redwire as tiered plays on surging US military space and defense spending. He walks through a three-part due diligence framework—contracts, moat, and risk—while cautioning against chasing volatile, cash-burning names purely on hype.
Regetti went up like 500%. D-Wave more than tripled.
in July 2025, I showed you a stock called Mercury Systems, ticker symbol MRCY. And since then, it's up over 113%.
Just a few days ago, SpaceX went public. The largest IPO in history.
The US government is now spending nearly $60 billion a year just on military space.
We're talking about a $600 billion economy racing towards a trillion.
US Space Force budget alone is over $40 billion.
Department of Defense spending on space 60 billion. And then there's the Golden Dome, America's new missile defense shield, 13.4 billion allocated just for that program. And they're planning to spend 185 billion before it's done.
SpaceX, Loheed Martin, Northrup Grman, Rathon, 12 companies just got awarded contracts worth up to three billion dollars for space-based interceptors.
Mercury system builds the electronic brains inside America's most advanced weapons. You know, the F-35 fighter, Mercury builds the processing modules inside Patriot missile systems, Mercury.
Last quarter, revenue was $235 million, a little bit up over the year, but they beat Wall Street's estimates.
Earnings per share were an absolute blower. 350% higher profits than Wall Street had expected.
The backlog, and that's the number that I really, really care about, $1.5 billion of orders on the backlog.
they just landed a multi-year contract to deliver a thousand secure service. These are hardened computing systems for classified military applications.
To do what they do, you need security clearances. top secret compartmentalized security clearances. The kind of clearances that take years to get.
It was trading at $55. It's trading at $115 right now, which is, you know, approximately 110% up.
They're guiding to about a billion dollars in revenue this year. Huge order book pouring in. $734 million in backlog.
every time you plug your phone charger into your seat on a Boeing or an Airbus, that's astronics hardware. The cockpit lighting, astronics. The power distribution system, astronics. The emergency lighting that guides it to the exit, astronics.
They build the test equipment the US Army uses to make sure its communication systems actually work.
Red Wire builds the actual structures that go into orbit. They're one of the pure place space infrastructure companies that you can buy on the market today.
They built the physical stuff of space, the solar arrays, the sensors, the structures, the antennas, and the payload system.
NATO selected Red Wire for drone technology. They want to spot on the DARPA Otter program, which is something that goes into very low Earth orbit.
they're part of a $1.8 billion Andromedia contract with the Department of War. And that's an indefinite delivery, indefinite quantity deal, which means the government can keep ordering for years under this contract.
revenue up 58% last year.
2024 the thing went up like 270% and then guess what? it went back down to zero
Astronics 1.2 two almost 1.3 backlog. RDW almost two times book to bill which means they're booking more orders than they're delivering on.
they're targeting positive free cash flow and that's typically a moment where a lot more institutional investors start looking at a stock because a lot of them only want to buy stocks with positive free cash flow.
wire is still burning cash. So that's the highest risk there.
The protocol I like to use is the one that Wall Street uses. And it's what I learned from my mentors. I know from my mentors this has been around for at least 50 years.
Wall Street no longer cares about fundamentals. Look at SpaceX. Fundamentals look terrible. It's all about following the money.
You're gonna have great fundamentals. You're gonna have a great business and Wall Street can hate it and therefore it never goes up.
If you own silver, whether it's in coins, in a safe, shares, in an ETF, or a mining stock, what happens on June 16th could be the single most important day for your investment this year.
They made a loss last quarter. There is share dilution. It goes up and down 10 or 15% a year.
Stocks at all-time highs tend to make new all-time highs, whereas stocks that are cheap tend to make new all-time lows.
A lot of people are chasing the riskiest thing out there because FOMO is real.
Step number one is follow the money. The three things that I look at, government contracts, backlogs, and book-to-bill ratio. Government contracts tell me the company has some real customers. backlog tells me if the demand is actually sustainable. And the book to bill thing, it's a ratio of new orders to revenue. If it's above one, the company is booking more business than it's delivering, which is a company that's accelerating its growth.
The second then is look at the moat. A mode is what stops competitors from just copying the product. In the space and defense worlds, moes are usually very strong. security clearances, supply chain lockin and proprietary technology will be the things that we want to look at.
you want to look at risk and most people skip this because it just sounds more exciting to look at the positives but risk is very very important. So is there path to profitability? What's the debt looking like? Are they diluting the heck out of us? What are the insiders doing?
Three layers of the space economy: the brains, the power, the infrastructure, fundamentally money pouring into it.
Having a very clear structure and framework and rules and having that protocol like printed out on your desk that tells you what decisions you make and what decisions you don't make.
Astronics, ticker symbol ATRO, and Redwire, ticker symbol RDW.
I'm going to hold for the first time ever a live workshop on Father's Day, American Father's Day. And it's called how to turn the IPO summer into a five-year wealth machine.
Sunday evening, 7:00 p.m. I think it is New York time, join us at wealthmachine.org
“Felix, every time you think about the word cheap with investing, run.”
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